1) Accounting for Nonprofit Organizations

 

Nonprofits are required to maintain accounting records, the scope and nature of which will depend on the organization’s size, its source of funding (grants, bank loans, donations, etc.), and its activities.

 

A Brief Look at Recent History!

 

A new chart of accounts, No. 2018-06, dated December 5, 2018, concerning the annual financial statements of private-law nonprofit legal entities, has been applicable to the associations in question since January 1, 2020.

 

The Accounting Standards Authority (ANC) has therefore adopted new accounting regulations applicable, effective January 1, 2020, to the annual financial statements of private-law nonprofit legal entities. Very simple.

 

In reality: unless you have a volunteer accountant (who is dedicated, competent, reliable, etc.) to handle the bookkeeping—and possibly a certified public accountant to audit the books—it’s enough to make you pull your hair out.

 

Indeed, ANC Regulation No. 2018-06 of December 5, 2018, concerning the annual financial statements of private-law nonprofit legal entities, approved by decree of December 26, 2018, published in the Official Journal on December 30, 2018, runs to 41 pages—and requires two tubes of Doliprane (while supplies last) for the uninitiated.

 

To find it, follow this link:  https://www.associations.gouv.fr/IMG/pdf/reglt_2018-06_association.pdf

 

 

2) Subsidies!

“The Republican Engagement Contract (CER), governed by Articles 10-1 and 25-1 of Law No. 2000-321 of April 12, 2000, and its implementing decree No. 2021-1947 of December 31, 2021, must be signed by the association or foundation in support of any grant application submitted to an administrative authority or an entity responsible for managing an industrial and commercial public service, or for any application for accreditation submitted to the State or one of its public institutions that falls within the scope of the core accreditation framework.”

 

A grant is a form of financial assistance, but not all forms of financial assistance are grants.

 

A grant meets the legal definition of an “optional contribution of any kind justified by the public interest and intended to carry out an initiative or an investment project, to contribute to the development of activities, or to provide overall funding for the association’s or foundation’s activities.”

The term “optional” means that the grant is awarded on a discretionary basis. It is not an automatic, predetermined form of assistance that can be obtained by meeting legal or regulatory requirements, such as employment assistance programs. Similarly, mandatory contributions, such as daily rates, are not considered grants.

 

Who awards a grant?

 

Grants must be awarded by an administrative authority to private-law organizations that are spearheading an initiative they have previously defined and intend to implement.

 

This includes: the State, local governments, and public administrative institutions. Under the law, this also includes social security agencies, the CNAF, and entities responsible for managing an industrial and commercial public service (SPIC) in connection with their public service activities. These entities responsible for an SPIC may be private or public companies or organizations.

 

The following are therefore excluded: subsidies granted by public authorities to individuals or between public entities, as well as aid paid pursuant to a public support policy (e.g., aid paid by Pôle Emploi to companies under employment support contracts, etc.).

 

To navigate the maze of methodology applicable to associations—in 32 pages—follow the link:  https://www.associations.gouv.fr/IMG/pdf/guide_subventions2023_2024_.pdf

 

 

3) The CER

 

You may have noticed that we often—and necessarily—refer to the CER, or Republican Commitment Contract.

 

The Republican Commitment Contract (CER), governed by Articles 10-1 and 25-1 of Law No. 2000-321 of April 12, 2000, and its implementing decree No. 2021-1947 of December 31, 2021, must be signed by an association or foundation in support of any grant application submitted to an administrative authority or an entity responsible for managing an industrial and commercial public service, or for any application for accreditation submitted to the State or one of its public institutions that falls within the scope of the common core accreditation requirements.

 

Thankfully, there is a 24-page practical guide available for this purpose; you can access it by clicking this link: https://www.associations.gouv.fr/IMG/pdf/faq_cer_fevrier_2023_vf.pdf

 

 

4) Law 2024-344

 

To simplify matters a bit, a law aimed at supporting volunteer work and streamlining community life was enacted on April 15, 2024 (Law 2024-344).

 

In essence: The law, adopted unanimously by the National Assembly on April 8, 2024, aims, on the one hand, to   encourage and recognize community involvement.

 

The legislation thus provides for:

• to make training credits held in the Personal Training Account (CPF) available— —through the Civic Engagement Account (CEC) to volunteers working for associations that have been registered for at least one year, down from the current requirement of three years;
• to allow associations eligible for the CEC to contribute to their volunteers’ CPF accounts through   their CEC;
• to relax the conditions for taking “volunteer leave” for employees and “civic leave” for public servants to include volunteers working with registered associations that have been in existence for at least one year, rather than the current three years;
• to extend “volunteer engagement leave” to volunteer representatives of the Defender of   Rights;
• to facilitate the involvement of private-sector employees by making the “ ” skills-based volunteer program available to companies with fewer than 5,000 employees and by extending its maximum duration from two to three years;
• to facilitate the involvement of public-sector employees by extending the pilot program for the “ ” pro bono skills program for state and local government employees to the public hospital system;
• to allow employees to donate their unused days of rest from “ ” in monetary form to a nonprofit organization, with their employer’s consent. An implementing decree is required for its implementation.

 

The law also aims to simplify the operations of nonprofit organizations. It addresses several areas related to resources affecting local nonprofit organizations, whether federated or not, by:

• simplifying the conditions for loans between organizations;
• allowing cash management agreements between member organizations of the same associati  group;
• harmonizing and expanding the grounds for holding raffles, lotteries, and bingo games;
• authorizing municipalities to grant associations permission to temporarily occupy public   space free of charge.

 

Finally, the law formally establishes the Guid’Asso network of support services for associations.

 

 

For more information:

https://youtu.be/QuUW03jHFUY   and   https://www.associations.gouv.fr/rejoindre-guid-asso-les-demarches.html

 

Courage and  —rely on the support of association managers who have been through this before. Don’t go it alone on this path fraught with pitfalls. This is the price you’ll pay to gain access to numerous forms of assistance and grants!