By Caroline Paulus, CPA, Audit Manager at Blue & Co.
At the 2025 AICPA Not-for-Profit Industry Conference, not-for-profit finance professionals, auditors, and thought leaders came together for three days of rich insights, technical updates, and forward-looking strategies. The event opened with a powerful keynote from Sam Goodwin, a former hostage in Syria, whose story of resilience, adaptability, and leadership under pressure set a compelling tone. His message resonated deeply, framing a conference centered on navigating complexity with clarity and purpose.
Our Blue & Co. Not-for-Profit Services team walked away with key takeaways that are already shaping how we deepen our expertise and better serve the evolving needs of the not-for-profit sector.
Day 1: Resilience, Transparency, and the Future of Financial Reporting
FASB Updates: Crypto, Environmental Credits, and Software Costs
The Financial Accounting Standards Board (FASB) shared updates on:
- Accounting for crypto assets
- Environmental credit programs
- Simplifying software cost capitalization
Financial Reporting: Telling a Clearer Story
Sessions emphasized using financial statements as a storytelling tool. Key themes included:
- Flexibility in presenting operating measures
- Enhancing functional expense reporting
- Improving liquidity disclosures
Day 2: Navigating Form 990 and Contribution Accounting
Form 990: A Dual-Lens Approach
Key takeaways included:
- Form 990 is more than a tax return—it’s a public-facing document that shapes donor trust and regulatory perception.
- Collaboration between accountants and attorneys is essential to ensure accuracy, compliance, and narrative alignment.
- Common pitfalls include vague disclosures, inconsistent reporting, and misaligned governance practices.
- Understanding the basis of exemption
- Avoiding language that implies private benefit or commerciality
- Ensuring governance practices match what’s reported
Day 3: Functional Expenses, Private Foundations, and Internal Controls
Avoiding Dysfunctional Expenses
Presenters delivered a practical session on functional expense allocation. Highlights included:
- Clear definitions of program, management & general (MG&A), fundraising, and membership development expenses
- Common allocation methods: FTE, square footage, pounds of food distributed (for food banks)
- Joint costs: When fundraising overlaps with programmatic messaging, allocation must meet purpose, audience, and content criteria
Private Foundations: Hot Button Issues
Presenters tackled complex issues facing private foundations:
- Self-dealing: Even well-intentioned transactions (e.g., discounted rent) can trigger excise taxes
- Minimum distribution requirements: Bequests and valuation errors can create unexpected shortfalls
- Taxable expenditures: Grants to individuals or foreign organizations require careful documentation and, in some cases, IRS pre-approval
- Legislative watch: Proposed changes to excise taxes and DAF regulations remain in flux
Strengthening Internal Controls
Presenters closed the conference with a robust session on internal controls:
- COSO framework: Control environment, risk assessment, control activities, information & communication, and monitoring
- Best practices: Segregation of duties, automated workflows, exception reporting, and board engagement
- IT controls: Secure access, disaster recovery, and SOC report reviews are essential in today’s digital environment
- Resilience: Strong controls enable not-for-profits to adapt quickly to change and maintain mission continuity
Final Thoughts
The 2025 AICPA NFP Industry Conference reinforced the importance of transparency, collaboration, and adaptability in nonprofit finance. Whether navigating complex tax rules, refining expense allocations, or strengthening internal controls, the message was clear: not-for-profits must be both mission-driven and compliance-savvy.
Your Blue & Co. team is here to assist you as you navigate the ever-changing landscape. Reach out to your local Blue & Co. advisor today!
