You can hear it in their voices: There's something about providing accounting work for not-for-profit entities that produces a smile of satisfaction. These people like what they're doing for a living."They very much appreciate what you do for them. They're not out just to increase the bottom line of the organization - they're out there to do a service for the community, and they appreciate anything you can do to help them," said Rob Fleming, shareholder director of the Not-for-Profit Services Group at the Bellevue, Wash.-based firm of Clark Nuber.

"There's a feeling of satisfaction," echoed Brian Schebler, director of services/public sector for McGladrey & Pullen. "It gives me a feeling that I'm helping an organization that otherwise might not get the services that they need."

"We can't go out and man the homeless food bank, but we can participate in another way, by providing the services that we provide," said Howard Donkin, a tax partner with Seattle-based Jacobson Jarvis. "It frees up their staff to do what is their mission. We feel like we're participating in their mission indirectly."

There are however, a series of issues relating to nonprofits that must be addressed by the accountants who serve these organizations.

"There is a unique set of accounting rules that apply to the not-for-profit sector," said Fleming. Not only are there specific guidelines for not-for-profits from the Financial Accounting Standards Board, but there are also regulations issued by the federal government's Office of Management and Budget. Furthermore, the American Institute of CPAs issues its own generally accepted accounting principles guide for nonprofit organizations.

In addition, tax specialist Donkin pointed out that not-for-profits are required to file their own type of tax return, the Form 990, which has swelled to encompass many pages of questions about how the organization is structured and how it operates. "It's difficult for a CPA firm that is generalist in nature or provides tax services to individuals to stay familiar with these rules."

Intangible rewards

Accounting firms often face an uphill battle in pricing and selling their services to the not-for-profit sector. Fleming said that his firm members frequently ask him about the fact that their not-for-profit clients don't bring in the same margin of profit as other clients. He's quick to point out that there are other benefits that aren't immediately visible.

"Many nonprofit organizations will allow you to do their services in the non-busy time of the year. Many nonprofits have a June 30 year-end; therefore, you can do work in the summer. It's a way to level out your workload," Fleming explained. "We get our name known to business leaders of the community that are sitting on the boards of nonprofits. And it's a great way to give something back to the community."

Others echoed Fleming's comments.

"It is in the interest of the commercial practice to do not-for-profit work. It gives the firm visibility it would not otherwise have," said Larry Ladd, national director of the higher education practice at Grant Thornton.

An oft-mentioned obstacle in providing accounting services to nonprofit organizations is that the internal accounting functions at these organizations are often not of the quality that accountants expect from their for-profit clients.

"Not-for-profit organizations, at least the smaller ones, typically don't have the resources in many cases to have a full-time accountant on staff, so instead of hiring someone who has the experience and expertise to prepare GAAP-basis financial statements, they often look to the public accounting firm for that assistance," explained McGladrey & Pullen's Schebler.

"The not-for-profits want as much of their funds as possible going to their cause, instead of going to audit and accounting services," said Karla Schlichte, a director at Indianapolis-based Blue & Co. "We try to focus on keeping their cost to a minimum. In addition to providing accounting services, we also try to provide insight as to how to help further their cause."

"The purpose of the not-for-profit is service, some unique mission. It's not to make money," said Ladd. "The people who service not-for-profit organizations share the mission."

Jacobson Jarvis is a firm that works only with not-for-profits, so even at the recruiting level, the firm seeks people who have a desire to be part of the not-for-profit mission. "There are, surprisingly, a lot of people in the workplace that would like to feel like they're part of that mission," said Donkin.

Said Grant Thornton's Ladd, "It is special work. It has a meaning beyond the financial. I chose to work for universities because they do good in the world, and this is what most not-for-profits do. They leave the world a better place than it was before, and that's certainly what drives me."

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