11 AFFILIATED ORGANIZATIONS
Types of Relationships Often Found
The fundraising affiliate of a “parent” organization
The program activity affiliate
Definition of the Reporting Entity
Investments in For-Profit Entities
Financially Interrelated Not-for-Profit Organizations
Recent Guidance on Consolidations and Equity Method Guidance
Transfer of Assets That Are Not Contributions
PERSPECTIVE AND ISSUES
Not-for-profit organizations are often associated with other organizations, either not-for-profit or for-profit. The association may result from many different types of relationships. Issues have arisen recently whereby the debt of a not-for-profit organization was moved to other affiliated organizations to present a picture of better financial health for itself. In applying the accounting principles discussed in this chapter, the reader should be aware that careful attention should be paid to make sure that all requirements for any affiliated organization are met.
In the not-for-profit world, true “ownership” of one entity by another rarely exists (although sometimes a not-for-profit will own an operating business which it either established or had donated to it). Affiliated organizations ...
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