Nonprofits organizations have the potential to both generate and claim certain tracts of property. With unclaimed property, a business has failed to satisfy a business contract and the result is an unclaimed financial item that one business owes to another. According to the professionals at VIS, some of the most common areas of unclaimed property include:
- Inactive savings accounts
- Uncashed checks
- Uncashed payroll checks
- Proceeds from life insurance payouts
- Unused gift cards or gift certificates
- Overpayments on customer accounts
A nonprofit must follow regulations when dealing with unclaimed property, and it is important for a company to how the property can be qualified as unclaimed.
What Causes an Unclaimed Status?
In the situation of nonprofit unclaimed property, the owner may have passed away, left it behind during a relocation, or forgot about the property. The property could also arise from circumstances concerning an employee’s termination, a lack of change of address being filed by the property’s owners, an owner moving away from the original location of the deposit requirements. Many businesses will put off dealing with small amounts of the property when first discovered, but failing to do so can cause problems and greater expense in the long run.
How to Reconcile the Property
Businesses holding these type items may know they exist, but think the item is too small for them to take the time to deal with it. This may seem like a small oversight, but it could prove to be very expensive in the long run. Protect your nonprofit by taking the time to identify an unclaimed property, attempt to return the property, or remit it to the state if contact with owner cannot be made.