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Preparing for 2026–27: What Not-for-Profit Leaders Need to Know About the New Charitable Giving Rules

The passage of the 2025 Reconciliation Act, often referred to as the “One Big Beautiful Bill Act” (OBBBA), introduced sweeping updates to federal charitable giving regulations that will begin taking effect in 2026 and 2027. These changes will have far-reaching implications for not-for-profits, donors, and fundraisers across all sectors. For not-for-profit leaders, now is …

The passage of the 2025 Reconciliation Act, often referred to as the “One Big Beautiful Bill Act” (OBBBA), introduced sweeping updates to federal charitable giving regulations that will begin taking effect in 2026 and 2027. These changes will have far-reaching implications for not-for-profits, donors, and fundraisers across all sectors.

For not-for-profit leaders, now is the time to plan ahead. Understanding the new giving landscape early will help organizations adapt their fundraising strategies, communicate effectively with donors, and safeguard financial stability in the years ahead.

Key Changes to Charitable Giving Rules

A recent report from Arts, Culture, and Media Philanthropic Advisors, titled One Big Beautiful Bill Act and Charitable Giving in 2026: Guidance for Fundraisers, outlines several significant updates that will affect how individuals and corporations give.

Expanded Deduction for Non-Itemizers

Starting in 2026, taxpayers who do not itemize will be eligible for a charitable deduction on cash contributions, up to $1,000 for individuals and $2,000 for joint filers. Donations to private foundations and donor-advised funds do not qualify, and these amounts will not be adjusted for inflation. This change reintroduces a version of the universal charitable deduction, designed to encourage everyday donors to give.

Permanent 60 Percent Limit for Individual Cash Gifts

The new law makes permanent the increased deduction limit, 60% of adjusted gross income (AGI), for individuals contributing cash gifts to qualified charitable organizations. This continues a provision that had been temporary under prior legislation, ensuring greater flexibility for generous donors.

New 0.5 Percent Floor for Itemizers

Beginning in 2026, taxpayers who itemize may only deduct charitable gifts that exceed 0.5% of their AGI. In addition, those in the top tax bracket (37%) will receive a slightly reduced deduction value, 35 cents on the dollar rather than 37. While the difference may seem small, this adjustment could influence high-income donors’ giving behaviors.

Tax Credit for Scholarship Contributions

In 2027, a new tax credit of up to $1,700 will be available to taxpayers contributing to eligible scholarship-granting organizations that support students at private or religious K–12 schools. This credit will apply regardless of whether the taxpayer itemizes deductions, creating a new incentive for education-focused giving.

Corporate Deduction Floor Introduced

Corporate charitable giving will also be affected. Beginning in 2026, businesses can only deduct charitable donations that exceed 1% of taxable income, up to a ceiling of 10%. This change could encourage larger or multi-year giving commitments from corporate partners but may also require not-for-profits to adjust their approach to sponsorship and corporate engagement.

What These Changes Mean for Not-for-Profits

The new rules create both challenges and opportunities for not-for-profit organizations. While they may increase participation among smaller, non-itemizing donors, they could also complicate giving strategies for major donors and corporate partners. Strategic planning will be essential to help not-for-profits maintain balance across their donor bases.

1. Engaging Everyday Donors

The reinstated universal deduction for non-itemizers provides an opportunity to engage a wider pool of small donors. Not-for-profits should build fundraising campaigns that highlight how even modest contributions now carry tangible tax benefits. Messaging that connects giving directly to impact, such as “Your $100 gift not only supports our mission but is now tax-deductible”, can inspire participation from new supporters.

The upcoming scholarship tax credit also opens doors for organizations connected to education or youth programs. Communicating this new benefit early can help donors plan ahead and strengthen relationships with supporters interested in education equity.

2. Planning for Itemizers and Major Donors

For high-income donors and those who itemize, the 0.5% deduction floor and top-tier reduction may prompt new giving strategies. Fundraisers should be ready to discuss “bunching”, a method where donors concentrate multiple years of charitable giving into one tax year to exceed deduction thresholds and maximize impact.

Not-for-profits can also encourage legacy giving and planned gifts as donors evaluate long-term financial strategies. With the Act’s increase in estate and gift tax exemptions to $15 million for individuals and $30 million for couples, there’s greater opportunity for philanthropic estate planning that aligns with organizational sustainability goals.

3. Strengthening Corporate Partnerships

The new 1% minimum for deductible corporate giving means businesses will need to contribute at least that share of taxable income to qualify. Not-for-profits should position themselves as strategic partners by proposing multi-year sponsorships, collaborative campaigns, or pooled giving initiatives that help corporate donors meet thresholds while achieving meaningful community outcomes.

This shift may also prompt companies to become more intentional in selecting not-for-profit partners, valuing transparency, measurable results, and mission alignment more than ever before.

Turning Policy Changes into Strategic Opportunity

The OBBBA reforms introduce a mix of opportunities and challenges for the not-for-profit sector. While the expanded universal deduction could increase small-donor giving, the new floors and limits may temper large-scale contributions. Success in this new environment will depend on thoughtful, proactive engagement.

Not-for-profits should begin scenario planning now, reviewing donor data, updating messaging, and educating their supporters about how the rules will affect them. Creating segmented outreach strategies for small donors, major donors, and corporate partners will help organizations adapt smoothly to the evolving landscape.

How De Boer, Baumann & Company Can Help

At De Boer, Baumann & Company, we help not-for-profit navigate the complex intersection of tax regulation, fundraising, and financial strategy. Our team works alongside not-for-profit leaders to understand the implications of legislative changes, model potential impacts, and develop proactive approaches to donor engagement and compliance.

We partner with organizations to ensure they are prepared for what’s next, so they can continue focusing on what matters most: advancing their missions and strengthening their communities.

To read the full article by Timothy J. McClimon, please visit Forbes.

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Facebook and Volunteer Engagement: Maximizing Opportunity While Managing Risk

In an era of rapid social media change, it’s easy to overlook Facebook in favor of newer platforms like TikTok or Instagram. Yet despite its age, Facebook remains one of the most powerful communication tools available to nonprofits. According to the Pew Research Center, roughly seven in ten U.S. adults still use Facebook, making …

In an era of rapid social media change, it’s easy to overlook Facebook in favor of newer platforms like TikTok or Instagram. Yet despite its age, Facebook remains one of the most powerful communication tools available to nonprofits. According to the Pew Research Center, roughly seven in ten U.S. adults still use Facebook, making it one of the most widely used social platforms in the country.

For organizations seeking to connect with supporters, mobilize volunteers, and strengthen community engagement, Facebook continues to offer immense value. However, it also poses distinct challenges, particularly around data privacy, audience reach, and platform ethics. Understanding how to balance these opportunities and risks can help nonprofits make the most of this enduring digital space.

Leveraging Facebook for Volunteer Recruitment

With 96% of nonprofits maintaining a Facebook presence, the platform remains a vital recruitment tool. To use it effectively, nonprofits should first ensure that managing Facebook activity is a defined part of someone’s job responsibilities. Consistent posting and engagement are key to staying visible in followers’ feeds.

When posting volunteer opportunities, framing matters. Each post should connect volunteer participation directly to the organization’s mission or cause.

Deadlines, incentives, and timely messaging all help spark action. Even for ongoing opportunities, creating urgency, like “Sign up by December 1 to receive a volunteer welcome kit”, can boost engagement. Nonprofits can also expand their reach by cross-posting opportunities on networks such as VolunteerMatch or local community Facebook groups.

Another effective tactic is to personalize posts. Staff or volunteer coordinators can use their own voices to make posts more relatable: “I’ll be at our river cleanup this weekend, join me in making a difference!” This approach humanizes the organization and fosters a stronger sense of connection with prospective volunteers.

Finally, using Facebook’s event tools to promote volunteer days or training sessions can drive interest. Posts should link directly to the organization’s own “Volunteer With Us” webpage rather than relying on Facebook Messenger for sign-ups, ensuring a smoother and more secure experience.

Retaining and Recognizing Volunteers

Recruitment is only half the equation. Once volunteers are on board, maintaining engagement is just as important, and Facebook can be a useful tool for this as well.

Nonprofits that collaborate with partner or “affinity” organizations, such as churches, service clubs, alumni groups, or local businesses, should follow and tag those partners on Facebook when posting volunteer updates. Tagging these organizations acknowledges their contributions and helps extend the post’s reach to broader audiences.

Encouraging volunteers to share their own photos or reflections on social media also deepens engagement. For example, a volunteer might post a picture from a community event and tag both the nonprofit and their affinity group, inspiring others to get involved.

Organizations can strengthen volunteer relationships through personalized gestures online: posting birthday wishes (with consent), tagging volunteers in event photos, or simply “liking” their posts. These small actions build connection and demonstrate appreciation, helping to sustain long-term involvement.

Protecting Volunteer Privacy

While social media helps build community, it can also expose volunteers to unwanted visibility. Nonprofits should take proactive steps to protect their supporters’ privacy and data.

  • Avoid collecting personal information directly on Facebook. Instead, direct interested individuals to a secure volunteer sign-up form on your organization’s website.

  • Obtain written consent before sharing photos or tagging volunteers. This not only ensures compliance with privacy standards but also respects individual comfort levels.

  • Include a social media permission section in volunteer applications. This form can outline how photos, names, or stories might be used in newsletters or online platforms, allowing volunteers to choose the level of exposure they’re comfortable with.

While no process can eliminate all risks, establishing clear boundaries and policies helps make social media engagement safer for both the organization and its volunteers.

The Evolving Role of Social Media in Volunteerism

Volunteer management practices have changed dramatically over the years. Where once volunteer lists were built manually from local directories, nonprofits now use digital tools to connect with supporters worldwide. Yet the core principles remain the same: consistent communication, recognition, and trust-building are still at the heart of successful volunteer engagement.

Even as new social media platforms rise and fall in popularity, Facebook continues to be an essential part of many nonprofits’ outreach and volunteer recruitment strategies. Understanding the platform’s strengths, and navigating its challenges responsibly, can help organizations expand their reach, strengthen relationships, and grow their capacity for impact.

How De Boer, Baumann & Company Can Help

At De Boer, Baumann & Company, we know that volunteer engagement is central to a nonprofit’s success. Our team helps organizations strengthen operational strategies, from financial planning to program development and digital engagement.

We partner with nonprofits to navigate evolving challenges, whether that means adopting new technology, maintaining compliance, or building systems that support sustainable growth. By combining practical expertise with a deep understanding of the nonprofit landscape, we help organizations focus on what truly matters: advancing their missions and serving their communities.

To read the full article by Jan Masaoka, please visit Nonprofit Quarterly.

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Navigating What’s Next: Legislative Opportunities and Challenges for Not-for-Profits

As Congress moves beyond the “One Big Beautiful Bill Act” (OBBBA), a new wave of legislative priorities is beginning to take shape. These shifting dynamics present both opportunities and challenges for not-for-profit organizations, especially as the federal government revisits tax policy, funding decisions, and regulatory reform. For not-for-profits that engaged in advocacy during OBBBA’s …

As Congress moves beyond the “One Big Beautiful Bill Act” (OBBBA), a new wave of legislative priorities is beginning to take shape. These shifting dynamics present both opportunities and challenges for not-for-profit organizations, especially as the federal government revisits tax policy, funding decisions, and regulatory reform.

For not-for-profits that engaged in advocacy during OBBBA’s development, there are valuable lessons to carry forward. Strategic communication and proactive engagement helped the sector secure meaningful wins, including the removal of several proposed tax hikes and the establishment of a permanent charitable deduction for non-itemizing taxpayers. Those same tactics will be critical as not-for-profits face the next round of policy debates on Capitol Hill.

Lessons from the OBBBA Experience

When OBBBA was under consideration, not-for-profits faced potential tax provisions that could have significantly reduced the resources available for mission-driven work. Through coordinated outreach and clear messaging, the sector helped lawmakers understand how additional taxes, such as those on private foundations and employee parking benefits, would negatively affect their ability to serve communities.

The result was a favorable outcome: proposed tax increases were removed, and a permanent charitable deduction was secured for the 90% of taxpayers who do not itemize their returns. This achievement underscored how effective storytelling and sector-wide advocacy can shape legislative outcomes in ways that strengthen philanthropy and community investment.

Renewed Legislative and Tax Policy Risks

While the OBBBA chapter has closed, the possibility of renewed legislative threats remains. Congressional tax committee leaders have indicated that certain tax measures removed from the bill could resurface in future discussions, potentially aimed at raising federal revenue through changes to the tax-exempt sector.

At the same time, increased scrutiny of not-for-profits by both Congress and the White House has created a more cautious political environment. Organizations should be prepared for heightened oversight, expanded reporting expectations, and new compliance requirements that could emerge as part of broader fiscal reform efforts.

IRS Reform: A Double-Edged Sword

Lawmakers are also considering an Internal Revenue Service (IRS) reform package, one that could have both positive and challenging implications for charitable organizations.

On the positive side, reform could simplify tax filing for 501(c)(3)s, reduce administrative delays, and strengthen donor privacy protections. However, critics of the not-for-profit sector may push for additional disclosure requirements, including the reporting of foreign donations or international grantmaking data.

There is also discussion around potential changes to Form 990, the core financial disclosure document for not-for-profits. While reform could bring useful modernization and transparency, poorly designed amendments could also increase administrative burden and compliance costs.

Potential Progress on Retirement and Giving Incentives

One area that may offer bipartisan cooperation is retirement reform. Lawmakers are considering proposals that could support not-for-profit employees and encourage greater charitable participation.

This may include enhancements to 403(b) retirement accounts and adjustments that allow individuals with IRAs to make charitable contributions through donor-advised funds more easily. If these proposals gain traction, they could help not-for-profits attract and retain talent while also promoting philanthropy among donors.

The Importance of Advocacy and Engagement

Not-for-profits operating in today’s political environment face both heightened scrutiny and new opportunities to shape policy. Advocacy will play a central role in determining which direction future legislation takes.

During OBBBA negotiations, the not-for-profit sector’s unified, fact-based approach helped remove several unfavorable provisions and secure lasting charitable incentives. That success demonstrates the power of consistent, constructive engagement. As Congress revisits fiscal and tax policy in the months ahead, not-for-profits must continue to advocate early, collaborate with allies, and present practical policy solutions that highlight their community impact.

By engaging lawmakers in a proactive and solutions-focused manner, not-for-profits can ensure their perspectives are included in policy decisions that directly affect their missions.

How De Boer, Baumann & Company Can Help

At De Boer, Baumann & Company, we understand that legislative changes can have significant implications for not-for-profit organizations. Our team helps clients interpret emerging policy developments, assess financial risks and opportunities, and plan strategically in response to evolving regulations.

By staying informed and engaged, not-for-profits can navigate uncertainty with confidence, protecting their resources, strengthening compliance, and continuing to deliver vital services to the communities they serve.

To read the full article by Geoffrey Paul, please visit The NonProfit Times.

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Harnessing AI: Unlocking Opportunities for Not-for-Profits of All Sizes

Each year, the world loses roughly 32 million acres of natural forest, an area comparable to the entire state of Florida. Much of this destruction results from illegal logging, contributing to climate change and increasing the likelihood of diseases spreading between animals and humans. Addressing deforestation is a complex, global challenge, but one innovative …

Each year, the world loses roughly 32 million acres of natural forest, an area comparable to the entire state of Florida. Much of this destruction results from illegal logging, contributing to climate change and increasing the likelihood of diseases spreading between animals and humans. Addressing deforestation is a complex, global challenge, but one innovative not-for-profit has demonstrated that technology and creativity can offer a path forward.

Protecting Forests Through AI and Sound

Rainforest Connection, a not-for-profit based in Katy, Texas, developed a unique approach that leverages artificial intelligence (AI) and audio technology to combat illegal deforestation. Their system uses solar-powered recorders to continuously capture the natural sounds of the forest. These recordings are uploaded to the cloud, where an AI model analyzes the data to detect and even predict illegal logging activity.

What makes this approach groundbreaking is its predictive power. The AI can forecast where illegal logging is likely to occur up to five days in advance, with an accuracy rate of 96%. Experts estimate that widespread adoption of similar technologies could reduce illegal logging by as much as 35% globally.

AI’s Expanding Role in Social Good

Rainforest Connection’s work is just one example of how AI can be harnessed for positive change. The Nature Conservancy has deployed AI and camera systems to detect invasive species before they spread. The American Red Cross integrates AI and satellite imagery to assess disaster-related infrastructure damage. Similarly, the International Fund for Agricultural Development (IFAD) uses AI to analyze data, improve insights, and more effectively target assistance to vulnerable communities.

The potential applications of AI for mission-driven organizations are vast. As the technology evolves faster than any innovation before it, not-for-profits have a remarkable opportunity to responsibly integrate AI to enhance impact, improve efficiency, and strengthen fundraising and outreach.

Understanding AI Adoption in the Not-for-Profit Sector

Despite its potential, AI adoption among not-for-profits remains limited. A survey conducted by Google for Not-for-Profits, which included responses from 4,600 not-for-profit professionals, revealed that while 80% of managers believe AI could apply to their work, two-thirds identified a lack of familiarity as the primary barrier to adoption. Many organizations use AI tools for individual tasks but have not yet implemented them organization-wide.

Larger organizations may have more resources to explore AI, but smaller not-for-profits can also benefit significantly. Generally, not-for-profits can approach AI integration in two ways:

  1. Using Software-as-a-Service (SaaS) AI-powered solutions to enhance specific functions.

  2. Building custom AI tools and ecosystems to address mission-critical challenges.

Using Software-as-a-Service AI

The growing marketplace of AI-enabled SaaS platforms offers accessible entry points for not-for-profits. These tools can optimize operations, strengthen donor engagement, and reduce manual workloads, all without requiring specialized technical expertise or major investments.

Examples include:

  • Donor and relationship management: Platforms like HubSpot and Salesforce offer AI-powered CRM systems that help automate fundraising efforts, personalize communications, and track donor interactions more effectively.

  • Content creation and marketing: Tools such as Jasper AI, Writesonic, and Surfer SEO assist in generating professional content and improving visibility across digital channels.

  • Productivity and collaboration: Applications like Notion, Otter, Coda, and Taskade increase organizational efficiency by streamlining workflows and documentation.

  • Communication and coordination: AI-enhanced collaboration platforms such as Slack and Microsoft Teams help improve real-time engagement and information sharing.

  • Project management: Solutions like Asana and Trello integrate AI features that automate task prioritization and project tracking.

  • Creative design and media: Tools such as Canva, Adobe Firefly, Runway, and Pictory AI make it easier to develop visual and video materials for campaigns.

  • Generative AI assistants: Platforms like ChatGPT, Microsoft Copilot, Google Gemini, Meta AI, and Anthropic’s Claude provide intuitive chat interfaces that function as personal digital assistants, helping staff with research, communication, and administrative work.

 

By adopting these tools, even small and mid-sized not-for-profits can modernize operations, conserve resources, and improve overall efficiency. However, successful implementation requires adequate training and thoughtful change management to ensure staff are comfortable and confident using these technologies.

Building Custom AI Solutions to Maximize Impact

For organizations ready to take a deeper step into AI integration, building custom solutions can transform how they deliver their missions. These initiatives often involve tailoring AI applications or combining existing tools to address unique challenges faced by the organization.

Step 1: Define the Problem Creatively

The foundation of any successful AI initiative is identifying the right problem to solve. By rethinking traditional approaches, staff can discover innovative use cases where AI can make a meaningful difference. This stage requires open-mindedness, questioning long-standing processes, and imagining how they might evolve with technology. The creativity behind this step often determines the level of impact achieved.

Step 2: Experiment and Test

Once potential applications are identified, organizations should start small. A culture of experimentation allows teams to test ideas through low-cost proof-of-concept projects before committing extensive resources. This iterative approach helps refine solutions, uncover new insights from data, and reduce the risks of full-scale implementation.

Step 3: Engage Technical Expertise

Smaller not-for-profits may not have in-house data scientists or AI engineers, but they can still access technical talent in creative ways:

  • Volunteers: Recruit volunteers with AI or data backgrounds to assist in developing proof-of-concept solutions.

  • Student partnerships: Collaborate with universities through capstone projects, internships, or student innovation clubs interested in real-world problem-solving.

  • Pro bono partnerships: Some technology firms are open to supporting not-for-profit initiatives by donating staff time or expertise, particularly when there’s clear alignment with the organization’s mission.

  • Hackathons: Hosting or joining hackathons can help generate innovative solutions quickly while building connections with skilled technologists and potential long-term collaborators.

 

Before engaging technical partners, it’s essential to define the project’s scope, objectives, and data requirements to ensure feasibility and alignment with organizational goals.

Establishing Responsible AI Policies

As not-for-profits explore AI, it’s important to implement policies that promote ethical, transparent, and mission-aligned use of technology. Larger organizations may formalize comprehensive AI governance frameworks, while smaller ones can start by setting clear boundaries for acceptable use.

A responsible AI policy typically includes:

  • Ethical guidelines and accountability measures.

  • Compliance with regulatory and privacy requirements.

  • Safeguards for data security and confidentiality.

  • Defined risk management protocols.

 

Such policies foster trust among stakeholders and ensure that innovation aligns with organizational values. They also promote awareness and training, helping staff understand both the capabilities and limitations of AI systems.

An organization’s approach to AI should reflect its culture and tolerance for risk. Some may adopt a cautious, conservative stance, while others embrace experimentation. A well-designed policy provides flexibility while maintaining integrity and transparency.

Managing Change and Designing for People

As organizations grow in their AI journey, managing the human side of technological transformation becomes essential.

Change management ensures that staff adopt and effectively use new tools. AI solutions often require shifts in workflow or responsibilities, and employees may initially be skeptical of their outcomes. Successful change management includes transparent communication, clear expectations, and hands-on training to build trust in the new systems.

Human-factored design is equally critical. AI tools should complement human judgment, not replace it. Designing systems that are intuitive, ethical, and accessible helps ensure staff can override or adjust AI recommendations when necessary. Involving end-users early in the design process leads to higher adoption rates and better outcomes.

Looking Ahead

Artificial intelligence is becoming more visible across the not-for-profit sector, and many organizations are beginning to explore how these tools might fit into their work. While AI is still developing, staying aware of emerging trends can help leaders make thoughtful, informed decisions as the landscape evolves.

At De Boer, Baumann & Company, we continue to follow developments that may affect the not-for-profit community. Understanding which changes are relevant, which can be set aside, and how new tools may influence operations in the future can help organizations stay adaptable and prepared.

To read the full article by Sajit Joseph, please visit The NonProfit Times.

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Employee Spotlight: Jon Coffey, CPA

Since joining De Boer, Baumann & Company as an intern in 2012, Jon Coffey has built a remarkable career defined by dedication, curiosity, and a drive to make a difference. Over the years, Jon’s journey from intern to Member of the firm reflects both his professional excellence and his commitment to helping others succeed. …

Since joining De Boer, Baumann & Company as an intern in 2012, Jon Coffey has built a remarkable career defined by dedication, curiosity, and a drive to make a difference. Over the years, Jon’s journey from intern to Member of the firm reflects both his professional excellence and his commitment to helping others succeed.
 
Jon specializes in tax compliance and planning, financial statement preparation, compilations, reviews, and general business consulting for clients in industries ranging from agriculture and manufacturing to restaurants, trade services, and real estate. His ability to blend deep technical knowledge with a forward-thinking mindset makes him a trusted advisor to clients and colleagues alike. A strong advocate for innovation, Jon actively contributes to DBC’s Firm Processes Committee, Human Resources Task Force, SALT Group, and Ag Niche Team. He also plays an integral role in recruiting and mentoring interns, sharing his expertise and enthusiasm with the next generation of professionals.
 
Outside the office, Jon calls Grand Haven home, where he enjoys life with his wife Emily, their two energetic sons Callan and Jude, and their beloved Chocolate Lab Tully. Whether it’s building forts, riding bikes, or playing sports, the Coffey family keeps life full of energy and laughter.
 
As a loyal Detroit Lions fan, Jon jokes that there’s one question he’s still waiting to see answered:
“What year will the Detroit Lions win the Super Bowl?” 
 
Jon’s leadership, innovation, and heart embody what makes DBC a great place to work. We’re proud to celebrate his ongoing contributions and the positive impact he continues to make across the firm and community.
 
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Best Practices for Internal Controls in Not-For-Profit Organizations

For Not-For-Profit organizations, every dollar counts—and so does every decision. Strong internal controls are essential to ensuring that funds are managed responsibly, risks are minimized, and your organization’s mission stays on track.  Internal controls aren’t just about preventing fraud or errors—they’re about establishing a culture of transparency and accountability that builds trust with donors, …

For Not-For-Profit organizations, every dollar counts—and so does every decision. Strong internal controls are essential to ensuring that funds are managed responsibly, risks are minimized, and your organization’s mission stays on track. 

Internal controls aren’t just about preventing fraud or errors—they’re about establishing a culture of transparency and accountability that builds trust with donors, board members, and the community. Whether your Not-For-Profit organization is large or small, implementing sound control practices can safeguard assets and strengthen long-term sustainability. 

 

Why Internal Controls Matter 

Not-For-Profits operate under unique financial pressures and public expectations. Donors, grantors, and regulatory bodies all expect accurate reporting and responsible stewardship of resources. Internal controls provide the framework to meet those expectations. 

An effective system of internal controls helps your organization: 

  • Protect assets from loss or misuse 
  • Ensure the accuracy of financial reporting 
  • Promote compliance with laws and funding requirements 
  • Improve operational efficiency through clear procedures 
  • Build confidence among stakeholders and funding partners 

 

Ultimately, strong internal controls help ensure your Not-For-Profit can continue to fulfill its mission with integrity and consistency. 

 

Key Components of an Effective Internal Control System 

While every Not-For-Profit’s operations are unique, the following components are essential to a well-designed internal control framework: 

1. Segregation of Duties 

One of the most effective safeguards against errors or misuse of funds is separating responsibilities among multiple people. For example, the person who authorizes a payment should not also handle check signing or reconciliation. Even in small organizations, rotating duties or adding periodic oversight by board members can strengthen accountability. 

2. Clear Authorization and Approval Processes 

Establish written policies outlining who has the authority to approve transactions, sign checks, or enter into contracts. Consistent approval processes ensure decisions are reviewed appropriately and in line with your organization’s financial policies. 

3. Accurate Recordkeeping and Documentation 

Maintain detailed records for all financial activities, including invoices, receipts, and grant documentation. Digital accounting systems and cloud-based tools can simplify recordkeeping and improve accuracy, making it easier to track spending and respond to audit inquiries. 

4. Regular Reconciliations and Reviews 

Reconcile bank accounts, credit cards, and grant funds regularly to detect discrepancies early. Monthly or quarterly financial reviews by leadership or the board can help identify issues before they escalate. 

5. Oversight by the Board and Finance Committee 

Active oversight from the board of directors or a dedicated finance committee is critical. Reviewing financial statements, approving budgets, and evaluating risk management policies are all part of maintaining strong governance. Board involvement reinforces transparency and demonstrates accountability to external stakeholders. 

6. Use of Technology and Access Controls 

Implement accounting software with built-in security features, such as user access controls and audit trails. Limiting access to sensitive financial systems reduces the risk of unauthorized activity and ensures data integrity. 

7. Continuous Training and Improvement 

Internal controls are only as strong as the people who use them. Provide ongoing training to staff and volunteers on financial policies, reporting requirements, and ethical standards. Regularly review and update policies as your organization grows or as regulations change. 

 

Building a Culture of Accountability 

The most successful internal control systems are supported by an organizational culture that values integrity and transparency. When leadership models ethical behavior and open communication, staff are more likely to follow suit. 

Encourage employees and volunteers to raise concerns or suggest improvements to existing procedures. A proactive, collaborative approach to accountability fosters trust—both internally and with the communities you serve. 

 

How De Boer, Baumann & Company Can Help 

At De Boer, Baumann & Company, we understand that strong internal controls are vital to the success and sustainability of Not-For-Profit organizations. Our experienced team partners with Not-For-Profits to assess current systems, identify areas for improvement, and design practical, effective control frameworks that align with your mission. 

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Audit Requirements and Compliance for Not-For-Profits

For Not-For-Profit organizations, transparency and accountability are the foundation of trust. Whether your funding comes from grants, donations, or community partnerships, stakeholders expect assurance that resources are being managed responsibly. A well-executed audit not only fulfills regulatory requirements—it also demonstrates your organization’s commitment to integrity and good governance.  If your Not-For-Profit is preparing for …

For Not-For-Profit organizations, transparency and accountability are the foundation of trust. Whether your funding comes from grants, donations, or community partnerships, stakeholders expect assurance that resources are being managed responsibly. A well-executed audit not only fulfills regulatory requirements—it also demonstrates your organization’s commitment to integrity and good governance. 

If your Not-For-Profit is preparing for its first audit or looking to strengthen existing compliance practices, understanding what’s required and how to prepare can help you navigate the process with confidence. 

 

Why Audits Matter for Not-For-Profits

Audits provide an independent, objective review of your organization’s financial health. Beyond satisfying external requirements, they offer valuable insights that can help you improve internal processes, strengthen financial management, and enhance your reputation with funders. 

A thorough audit can help your organization: 

  • Reinforce donor confidence through verified financial reporting 
  • Identify opportunities to improve internal controls and efficiency 
  • Ensure compliance with funding agreements and state or federal laws 
  • Provide leadership and the board with reliable data for decision-making 

Many funding agencies and state regulators require audits once certain thresholds are met. Even when not required, voluntary audits can elevate your organization’s credibility and readiness for future growth. 

 

Understanding Audit Requirements 

Audit requirements for Not-For-Profits vary based on size, revenue, and funding sources. Below are some key areas to be aware of. 

Federal and State Thresholds 

Under the Uniform Guidance, organizations that expend $1 million or more in federal funds during a fiscal year are required to undergo a Single Audit. This audit examines both the organization’s financial statements and its compliance with applicable federal program requirements. (Note: The threshold increased from $750,000 to $1 million for fiscal years ending on or after September 30, 2025.) 

Michigan State Requirements 

At the state level, requirements vary by jurisdiction. In Michigan, charitable organizations that solicit contributions from the public must register with the Attorney General’s Charitable Trust Section. Updated thresholds now require: 

  • Audited financial statements for organizations with annual gross receipts exceeding $550,000, or total assets exceeding that amount. 
  • Reviewed or audited financial statements for organizations with gross receipts between $300,000 and $550,000. 
  • Organizations below these thresholds may submit compiled financial statements or other required filings. 

 

When calculating total annual gross receipts, the IRS notes that “contributions in the form of grants or similar payments from local, state, or federal government sources, as well as foreign governments,” are excluded (Form 990 instructions). This distinction can make a significant difference in determining whether your organization meets the audit threshold.

Michigan also allows a one-time audit waiver, offering limited flexibility for qualifying organizations that would otherwise be required to submit audited financials. 

Understanding both the updated federal Single Audit threshold and Michigan’s revised state-level audit requirements enables Not-For-Profits to plan proactively, allocate resources appropriately, and ensure compliance with all applicable financial reporting regulations. 

Grant and Donor Requirements 

Many grantors, particularly government agencies and private foundations, require audited financial statements as part of the grant application or renewal process. Meeting these expectations can position your organization for continued funding and demonstrate sound fiscal stewardship. 

Board or Bylaw Provisions 

Some Not-For-Profits choose to include audit requirements in their bylaws or internal policies. This proactive approach encourages consistent oversight and builds trust with stakeholders and community partners. 

 

Preparing for a Successful Audit 

A successful audit starts long before auditors arrive. By maintaining strong financial practices throughout the year, your organization can minimize stress and ensure a smooth process. 

Keep Records Organized 

Accurate, up-to-date financial records are essential. Maintain clear documentation for all transactions—receipts, invoices, payroll records, grant agreements, and bank reconciliations. Organized records allow auditors to verify information quickly and efficiently. 

Evaluate Internal Controls 

Strong internal controls protect your organization from errors and misuse of funds. Review your approval processes, segregation of duties, and documentation practices regularly to ensure they remain effective. 

Communicate Early and Often 

Reach out to your auditor early in the year to discuss timelines, expectations, and any changes in operations or funding. Clear communication prevents surprises and helps both parties stay aligned throughout the process. 

Track Grant and Program Compliance 

Maintain detailed records of how grant funds are used and ensure that all reporting requirements are met. Compliance documentation not only satisfies funders but also demonstrates your organization’s commitment to transparency and accountability. 

 

Building a Culture of Accountability 

Compliance isn’t just about passing an audit—it’s about building an organizational culture that values accuracy, transparency, and responsibility. Regular policy reviews, staff training, and active board engagement can help your Not-For-Profit organization stay compliant and resilient. 

When accountability becomes part of your culture, your organization is better equipped to adapt to evolving regulations and continue delivering on its mission. 

 

How De Boer, Baumann & Company Can Help 

At De Boer, Baumann & Company, we understand the challenges and opportunities that come with running a Not-For-Profit organization. Our dedicated team provides audit and assurance services designed specifically for the Not-For-Profit sector, combining technical expertise with a deep appreciation for mission-driven work. 

From preparing for your next audit to strengthening internal controls and meeting compliance standards, we partner with you to build confidence in your financial management practices—so you can focus on what truly matters: serving your community and advancing your mission. 

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Windows 10 Expires in 2025 — Here’s Why You Can’t Afford to Wait

On October 14, 2025, Microsoft will officially end support for Windows 10. For executives, IT managers, CFOs, and business owners, this isn’t just another software update — it’s a critical business decision point. Understanding why Windows 10 is being retired and what it means for your organization will help you stay secure, compliant, and …

On October 14, 2025, Microsoft will officially end support for Windows 10. For executives, IT managers, CFOs, and business owners, this isn’t just another software update — it’s a critical business decision point. Understanding why Windows 10 is being retired and what it means for your organization will help you stay secure, compliant, and competitive.

Why Is Microsoft Retiring Windows 10?

Microsoft’s decision reflects a long-term strategy to advance security, performance, and support models. Key drivers include:

  1. Stronger Security Standards
    Cybersecurity threats are evolving faster than ever. Windows 11 includes modern, hardware-based security features like TPM 2.0 and Secure Boot — protections that Windows 10 simply cannot deliver.
  2. Optimized Performance
    Windows 11 is engineered for today’s processors and architectures, delivering faster load times, longer battery life, and better multitasking.
  3. A Modern User Experience
    With features like Snap Layouts, improved virtual desktops, and a streamlined interface, Windows 11 is built for hybrid work environments.
  4. Streamlined Support
    By focusing on current platforms, Microsoft can deliver stronger, more consistent updates while reducing the complexity of supporting outdated systems.

 

Why Your Business Should Upgrade Now

Waiting until the deadline carries risks — both operational and financial. Here’s why upgrading to Windows 11 is a smart move today:

  • Security Protection: Prevent exposure to unpatched vulnerabilities once Windows 10 support ends.
  • Compliance Assurance: Stay aligned with industry and regulatory requirements (especially in finance, healthcare, and legal).
  • Productivity Gains: Leverage Snap Layouts, virtual desktops, and AI-powered tools like Windows Copilot to streamline work.
  • Cloud & Hybrid Integration: Seamlessly connect with Microsoft 365, Azure, and other cloud tools.
  • Future-Proofing: Ensure compatibility with next-gen hardware and software.
  • Cost Savings: Avoid last-minute upgrade costs, emergency IT work, or expensive extended support agreements.

 

How DB&C NetWerks Can Help

Not sure if your systems are ready for Windows 11? That’s where we come in.

Our team provides hands-on support to help you plan a seamless transition, including:

  • On-site assessments of your current hardware fleet
  • Compatibility reports and tailored recommendations
  • Cost analysis: upgrade vs. replacement
  • End-to-end migration planning and execution

Whether you need to upgrade existing machines or replace outdated systems, we’ll guide you to the smartest, most cost-effective solution for your business.

The Bottom Line

The shift to Windows 11 is more than just a technical upgrade — it’s a strategic investment in your company’s security, agility, and long-term success. Don’t wait until it’s too late. The time to plan is now.

If you are unsure how this may affect your business, contact Paul Gust at DB&C NetWerks for guidance.

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Choosing the Right Financial Expertise for Your Business: Bookkeeper vs. Accountant vs. Controller vs. CFO

Empowering Businesses to ThriveAt De Boer, Baumann & Company, our mission has remained constant since 1934: to empower our clients and our community for success. Over the decades, we’ve walked alongside West Michigan businesses through every stage of growth, providing trusted accounting services rooted in Relationships, Experience, Communication, Integrity, Passion, and Excellence — our …

Empowering Businesses to Thrive

At De Boer, Baumann & Company, our mission has remained constant since 1934: to empower our clients and our community for success. Over the decades, we’ve walked alongside West Michigan businesses through every stage of growth, providing trusted accounting services rooted in Relationships, Experience, Communication, Integrity, Passion, and Excellence — our RECIPE.

As your business evolves, so do your financial needs. Knowing which level of financial expertise is right for your stage of growth can be the difference between simply keeping up — and confidently moving forward. Our Client Accounting and Advisory Services (CAAS) are designed to meet you where you are and scale with you as you grow.

Bookkeeper: Building a Solid Foundation

Focus: Daily financial transactions and recordkeeping
 Best for: Small businesses needing basic financial management

Bookkeepers manage the nuts and bolts of your business’ finances.

Responsibilities may include:

  • Recording income and expenses
  • Managing accounts payable and receivable
  • Reconciling bank statements
  • Processing payroll
  • Maintaining accurate financial records

Signs You’re Ready for This Role:
 If you’re launching or running a small business, a bookkeeper can keep your financial data organized and accurate. This ensures bills get paid and payroll runs smoothly. Bookkeepers are ideal when you need strong transactional support.

Accountant: Turning Records into Reports

Focus: Financial compliance and reporting
 Best for: Companies needing reliable monthly closes and accurate statements

Accountants build on the foundation provided by bookkeepers.

Accountants can assist with:

  • Overseeing bookkeeping activity
  • Reconciling balance sheet accounts and accrual adjustments invoices
  • Performing month-end and year-end closes
  • Preparing financial statements and management reports

Signs You’re Ready for This Role:
 As your operations grow and financial complexity increases, an accountant ensures your records meet required standards. They can prepare timely and reliable financial statements and provide insight into your financial health. This role is essential when you need accurate reporting to make informed operational decisions.

Controller: Driving Accuracy and Insights

Focus: Financial oversight and internal controls
 Best for: Companies that have clean books but need deeper financial insights

Controllers act as the quarterback of the accounting function.

Controller services may include:

  • Supervising bookkeepers and accountants
  • Managing financial reporting and compliance
  • Developing internal controls to reduce risk
  • Providing budgeting support and financial analysis

Signs You’re Ready for This Role:
 If your books are clean but you’re missing timely reports, accurate budgeting, or risk controls, a controller bridges that gap. They implement financial processes, strengthen internal controls, and provide data-driven analysis. This is ideal when you want more robust reporting and operational efficiency without the cost of a CFO.

CFO: Steering Strategic Growth

Focus: Long-term financial planning and strategy
 Best for: Companies ready to scale, raise capital, or optimize performance

Chief Financial Officers look beyond the numbers to shape your business’s future. They:

  • Develop and execute financial strategies
  • Provide forecasting and risk analysis
  • Guide funding and capital structure decisions
  • Interpret management reports for strategic planning

Signs You’re Ready for This Role:
 When you’re preparing to expand, raise capital, or plan long-term strategy, a CFO provides the vision and modeling you need. They guide funding, oversee risk, and align financial strategy with business goals. This role is critical when you need big-picture financial leadership to drive growth and profitability.

Which One Is Right for Your Business?

Role

Focus

Key Responsibilities

Best For Businesses That…

Bookkeeper

Daily financial transactions

Record keeping, payroll, reconciliations, paying bills, maintaining ledgers

Need basic financial management and accurate day-to-day records

Accountant

Financial compliance & reporting

Overseeing bookkeeping, preparing statements, reconciling accounts, month-end close

Need reliable financial reports and compliance with accounting standards

Controller

Financial oversight & analysis

Managing reporting, developing internal controls, budgeting, forecasting, providing insights

Have clean books but need better financial reporting and deeper insights

CFO

Strategic financial planning

Long-term strategy, forecasting, risk management, capital structure, high-level decision-making

Are ready to scale, raise capital, or optimize performance

Partnering for Your Growth

There’s no one-size-fits-all approach to building a strong financial function — and you don’t have to figure it out alone.

At DBC, we recognize that every business is on its own journey. That’s why our Client Accounting and Advisory Services (CAAS) are designed to meet you where you are and scale with you as you grow. Whether you’re focused on staying compliant, improving financial visibility, or planning for expansion, we’ll help you build a financial structure that supports both today’s operations and tomorrow’s ambitions.

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Occupations Qualified for Tip Deduction Released 

On September 2, 2025, the Treasury Department released a draft list of 68 occupations eligible for the new “no tax on tips” deduction. This deduction is part of the “One Big Beautiful Bill Act,” signed into law on July 4, 2025, and applies to federal income taxes for the 2025—2028 tax years.   The deduction …

On September 2, 2025, the Treasury Department released a draft list of 68 occupations eligible for the new “no tax on tips” deduction. This deduction is part of the “One Big Beautiful Bill Act,” signed into law on July 4, 2025, and applies to federal income taxes for the 2025—2028 tax years.  

The deduction is available for a maximum of $25,000 in qualifying tips per person, per year. It is structured as a “below-the-line” deduction, meaning it is available to taxpayers who take the standard deduction, but is not used to compute adjusted gross income (AGI). 

Here is the Treasury’s draft list of occupations: 

Beverage & Food Service:  

  • Bartenders 
  • Wait staff 
  • Food servers, non-restaurant 
  • Dining room and cafeteria attendants and bartender helpers 
  • Chefs and cooks 
  • Food preparation workers 
  • Fast Food and Counter Workers 
  • Dishwashers 
  • Host staff, restaurant, lounge, and coffee shop 
  • Bakers  

 

Entertainment and Events:  

  • Gambling dealers 
  • Gambling change persons and booth cashiers 
  • Gambling cage workers 
  • Gambling and sports book writers and runners 
  • Dancers 
  • Musicians and singers 
  • Disc jockeys (except radio) 
  • Entertainers and performers 
  • Digital content creators 
  • Ushers, lobby attendants and ticket takers 
  • Locker room, coatroom and dressing room attendants  

 

Hospitality and Guest Services:  

  • Baggage porters and bellhops 
  • Concierges 
  • Hotel, motel and resort desk clerks 
  • Maids and housekeeping cleaners 

 

Home Services: 

  • Home maintenance and repair workers 
  • Home landscaping and groundskeeping workers 
  • Home electricians 
  • Home plumbers 
  • Home heating/air conditioning mechanics and installers 
  • Home appliance installers and repairers 
  • Home cleaning service workers 
  • Locksmiths 
  • Roadside assistance workers 

 

Personal Services: 

  • Personal care and service workers 
  • Private event planners 
  • Private event and portrait photographers 
  • Private event videographers 
  • Event officiants 
  • Pet caretakers 
  • Tutors 
  • Nannies and babysitters 

 

Personal Appearance and Wellness:

  • Skincare specialists 
  • Massage therapists 
  • Barbers, hairdressers, hairstylists and cosmetologists 
  • Shampooers 
  • Manicurists and pedicurists 
  • Eyebrow threading and waxing technicians 
  • Makeup artists 
  • Exercise trainers and group fitness instructors 
  • Tattoo artists and piercers 
  • Tailors 
  • Shoe and leather workers and repairers 

 

Recreation and Instruction: 

  • Golf caddies 
  • Self-enrichment teachers 
  • Recreational and tour pilots 
  • Tour guides and escorts 
  • Travel guides 
  • Sports and recreation instructors 

 

Transportation and Delivery:  

  • Parking and valet attendants 
  • Taxi and rideshare drivers and chauffeurs 
  • Shuttle drivers 
  • Goods delivery people 
  • Personal vehicle and equipment cleaners 
  • Private and charter bus drivers 
  • Water taxi operators and charter boat workers 
  • Rickshaw, pedicab, and carriage drivers 
  • Home movers  

 

The requirements for the OBBB tip exclusion are a set of temporary tax deductions for qualified tipped workers, available for tax years 2025 through 2028. The deduction is taken on an individual’s tax return and is subject to income limitations.  

 

Eligibility Requirements: To be eligible for the deduction, a worker must meet the following criteria:  

  • Be a qualified tipped worker: Must be an employee or independent contractor in an occupation that customarily and regularly received tips before 2025. See the draft list of qualifying occupations. 
  • Have qualified tips: The tips must be voluntarily paid by a customer. This includes tips received in cash, charged on a credit card, or from a tip-sharing arrangement. Mandatory service charges are not eligible. 
  • Properly report tips: The tips must be reported to the IRS on either a Form W-2 (for employees) or Form 1099 (for independent contractors). 
  • File jointly if married: If married, the couple must file a joint tax return to claim the deduction. 
  • Provide a Social Security Number (SSN):  Anyone claiming the deduction must include their SSN on their tax return.  

 

Deduction Limitations: The maximum deduction is limited and phases out for high-income earners:  

  • Maximum deduction: The maximum annual deduction is $25,000. 
  • Income phase-out: The deduction is gradually reduced for taxpayers with a modified adjusted gross income (MAGI) over a certain amount: 
  • Single filers: The deduction begins to phase out for MAGI over $150,000. 
  • Married filing jointly: The deduction begins to phase out for MAGI over $300,000.  

 

Other Considerations: 

  • Does not apply to payroll taxes: While tips are deductible from the worker’s income when figuring their federal income tax, they are still subject to Social Security and Medicare taxes or self-employment tax in the case of independent contractors. 
  • Temporary provision: The tip deduction is a temporary measure, scheduled to expire after December 31, 2028. 
  • Not tax-free: This is a deduction, not an exemption. So, the worker will still have to report all tip income, which will then be reduced by the deduction amount. 
  • State tax implications: The effect on state income taxes will depend on the worker’s state’s tax laws.  

 

In conclusion, understanding which occupations qualify for tip deductions is essential for both employees and employers seeking to maximize their tax benefits. By staying informed about the specific criteria that define qualified tips and knowing how different occupations fit into this framework, individuals can ensure compliance while optimizing their tax strategies. As tax laws continue to evolve, it remains crucial for stakeholders to stay updated on legislative changes and seek professional advice as needed to navigate the complexities of tip income and deductions effectively. 

Contact our office if you have questions or need assistance.

About us

De Boer, Baumann & Company provides professional accounting, tax, and business advisory services to individuals and businesses in West Michigan and the surrounding areas. With expertise in a variety of industries, DBC specializes in comprehensive and innovative solutions to help clients achieve their financial goals.