First, the Bad News Recent reductions in the Arizona Corporation Commission’s budget are impacting nonprofit corporations doing business in Arizona in the following ways: Increased Turn-around Time. The turn-around time for filings will likely increase over the next six to twelve months, with regular filings taking as much as 250 days to be processed and expedited [...]
Daily Dose of Nonprofit Law
Monthly Archives: October 2009
Nonprofit Law Jargon Buster – Public Support Test
As discussed in last week’s Nonprofit Law Jargon Buster, there are some organizations that are, by their very nature, considered “public.” These include churches, schools, and hospitals. Other types of charitable organizations must pass one of two mathematical tests calculated on a four year rolling average to qualify is public.
Top 10 Smart Moves Great Nonprofit CEOs Make
Asks Forgiveness, Not Permission. I receive calls from nonprofit CEOs who are struggling with their boards. I am also asked by boards to intervene when there is a an issue with the CEO. What I have learned is that great CEOs do not overly confer with the Board. Instead, great CEOs understand that it is their job to implement the Board’s strategy within the scope of the strategy, policies, and budget the Board has set. Too much “checking-in” can have the unintended consequence of inviting the board to micro-manage. Conversely, scribbling too far outside the lines of the board approved strategy, policies, and budget can get a CEO fired.
Nonprofit Law Jargon Buster: Private Foundation v. Public Charity
// Generally, ever since 1968, Section 501(c)(3) organizations have been divided into two categories for tax purposes: public charities and private foundations. Public Charities.Public charities generally depend on outside funding. Some organizations, including churches, schools, and hospitals, are, by their very nature, considered “publicly supported.” Other organizations must pass one of two mathematical public support [...]
IRS Releases New Video Series to Help Exempt Organizations Understand Redesigned Form 990 Requirements
The Internal Revenue Service has launched a new case study and video series to help exempt organizations and their tax preparers better understand the newly revised Form 990 series which must be filed for the 2008 tax year.
Non-profit vs. Tax-exempt: Nonprofit and Charity Law Jargon Buster
A plain language explanation of the difference between a nonprofit organization and one that is tax-exempt.
Charity Raffles – Tread Carefully
As the recession deepens, we get more and more creative ideas from people wanting to conduct complex raffles. In Arizona, the most popular questions this year involve raffles of real estate. While raffles can be great revenue generators for charitable organizations, many charities do not realize that in most states, including Arizona, raffles are illegal gambling. Cautionary tales abound. Most states have specific exceptions for charitable raffles but require the charity and the raffle to meet specific criteria to qualify.
Top 15 Non-profit Board Governance Mistakes (From a Legal Perspective)
// This list was started as the inaugural post to CharityLawyer Blog. The post struck a nerve, was mentioned by the Chronicle of Philanthropy, the Nonprofit Quarterly, and numerous bloggers and twitter users. San Francisco tax-exempt organizations lawyer and publisher of the Nonprofit Law Blog, Gene Takagi, reviewed the list and added five more governance [...]
Part III: Starting a Nonprofit in Arizona – Applying for Tax-Exempt Status
Forming a nonprofit corporation is not the same as being tax-exempt. To obtain 501(c)(3) status, newly formed entities must apply to the IRS for a formal determination of exemption. Entities seeking 501(c)(3) status apply by filing Form 1023. (Entities seeking exemption under other sections of 501(c) file Form 1024.)
Newly formed organizations applying for exemption face a chicken and egg dilemma. Form 1023 requests considerable detail regarding the charity’s planned programs and activities. The attitude of the IRS is that requiring applicants to articulate detailed plans is a small price to pay for the significant tax benefits associated with 501(c)(3) status.
