Non-Profit Valuation Services

Not-for-profit organizations, sometimes called non-profits, operate in a unique regulatory environment and have different goals and stakeholders than for-profit entities. However, not-for-profit entities demand the same high quality level of services from third parties that for-profit entities require. Appraisal Economics has the resources to provide valuation and economic consulting services to the not-for-profit community. We serve clients in the following areas:

Charities
Colleges and Universities
Foundations
Hospitals
Religious Organizations
Trusts

A few of the areas where we help our clients include:

Contributions of privately-held securities and other assets for IRS reporting
Conversions from for-profit to not-for-profit status, and vice versa
Sales of assets, donated and internally generated, to raise funds
Valuations of tangible and intangible assets related to IRS Form 990 requirements

For tax purposes, deductions for charitable contributions to organizations are generally permitted under Internal Revenue Code § 170(a) subject to certain limitations. In particular, under § 170(f)(11)(C), taxpayers are required to obtain a qualified appraisal for donated assets for which a deduction of more than $5,000 is claimed. ¹Appraisal Economics has experience providing qualified appraisals on behalf of donors to be submitted in conjunction with IRS Form 8283. In the opposite scenario, when a not-for-profit entity converts to for-profit status, the transfer of assets may be subject to taxation, and the value of the not-for-profit must be determined. IRS regulations require foundations with favorable tax exemptions to distribute a portion of the fair market value of their assets annually. An appraisal will determine the fair market value of the foundation’s assets, which, subject to adjustments for certain distributions, dispositions, and amounts set aside, allows the foundation to comply with distribution requirements. An appraisal of the assets in a trust is similarly essential, especially for private company stocks and other assets that may change materially in value from one period to the next. Certain not-for-profit organizations may be required to report the value of their assets annually on IRS Form 990. Ultimately, whenever assets are transferred into or out of a not-for-profit entity, an appraisal may be required for reporting purposes, or the transfer may impact the tax position of one or more parties. Appraisal Economics has over twenty years of worldwide experience valuing tangible and intangible assets for a variety of accounting and tax-related purposes.

¹http://www.irs.gov/irb/2006-46_IRB/ar13.html