New Guidelines Will Likely Impact Governmental Contributions To Nonprofit Groups
New Guidelines Will Likely Impact Governmental Contributions To Nonprofit Groups
November 11, 2021Steve Schwaller
(Arnolds Park)– Nonprofit groups that rely heavily on contributions from local governments will likely be facing some new challenges. Officials say the State Auditor’s Office is out with some new rules on that. Rod Meendering is a CPA with Winther Stave and Company in Spencer…
“The State Auditor has come out with, has documented that there’s been over six Iowa Attorney General opinions that have come out about public purpose use of funds, and they are basically saying that money given to nonprofit organizations does not meet a public purpose and that cities should no longer be making donations to nonprofit organizations.”
He says there are a few very well defined exceptions to that, however…
“They are pushing that if it’s promoting economic development and tourism that there is a possibility that it may be legit to give to a nonprofit organization but that each city would need to make that determination and have it in a resolution approving that purpose.”
Meendering says he doesn’t believe there was a specific incident somewhere that led to the crackdown…
“I don’t think there’s been a direct incident in the state that has caused it. I think they have just started looking through some old documents and stuff and realized that there’s some old laws out there that maybe haven’t been fully enforced in the past and they’re just trying to crack down on some of that.”
Winther Stave and Company provides auditing services to a number of cities in the area. Meendering says they’re notifying them of the matter now, before they begin their annual budgeting processes.
