Foundations

A foundation is an organization created especially for the purpose of supporting one or more other organizations or causes. There are public foundations and private foundations. Many foundations are affiliated with operating organizations that they support (e.g., college and university foundations, hospital foundations, church or denominational foundations, etc.). Private foundations are often formed by an individual, a family, or a business for the purpose of making grants to operating charities, churches, and other publicly-supported 501(c)(3) organizations. Private foundations are subject to an array of tax laws that apply uniquely to them, and that are very different from the laws that apply to public foundations or public charities. Our team at BMWL has extensive experience serving foundations – both public and private. Many foundation leaders have come to BMWL for services because of our strong reputation for helping them make sure the financial bases are covered. They often come to us after working with another accounting firm, and they share with us that they were concerned that their previous firm was not bringing matters to their attention that needed to be addressed. After asking around among leaders in the nonprofit community, they learned that BMWL is well known for just that – taking a comprehensive and highly professional approach to providing services that include communicating important matters to our clients on a proactive and consistent basis.

If you are interested in learning more about BMWL and how we can serve your foundation, please reach out to our team!

Specific Examples of How We Have Served Foundations

A large private foundation sought our assistance in providing independent auditing services. The foundation had previously been served by a “Big Four” accounting firm. In addition to serving as the foundation’s independent audit firm, we have assisted the foundation in addressing accounting matters related to investing in “alternative investments” such as hedge funds, limited partnership interests, and other similar assets. Our firm also advises the foundation with respect to key tax compliance matters.

A large financial institution served as trustee of a sizable private foundation. The financial institution was concerned that there were compliance issues that were not being adequately addressed. The foundation engaged BMWL to assist in identifying and addressing the issues and to audit the financial statements. One of the “Big Four” accounting firms had previously provided services for the foundation. Our team identified significant compliance issues requiring attention and proactively assisted the foundation in addressing those issues. As a result of our efforts, the foundation received large refunds from the Internal Revenue Service for taxes that had been overpaid in prior years.

Another key area in which we assist our foundation clients is addressing their practices for establishing and documenting executive compensation and addressing the issue of related party transactions. It is critically important for foundations to handle executive compensation properly. Additionally, the tax laws for private foundations prohibit many types of related party transactions. Improper handling of these important matters can result in negative publicity as well as possible (very significant) penalties for both the foundation and the individuals involved. Our BMWL professionals can help your foundation successfully navigate the rules related to executive compensation and related party transactions – and reduce the risk to your foundation and its leaders.

We assist numerous foundations in areas such as internal controls; board governance matters; risk management; foreign grant-making and direct foreign activities; expenditure responsibility documentation; corporate structure analysis; federal, state, and local tax compliance; representation before tax authorities; and much more.

Services for Foundations

Foundations exist to support other organizations or people with specific needs. Our BMWL team has extensive experience serving foundations of all types, including both private and public foundations. BMWL serves as the accounting firm for numerous excellent foundations of all sizes, including small foundations and others with asset bases of several hundred million dollars. The fact that all of our clients have as their mission improving the lives of others in some way is a powerful inspirational force for our entire team!

Audit & Assurance Services

The BMWL Difference

Not all audits or auditors are equal. There are big differences.

When selecting an audit firm, it can be difficult to discern the differences among firms. After all, every firm says they are great at what they do, and they promise to provide excellent service. BMWL’s overall approach to serving your organization is very different from that of other firms and involves a unique and exclusive combination of elements:

A dedicated team with extensive experience providing audit and assurance services for nonprofit organizations.
A team of tax professionals dedicated uniquely and specifically to serving nonprofit organizations in matters of federal, state, and local taxes of all types.
Nationally-known expertise and leadership in accounting and tax matters related to nonprofit organizations, including direct involvement in national policy and leadership roles seeking to reduce the risk of inappropriate government intervention in the religious and nonprofit sector…expertise that we bring to you. (For an example of our national leadership in these areas, see www.religiouspolicycommission.org.)
Services that include obtaining an understanding of your key internal controls over cash transactions and accounting activities sufficient to permit us to assess the risk of material misstatement in your financial statements and otherwise perform the audit engagement.
Use of computer-aided data extraction analysis to aid in potentially identifying fraud or other audit issues that require attention.
Obtaining an understanding of key elements of your organization’s tax compliance to help you identify opportunities to take better advantage of exemptions and to reduce your organization’s compliance risk.
Proactive, clear, and highly professional communication and reporting of audit observations and practical recommendations to your leadership team and governing body.
An array of helpful resources and education to help your leadership team stay current with respect to financial, tax, and regulatory developments affecting your church or ministry.

We do much more than respond to your questions about issues on your radar screen. We come alongside your team to help you identify important issues that are not on your radar screen. And, we provide clear recommendations for practical solutions to address the issues.

Audits

An audit is the highest level of assurance BMWL can provide with respect to an organization’s financial statements. Audited financial statements provide the organization’s governing body with the auditor’s opinion that the financial statements are presented fairly, in all material respects, in conformity with the method of accounting utilized. The opinion offers reasonable but not absolute assurance with respect to the financial statements to which it applies.

In an audit, BMWL obtains an understanding of the organization’s internal control and assesses fraud risk as it relates to the financial statements. We also corroborate the amounts and disclosures included in the financial statements by obtaining audit evidence through inquiry, physical inspection, observation, third-party confirmations, examination, analytical procedures and other procedures. An audit engagement performed by BMWL also includes an assessment of certain aspects of tax compliance by the organization.

In obtaining an understanding of internal control, BMWL typically focuses significantly on the cash processing activities of an organization, including the processes for receiving cash (whether in currency, check, or electronic form), the processes for accounting for cash, and the processes for disbursing cash either to suppliers or employees.

An audit performed by BMWL typically results in the following reports:

BMWL’s opinion on the financial statements
Financial statements and related disclosures
BMWL’s Report on Internal Control
BMWL’s Report on the Audit Process

Reviews

Reviewed financial statements provide the organization’s governing body with comfort that, based on BMWL’s review, we are not aware of any material modifications that should be made to the financial statements for the statements to be in conformity with the method of accounting utilized. A review is substantially less in scope than an audit, and does not require obtaining an understanding of internal control, assessing the risk of fraud, or testing the organization’s records.

In a review engagement, BMWL performs procedures (primarily analytical procedures and inquiries) that will provide a reasonable basis for obtaining limited assurance that there are no material modifications that should be made to the financial statements.

A review performed by BMWL typically results in the following reports:

BMWL’s review report expressing limited assurance on the financial statements
Financial statements and related disclosures

Compilations

A compilation represents the most basic level of service BMWL provides with respect to an organization’s financial statements. In a compilation engagement, we assist management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance with respect to the financial statements. In a compilation, BMWL complies with applicable regulatory standards, which require us to have an understanding of the industry in which the client operates, obtain knowledge about the client, read the financial statements, and consider whether the financial statements appear appropriate in form and free from obvious material errors.

A compilation does not contemplate performing inquiry, analytical procedures, or other procedures ordinarily performed in a review; or obtaining an understanding of the organization’s internal control; assessing fraud risk; or testing of accounting records. Compiled financial statements may be prepared without disclosures (notes to the financial statements). The compilation report provides no assurance with respect to the financial statements.

A compilation performed by BMWL typically results in the following reports:

BMWL’s compilation report expressing no assurance on the financial statements
Financial statements and (if applicable) related disclosures

Internal Control and Tax Compliance Advisory Services

BMWL offers advisory services to assist an organization’s management in identifying internal control vulnerabilities as well as tax compliance risks and opportunities. Each engagement is tailored specifically to the needs of the organization we are serving, and is designed to offer practical and helpful recommendations for reducing risk or for taking advantage of untapped opportunities.

In performing an internal control and tax compliance advisory services engagement, BMWL’s team makes inquiries of appropriate members of an organization’s management and staff and inspects documents and records as deemed appropriate for the specific engagement. Internal control and tax compliance advisory engagements address many of the types of internal control and tax compliance matters that BMWL would typically address in an audit engagement. The report issued in connection with an advisory services engagement is not an opinion – rather it is a summary of observations and practical recommendations.

Other Services

Tax Services

The unique array of tax services we offer to nonprofit organizations is among the most extensive available in the United States. Our highly-experienced team of leaders with nationally-known expertise will professionally and efficiently help you with such matters as:

Protecting your exempt status
Professional representation before the IRS and other tax authorities
Compliance with political activity restrictions
Unrelated business income issues
Use of subsidiaries and limited liability companies (LLCs)
Executive compensation-setting practices
Properly handling conflicts-of-interest
Safely engaging in transactions with related parties
Tax implications associated with intellectual property matters
Proper acknowledgment and receipting of charitable contributions
Quid pro quo contributions (banquets, golf tournaments, auctions, etc.)
Charitable gift annuities
Charitable remainder and lead trusts
Donor-advised funds
Clergy-specific tax matters (payroll reporting, housing, etc.)
Tax compliance implications of foreign grants and activities
Mission trips and support-raising activities
Benevolence activities
Qualified tuition reduction benefit programs
Proper worker classification (employee v. contractor)
Accountable plan expense documentation requirements
Payroll tax compliance and reporting
Preparation of required tax forms and returns
State and local tax matters
Identifying and obtaining state and local tax exemptions
Identifying and obtaining Form 990 filing exemptions
Applying for recognition by the IRS of your tax exemption status
And much, much more!

Strategic Advisory Services

The BMWL team offers you an abundance of expertise to help you address important management and financial operations. Our professional team can advise you in key aspects of your administration, including:

Comprehensive risk management strategies
Strategic budgeting for improved financial position
Board member education and orientation
Board governance and operations
Policies and procedures
Executive compensation
Corporate structure and related risk analysis
Financial staffing guidelines
Improved efficiencies in financial operations
CFO consulting services
And much more!

Lean Advisory Services

All too often, nonprofit organizations pursuing their mission and purpose can be hindered by inefficient workflows, outdated systems, and overextended teams. BMWL developed our Lean Advisory Services to help nonprofits reduce inefficiencies and streamline workflows in their financial operations.

Lean Advisory Services is a specialized offering from a cross-section of BMWL’s professional services team. Lean Six Sigma combines the principles of Lean (eliminating waste) and Six Sigma (reducing variation and improving quality) to improve efficiencies and streamline workflows.

Our Lean Team begins with a Phase 1 Assessment – a general assessment of your organization’s financial operations and the systems and software that support them. One or more members of our Lean Team will come onsite and engage with your team in insightful discussions and follow-ups to help us gather necessary information and perspectives from your team. In addition to obtaining a general understanding of key relevant issues, our team also addresses how your team allocates time across tasks. The deliverable from a Phase 1 Assessment describes any of the following that we identify during the process:

Actionable opportunities for immediate improvement
Additional potential opportunities for improvement that may benefit from deeper analysis

During a Lean Advisory Services engagement, our team provides a fresh, structured, and data-informed perspective on your financial operations that can make a significant impact on your organization’s daily operations, as shared through the following testimonial from a pre-beta Lean Advisory Client of BMWL.

Our organization, Calvary Chapel of Melbourne, engaged BMWL for Lean Advisory Services on a pre-beta basis. We have an amazing team of highly skilled and experienced accounting professionals, and we knew we could ‘do it better.’ However, we didn’t know what ‘it’ was, nor ‘how to.’ We didn’t know where to start, so we engaged with BMWL for guidance. Wow! What an incredible experience it was to partner together. BMWL came alongside our team with care, respect, empathy, and valuable guided direction. Through their advice, we gained streamlined processes and procedures, reduced workloads, and increased efficiency while also decreasing team member stress. Calvary Chapel Melbourne is thankful for our partnership with BMWL, and if you believe your organization can do ‘it’ leaner, faster, better, and smarter—BMWL Lean Advisory Services will help you achieve ‘it’ with excellence.

— David M. Palmisano, Executive Pastor
Calvary Chapel of Melbourne

BMWL is currently offering Lean Advisory Services in a beta period for significantly reduced fees to current clients of the firm. Since our Lean Advisory Services represent a new service offering, we are using the beta period to refine and improve our service model. Our beta period presents a one-time opportunity for a limited number of nonprofit organizations to avail themselves of this new service at a cost that is significantly less than it will be when our beta period ends.

If you are a current BMWL client and believe your organization could benefit from doing things leaner, faster, better, and smarter…but aren’t sure where to start…BMWL is here to help. Let us know soon if you are interested in a Phase 1 Assessment with our limited-time beta period pricing.

Expert Witness Services

BMWL’s partners are highly experienced in serving nonprofit organizations and are frequently sought out by nonprofit leaders across the country to assist them in addressing some of the most challenging issues facing their organizations. Our team has the privilege of serving some of the largest and most well-known nonprofit organizations of their types in the United States. Our team’s professional writings have been published by numerous national media outlets.

Mike Batts, our managing partner, is nationally known as a thought leader in the nonprofit sector. Mike’s input on technical matters has been directly requested by members of Congress and state legislators, a state cabinet member, FASB staff, national associations of nonprofit organizations, national media, and others. Mike has briefed individual members of Congress at their request (both House and Senate) on legislative matters related to nonprofit organizations, has provided commentary to state legislative committees, and has successfully drafted and lobbied for legislation favorably affecting nonprofit organizations.

Mike has served as an expert witness with respect to matters involving technical issues for nonprofit organizations. His experience includes providing expert opinions, court testimony, and depositions in legal cases. Other partners of the firm have supported Mike’s expert witness service and also have strong capabilities in this area.

We carefully evaluate each request for expert witness services to determine if the services required are a fit for our firm. Potential areas of expert witness services we may provide include:

Tax issues and controversies involving nonprofit organizations
Accounting and auditing matters involving nonprofit organizations
Professional practice by attorneys or CPAs in the areas listed above

Resources and Education

In addition to the extensive professional services available to you, as a client of BMWL, you will have access to our exclusive and proprietary array of educational opportunities and resources created just for nonprofit organizations like yours. The BMWL team is constantly on watch for new developments and information that could be important to our clients. When new developments and information arise, we share the relevant aspects with you in our unique style – emphasizing concise, complete, practical, and plain-language explanations. Each of the resources we make available to you are truly one-of-a-kind, created by our dedicated team with the sole purpose of helping you. They include:

BMWL Nonprofit OnPoint^SM – our feature articles that provide perspective on issues impacting nonprofits and their leaders.
BMWL Nonprofit Special Alerts^SM – timely email alerts that convey important time-sensitive developments affecting nonprofit organizations.
A variety of educational events, including webinars, other broadcasts, and in-person events
Published Books – we offer at no charge to our clients published books covering key topics affecting nonprofit organizations. These practical, easy-to-read books have been used by hundreds of nonprofit leaders to improve their organizations. They are available for purchase by non-clients on Amazon.com. The books currently include:
BMWL Sample Policies, Whitepapers, and Other Resources – We offer a growing assortment of sample policies, whitepapers, and other resources to help you more effectively administer your organization.

To learn more about our various resources, please visit News & Resources.

Private Foundations Team

At BMWL, we have a dedicated team of professionals who specialize in serving nonprofit organizations classified by the IRS as private foundations. With several decades of combined experience, our team has worked closely with foundations of all sizes, from small, community-based entities to those with assets exceeding $1 billion.

This cross-functional group brings together deep expertise in tax and audit/assurance services, along with a strong understanding of the unique regulatory and operational challenges private foundations face. Our team members maintain a robust awareness of professional and authoritative guidance in practice areas related to foundations.

The Private Foundations team consists of the following professionals within BMWL:

Click Here to Contact the Private Foundations Team