Scaling up accounting in the face of exponential growth
We can talk about our accounting and controllership services… or you can read about the results. See what we did for an area nonprofit!
Challenge
A longstanding nonprofit client of James Moore had been leasing their facility. We suggested they negotiate with their landlord to buy the property, enabling them to allocate grant money towards depreciation expenses. However, most financial institutions offer loans with terms ranging from 20 to 25 years — and the cost of the loan exceeded the amount the nonprofit could offset through their grant's depreciation allowance.
Solutions
James Moore served as a liaison between the nonprofit, financial institutions and engineering experts. We educated lenders about the grant process specific to nonprofits and persuaded them to offer loan durations of 25-30 years. This extended timeframe enabled our client to align its loan cash flow with depreciation.
We also connected the nonprofit with an engineer skilled in conducting cost segregation studies. Typically, a building is depreciated over a span of 39 years. However, a cost segregation study allows for accelerated depreciation schedules, such as five, seven or 15 years. This allowed the nonprofit to allocate higher depreciation costs to their grants, aligning with the cash flow requirements set by the lender.
Results
By purchasing the building, the nonprofit utilized grant money to offset depreciation expenses. Had they remained tenants, they would still be incurring rental costs today — likely at a rate higher than their initial payments. Having successfully paid off the loan and gained ownership of the building, they can now redirect those funds to expand services and initiate new community programs.
Be the First to Hear.
Sign up for our newsletter and have it delivered to your inbox, so you don’t miss a thing.
Mark Payne, CPA
Partner
A certified public accountant in the states of Florida and Georgia, Mark Payne has nearly 30 years of experience in the accounting industry and takes great pride in providing clients with personalized, always-available service. As the Partner-In-Charge of James Moore’s Tallahassee office, Mark is responsible for the management of accounting, auditing and business consulting services to a variety of clients, including nonprofit organizations, real estate and construction businesses, professional associations, and governmental agencies.
Mark leads the firm’s Nonprofit Services Team and has extensive knowledge of federal and state tax compliance and the new Super Circular. As a result of this expertise, he is intricately involved with audits of nonprofit organizations and government entities that receive state and federal financial assistance subject to Government Auditing Standards. Mark also has extensive experience providing accounting, auditing and consulting services to Federally Qualified Health Centers and has an in-depth knowledge of the 340b drug pricing program and reporting requirements. He also works with real estate and construction companies and serves as an integral member of the firm’s Construction Services Team and Real Estate Services Team.
As a regular speaker for nonprofit organizations throughout the southeast, Mark covers topics directly associated with financial management, reviewing financial statements, and board development. He is also a member of several professional associations and serves on the boards for the United Partners for Human Services, Inc. (UPHS) and the Institute for Nonprofit Innovation and Excellence (INIE). He also helped create and currently oversees the Strategic Nonprofit Alliance Partnership (SNAP) training for the Tallahassee office. SNAP was created by the firm with the goal of offering free training to address the challenges and issues that nonprofit organizations face every day, such as fundraising, board development and fiscal management.
