The Nebraska Community Foundation works with community, organizational and donor-advised affiliated funds serving 250 communities located in 80 counties. NCF and its affiliated funds have reinvested $269 million in Nebraska since 1994.
The Nebraska Department of Revenue recently completed an examination of the Nebraska Community Foundation. While NCF is “tax-exempt” for income tax purposes, Nebraska law does not exempt most charitable organizations from either the payment or collection of sales and use tax. Read the letter sent to Fund Advisory Committee Leaders for more information.
Contributions must be submitted with a Contribution Submission Form. The following information must be included for each contribution listed on the form:
NCF issues receipts to donors who contribute $35 or more. Receipts can only be given to donors who have written a check or submitted a money order with their name listed on the money order as remitter. We cannot give a receipt for a gift of cash or of a money order with no remitter listed.
If your affiliated fund holds a fundraising event, note that money received when the individual gets something of value in return is not a charitable contribution; this should be noted on the Contribution Submission Form. Examples include purchase of a meal, fundraising auction items or raffle tickets.
To ensure the safety of your affiliated fund’s assets, do not send cash through the mail; please get a money order or cashier’s check for any cash received.
The Nebraska Community Foundation and its affiliated funds are not exempt from either paying or charging Nebraska and applicable local sales tax. Nebraska law exempts only a few types of nonprofit organizations from sales tax. As a result, we must (1) charge sales tax on the sale of items and certain services and admissions to events, and (2) pay sales tax on most purchases.
Nebraska and applicable local sales tax applies to a broad range of sales including admission to events and meals and sales of donated or purchased items and certain services.
When charging for an event that includes granting of admission to a meal, recreation or entertainment and the charge includes a solicitation of a contribution, the portion representing the fair market value of the benefit received is a taxable sale. If the fair market value is not separately stated, the total charge is taxable. Please contact the NCF accounting staff in advance if you are planning to sell event tickets or other items and you believe that the price may include the solicitation of a contribution.
The sales of tangible property by your affiliated fund are a retail sale and are subject to Nebraska and applicable local sales tax. This includes the sale of items at a fundraising event such as a live or silent auction, as well as the ongoing sale of items such as calendars, cookbooks or commemorative items.
Proceeds from fundraising events or activities should be submitted on separate Contribution Submission Forms. Please indicate on the Contribution Submission Form the items sold, selling price, and city and county in which they were sold. Your affiliated fund will receive the after-sales tax proceeds, and NCF will remit the sales tax to the state.
All tickets or solicitations for sales should indicate “Price includes sales tax as applicable.”
Sales tax must also be paid on all purchases of tangible property and certain services (such as printing) by NCF and its affiliated funds. Before submitting an invoice for payment please be sure that the vendor has included sales tax. If sales tax is not included, request a corrected invoice from the vendor that includes sales tax. If the vendor is from another state or is not registered to collect sales tax, we will be required to pay use tax directly to the Nebraska Department of Revenue. Use tax is imposed at the same rate and on the same transactions as the Nebraska and applicable local sales tax.
Many affiliated funds raise money for projects that will be owned by a local governmental entity such as a city or public school. Only if the governmental entity orders, is invoiced for and pays for the items purchased, and the affiliated fund then reimburses the governmental entity, will the transaction be free from sales tax. If NCF pays the vendor directly, we will be required to pay sales tax.
Purchases by your affiliated fund for resale will not be subject to sales tax. This would apply, for example, when you hire a caterer to provide the meals for a fundraising dinner for which you charge admission. You will need to contact the NCF accounting department to obtain a resale certificate (Form 13) to provide to the caterer or restaurant.
If you have questions regarding sales tax please call the NCF office at (402) 323-7330 and ask to speak with Les Long or Diane Wilson. The Nebraska Department of Revenue information guide “The Nebraska Taxation of Nonprofit Organizations” also provides information regarding sales tax for charitable organizations such as NCF.
Download the Sales Tax section as a pdf document.
Disbursements are processed weekly and checks are sent each Friday. All properly completed Disbursement Request Forms received by Monday will be processed by Friday of the same week.
Supporting documentation (invoices, paid receipts, etc.) must be included with each completed Disbursement Request Form in order to process payment.
The name of the affiliated fund and account from which payment is to be made should be clearly stated at the top of form in space provided.
Disbursement requests over certain dollar thresholds ($1,500 for community affiliated funds, $5,000 for organizational affiliated funds) require the signatures of two authorized individuals.
An individual may not sign to authorize payment to himself or a related party.
Advance planning is required for disbursements from endowment accounts, as investments may need to be liquidated to provide cash for the disbursements. Please provide us with at least a full month’s notice of the timing and amount of disbursements from endowed accounts so that disbursements are not delayed.
Disbursements are mailed directly from NCF to the payees. An exception will be made for grants that are to be presented at a ceremony, as long as the Disbursement Request Form clearly indicates as such, and the checks are to be mailed to a Fund Advisory Committee member.
In order for NCF to retain its 501(c)(3) status, disbursements (including grants) from its affiliated funds must be made only for charitable purposes. See Grantmaking for Affiliated Funds Frequently-Asked Questions.
Scholarship awards, because they are grants to individuals, are subject to a number of requirements beyond those for other types of disbursements. NCF has established a Policy for Administering Scholarships that is intended to insure that all IRS requirements are met and to provide a consistent process for awarding scholarships. Please see the “Scholarships” section of the website for complete information.
Affiliated funds of the Nebraska Community Foundation (with the exception of certain organizational funds) may not have their own bank or other financial accounts. In order to provide adequate financial controls, have a complete record of transactions for our audit and provide proper donor receipting, the Foundation must receive all contributions and make all disbursements for your affiliated fund.
Affiliated fund financial reports, which include a summary of activity since the last report and an audit trail showing all transactions for the reporting period for your affiliated fund, are sent to the primary contact for your FAC on a quarterly basis. These financial reports show the activity for all accounts within your affiliated fund. The individual receiving the reports is responsible for distributing them to all FAC members and any other individuals involved with your affiliated fund. See the Quarterly Financial Reports reading instructions for more information.
If you have any questions relating to any of these matters, please do not hesitate to contact the NCF Accounting Department.
Late in 2013, following the death of an anonymous donor who had lived in the area for many years, the Byron Community Foundation Fund received an unrestricted gift from the sale of a quarter section of land located in Kansas. This enabled the Fund to begin building its new community center much sooner than anticipated.Read more →