A foundation is an organization created especially for the purpose of supporting one or more other organizations or causes.  There are public foundations and private foundations.  Many foundations are affiliated with operating organizations that they support (e.g., college and university foundations, hospital foundations, church or denominational foundations, etc.).  Private foundations are often formed by an individual, a family, or a business for the purpose of making grants to operating charities, churches, and other publicly-supported 501(c)(3) organizations. Private foundations are subject to an array of tax laws that apply uniquely to them, and that are very different from the laws that apply to public foundations or public charities. Our team at BMWL has extensive experience serving foundations – both public and private.  Many foundation leaders have come to BMWL for services because of our strong reputation for helping them make sure the financial bases are covered.  They often come to us after working with another accounting firm, and they share with us that they were concerned that their previous firm was not bringing matters to their attention that needed to be addressed.  After asking around among leaders in the nonprofit community, they learned that BMWL is well known for just that – taking a comprehensive and highly professional approach to providing services that include communicating important matters to our clients on a proactive and consistent basis.

Specific Examples of How We Have Served Foundations

A large private foundation sought our assistance in providing independent auditing services.  The foundation had previously been served by a “Big Four” accounting firm.  In addition to serving as the foundation’s independent audit firm, we have assisted the foundation in addressing accounting matters related to investing in “alternative investments” such as hedge funds, limited partnership interests, and other similar assets.  Our firm also advises the foundation with respect to key tax compliance matters.

A large financial institution served as trustee of a sizable private foundation.  The financial institution was concerned that there were compliance issues that were not being adequately addressed.  The foundation engaged BMWL to assist in identifying and addressing the issues and to audit the financial statements.  One of the “Big Four” international accounting firms had previously provided services for the foundation.  Our team identified significant compliance issues requiring attention and proactively assisted the foundation in addressing those issues. As a result of our efforts, the foundation received large refunds from the Internal Revenue Service for taxes that had been overpaid in prior years.

Another key area in which we assist our foundation clients is addressing their practices for establishing and documenting executive compensation and addressing the issue of related party transactions.  It is critically important for foundations to handle executive compensation properly.  Additionally, the tax laws for private foundations prohibit many types of related party transactions.  Improper handling of these important matters can result in negative publicity as well as possible (very significant) penalties for both the foundation and the individuals involved.  Our BMWL professionals can help your foundation successfully navigate the rules related to executive compensation and related party transactions – and reduce the risk to your foundation and its leaders.

We assist numerous foundations in areas such as internal controls; board governance matters; risk management; foreign grant-making and direct foreign activities; expenditure responsibility documentation; corporate structure analysis; federal, state, and local tax compliance; representation before tax authorities; and much more.

Services for Foundations

Foundations exist to support other organizations or people with specific needs.  Our BMWL team has extensive experience serving foundations of all types, including both private and public foundations.  BMWL serves as the accounting firm for numerous excellent foundations of all sizes, including small foundations and others with asset bases of several hundred million dollars.  The fact that all of our clients have as their mission improving the lives of others in some way is a powerful inspirational force for our entire team! Our highly-motivated team has extensive experience serving foundations in a variety of ways.

      Audit & Assurance Services

The BMWL Difference

Not all audits or auditors are equal.  There are big differences.

When selecting an audit firm, it can be difficult to discern the differences among firms.  After all, every firm says they are great at what they do, and they promise to provide excellent service.  BMWL’s overall approach to serving your foundation is very different from that of other firms and involves a unique and exclusive combination of elements:

  • A dedicated team with extensive experience providing audit and assurance services for foundations.
  • A team of tax professionals dedicated uniquely and specifically to serving nonprofit organizations in matters of federal, state, and local taxes of all types.
  • Nationally-known expertise and leadership in accounting and tax matters related to nonprofit organizations, including direct involvement in national policy and leadership roles seeking to reduce the risk of inappropriate government intervention in the religious and nonprofit sector…expertise that we bring to you.  (For an example of our national leadership in these areas, see
  • Services that include obtaining an understanding of your key internal controls over cash transactions and accounting activities sufficient to permit us to assess the risk of material misstatement in your financial statements and otherwise perform the audit engagement.
  • Use of computer-aided data extraction analysis to aid in potentially identifying fraud or other audit issues that require attention.
  • An understanding of key elements of the Fund’s federal tax compliance, obtained to help you identify and  take better advantage of exemptions as well as reduce the Fund’s compliance risk
  • Proactive, clear, and highly professional communication and reporting of audit observations and practical recommendations to your leadership team and governing body.
  • An array of helpful resources and education to help your leadership team stay current with respect to financial, tax, and regulatory developments affecting your foundation.

We do much more than respond to your questions about issues on your radar screen.  We come alongside your team to help you identify important issues that are not on your radar screen.  And, we provide clear recommendations for practical solutions to address the issues.


An audit is the highest level of assurance BMWL can provide with respect to an organization’s financial statements.  Audited financial statements provide the organization’s governing body with the auditor’s opinion that the financial statements are presented fairly, in all material respects, in conformity with the method of accounting utilized.  The opinion offers reasonable but not absolute assurance with respect to the financial statements to which it applies.

In an audit, BMWL obtains an understanding of the organization’s internal control and assesses fraud risk as it relates to the financial statements.  We also corroborate the amounts and disclosures included in the financial statements by obtaining audit evidence through inquiry, physical inspection, observation, third-party confirmations, examination, analytical procedures and other procedures. An audit engagement performed by BMWL also includes an assessment of certain aspects of tax compliance by the organization.

In obtaining an understanding of internal control, BMWL typically focuses significantly on the cash processing activities of an organization, including the processes for receiving cash (whether in currency, check, or electronic form), the processes for accounting for cash, and the processes for disbursing cash either to suppliers or employees.

An audit performed by BMWL typically results in the following reports:

BMWL’s Report of Independent Auditors

Financial statements and related disclosures

BMWL’s Report on Internal Control

BMWL’s Report on the Audit Process


Reviewed financial statements provide the organization’s governing body with comfort that, based on BMWL’s review, we are not aware of any material modifications that should be made to the financial statements for the statements to be in conformity with the method of accounting utilized.  A review is substantially less in scope than an audit, and does not require obtaining an understanding of internal control, assessing the risk of fraud, or testing the organization’s records.

In a review engagement, BMWL performs procedures (primarily analytical procedures and inquiries) that will provide a reasonable basis for obtaining limited assurance that there are no material modifications that should be made to the financial statements.

A review performed by BMWL typically results in the following reports:

BMWL’s review report expressing limited assurance on the financial statements

Financial statements and related disclosures


A compilation represents the most basic level of service BMWL provides with respect to an organization’s financial statements.  In a compilation engagement, we assist management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance with respect to the financial statements.  In a compilation, BMWL complies with applicable regulatory standards, which require us to have an understanding of the industry in which the client operates, obtain knowledge about the client, read the financial statements, and consider whether the financial statements appear appropriate in form and free from obvious material errors.

A compilation does not contemplate performing inquiry, analytical procedures, or other procedures ordinarily performed in a review; or obtaining an understanding of the organization’s internal control; assessing fraud risk; or testing of accounting records.  Compiled financial statements may be prepared without disclosures (notes to the financial statements).  The compilation report provides no assurance with respect to the financial statements.

A compilation performed by BMWL typically results in the following reports:

BMWL’s compilation report expressing no assurance on the financial statements

Financial statements and (if applicable) related disclosures

Financial Foundations Engagements

The Financial Foundations EngagementTM offered by Batts Morrison Wales & Lee is particularly suited for organizations that want to address the foundational elements of financial management and oversight but are not ready to have a full audit of their financial statements. The Financial Foundations EngagementTM is designed for affordability – with fees payable over an easy-to-manage five-month period. Highly-experienced and well-trained members of our team will provide the specific services described below.

Effective Financial Oversight Training
We will lead a live, remote, two-hour training session for those members of the organization’s leadership who are charged with financial oversight, including board members, finance committee members (or their equivalent), and staff leaders. Geared for non-accountants, this session focuses on the essentials of financial oversight, and addresses topics that include:

  • The role of financial administration
  • What do we need to be monitoring?
  • Compliance with laws and governing documents
  • Budgeting
  • Managing liquidity, cash flow, and financial position
  • Internal control
  • Tax compliance
  • Risk management
  • Insurance coverages
  • Effective financial reporting
  • And more


Internal Control Assessment

Our team will work to understand and document your organization’s internal control processes for handling cash receipts and disbursements, including payroll. We will address your procedures for handling and processing cash receipts from the point of collection through bank deposit to recording in the accounting records; procedures related to cash disbursements from the point of initiation to authorization for payment to disbursement and recording in the accounting records; and certain aspects of control procedures related to payroll, general ledger maintenance, and other financial activities of the organization. Our team will discuss with you and issue a report describing our observations and recommendations.

BMWL Tax Shield Compliance AssessmentTM

The BMWL Tax Shield Compliance AssessmentTM includes inquiries by our team related to federal tax compliance risks and opportunities. We will report to you matters that we identify which we believe warrant your attention in the following areas:

  • Protecting exempt status
  • Unrelated business income
  • Executive compensation‐setting practices
  • Properly handling conflicts of interest
  • Safely engaging in transactions with related parties
  • Accountable plan expense documentation requirements
  • Compliance with political activity restrictions
  • Proper worker classification (employee v. contractor)
  • Proper acknowledgment and receipting of charitable contributions
  • Quid pro quo contributions (banquets, golf tournaments, auctions, etc.)
  • Benevolence activities
  • And more

Internal control and tax compliance advisory services

BMWL offers advisory services to assist an organization’s management in identifying internal control vulnerabilities as well as tax compliance risks and opportunities.  Each such engagement is tailored specifically to the needs of the organization we are serving, and is designed to offer practical and helpful recommendations for reducing risk or for taking advantage of untapped opportunities.

In performing an internal control and tax compliance advisory services engagement, BMWL’s team makes inquiries of appropriate members of an organization’s management and staff and inspects documents and records as deemed appropriate for the specific engagement.  Internal control and tax compliance advisory engagements address many of the types of internal control and tax compliance matters that BMWL would typically address in an audit engagement.  The report issued in connection with an advisory services engagement is not an opinion – rather it is a summary of observations and practical recommendations.

Tax Services

The unique array of tax services we offer to foundations is among the most extensive available in the United States.  Our highly-experienced team of leaders with nationally-known expertise will professionally and efficiently help you with such matters as:

  • Protecting your exempt status
  • Professional representation before the IRS and other tax authorities
  • Compliance with political activity restrictions
  • Unrelated business income issues
  • Use of subsidiaries and limited liability companies (LLCs)
  • Executive compensation-setting practices
  • Properly handling conflicts-of-interest
  • Safely engaging in transactions with related parties
  • Tax implications associated with intellectual property matters
  • Proper acknowledgment and receipting of charitable contributions
  • Quid pro quo contributions (banquets, golf tournaments, auctions, etc.)
  • Charitable gift annuities
  • Charitable remainder and lead trusts
  • Donor-advised funds
  • Qualified tuition reduction benefit programs
  • Proper worker classification (employee v. contractor)
  • Accountable plan expense documentation requirements
  • Payroll tax compliance and reporting
  • Preparation of required tax forms and returns
  • State and local tax matters
  • And much, much more!

Strategic Advisory Services

The BMWL team offers you an abundance of expertise to help you address important management and financial operations.  Our professional team can advise you in key aspects of your administration, including:

  • Comprehensive risk management strategies
  • Strategic budgeting for improved financial position
  • Board member education and orientation
  • Board governance and operations
  • Policies and procedures
  • Executive compensation
  • Corporate structure and related risk analysis
  • Financial staffing guidelines
  • Improved efficiencies in financial operations
  • CFO consulting services
  • And much more!


Resources and Education

In addition to the extensive professional services available to you, as a client of BMWL, you will have access to our exclusive and proprietary array of educational opportunities and resources created just for nonprofit organizations like yours.  The BMWL team is constantly on watch for new developments and information that could be important to our clients.  When new developments and information arise, we share the relevant aspects with you in our unique style – emphasizing concise, complete, practical, and plain-language explanations.  Each of the resources we make available to you are truly one-of-a-kind, created by our dedicated team with the sole purpose of helping you.  They include:

  • Nonprofit OnPointTM – our feature articles that provide perspective on issues impacting nonprofits and their leaders.
  • The BMWL Annual National Nonprofit Conference – For more than 20 years, our team has conducted a top-drawer national nonprofit conference attended by hundreds of nonprofit leaders from across the United States. Leading a nonprofit organization isn’t easy. Laws change. Regulations evolve. What worked yesterday might not work today. And what works perfectly today might not serve your organization very well tomorrow. With so much in flux, it can be difficult to keep up. At the BMWL National Nonprofit Conference, you have the opportunity to catch up on legal, tax, financial, and accounting issues that affect your organization. Through one full day of focused learning led by industry leaders, you will walk away with the ability to lead your organization more effectively and in compliance with laws and regulations. For more information about the BMWL National Nonprofit Conference, click here.
  • BMWL Special Alerts! – timely email alerts that convey important time-sensitive developments affecting nonprofit organizations
  • BMWL Web Briefings – web-based executive briefings covering topics that are important to nonprofit leaders.  For example, our Web Briefing Series on the theme of Risk Management has helped hundreds of nonprofit leaders reduce risk in their organizations.
  • Published Books – we offer at no charge to our clients published books covering key topics affecting nonprofit organizations.  These practical, easy-to-read books have been used by hundreds of nonprofit leaders to improve their organizations.  They are available for purchase by non-clients on  The books currently include:

– Board Member Orientation – The Concise and Complete Guide to Nonprofit Board Service™

– Unrelated Business Income and the Church – The Concise and Complete Guide™

– Unrelated Business Income and the 501(c)(3) Public Charity – The Concise and Complete Guide™

  • BMWL Sample Policies, Whitepapers, and Other Resources – We offer a growing assortment of sample policies, whitepapers, and other resources to help you more effectively administer your organization.

To learn more about our various resources, please visit News & Resources.