Last Tuesday, a federal judge in Texas issued a nationwide injunction against a new regulation expanding the number of workers who would be eligible for time-and-a-half overtime pay. Continue Reading
Tax Exempts and Washington’s Business and Occupation Tax
Many tax-exempt organizations in Washington are still subject to business and occupation tax at both the state and local level. For B&O tax purposes, nonprofit organizations are generally presumed taxable in the same manner as for profit organizations. Continue Reading
Top State Charitable Solicitation Registration Myths
Forty-five states and the District of Columbia regulate charitable solicitation. Charitable organizations are required to register and submit annual report/registration in forty-two (including DC) of those jurisdictions. Continue Reading
How to Survive a Micro-Managing Board
The micro-managing board members show up to their first board meeting and before they have done anything of substance for the organization, they want to revamp the reports, review the nonprofit’s journal entries, question every expense, and critique the Chief Executive’s management style. One might rightly ask whether these activities are adding value. I would argue that nine times out of ten they are not. Continue Reading
Starting a Nonprofit in Washington State
Once a potential founder has read our post on Nonprofit Business Planning – Steal All the Underpants, and has determined that a new nonprofit organization would serve a legitimate need in the community and can be supported without stealing any underpants, she must then consider the steps necessary to form the nonprofit corporation in Washington State and obtain tax-exemption from the IRS. Continue Reading
Cause Related Marketing and Commercial Co-Venture Best Practices
Often companies are blissfully unaware that their charitable sales promotion is a regulated activity and are surprised to learn that there are regulations they must comply with. However, states have an interest in protecting consumers from false and misleading advertising. They also have an interest in protecting charities from being exploited. Accordingly, at least 20 states regulate such cause marketing offers which are referred to interchangeably as “commercial co-ventures” or “charitable sales promotions.”
Continue Reading
Accepting Donations Prior to Exemption
Newly formed charities often encounter a chicken and egg problem. They wish to begin their operations before they receive formal approval of their tax-exempt status but they can’t attract funding until they receive their federal 501(c)(3) determination. Continue Reading
Arizona Update – Electronic Ballots Legal at Last
HB 2592, which becomes effective on August 6, 2016 (“Effective Date”), amends A.R.S. §10-3708 to allow the delivery of member ballots through an electronic voting system. It is important to understand this change does not apply to director votes which do not have a written ballot option.
Continue Reading
When is a Contribution Not a Contribution? By Billy Minch, CPA
For those of us who spend our lives working in, with, or around nonprofit organizations, this is generally thought of as a pretty easily answered question… but is it really? Recently, several of the clients we serve have received contributions from vendors and service providers that may challenge, or at least stretch, the definition of what gets recorded as a contribution. Continue Reading
New requirement for Section 501(c)(4) organizations – Form 8976
Code Section 506 aims to remedy this problem by requiring organizations to notify the IRS of their intent to operate as a Section 501(c)(4) organization. The IRS has developed a new form for this purpose – Form 8976 – that organizations should use to provide this notification. Continue Reading
Buyer Beware – Nonprofits and Management Contracts
If I could point to the one decision my clients almost always end up regretting, it’s the decision to enter into a comprehensive management contract. Some management companies prey on nonprofits, taking control over the nonprofit’s operations and charging unreasonable fees for services of questionable value. Continue Reading
Big Changes in Arizona’s Charitable Tax Credits by Alisa Chatinsky
The State Legislature recently passed increases to the Arizona Tax Credits. For nonprofits, this means that in order to increase contributions to your organization, your tax credit marketing needs to be reevaluated and addressed now. Continue Reading
Multistate Fundraising Registration and Filing Portal
Recognizing the complicated labyrinth that is the multi-state charitable solicitation registration process, a new organization called the Multistate Registration and Filing Portal, Inc. has been formed as a Delaware nonprofit corporation (“MRFP”). The MRFP is working with the National Association of States Charities Officials and the National Association of Attorneys General to develop an online system that will permit nonprofits and professional fundraisers to comply with all states’ registration and annual filing requirements through a single portal. Continue Reading
Nonprofit Jargon Buster – Directors vs. Trustees
The group of individuals charged with the governance of nonprofits are often referred to interchangeably as “directors” or “trustees.” These terms are similar in that they both refer to the group of individuals who have a fiduciary duty to oversee the nonprofit organization. However, from a legal perspective, there are important distinctions. Continue Reading
Nonprofit Law Jargon Buster – What is an NGO?
In practice, a NGO is an organization that is neither a part of a government nor a conventional for-profit business. Therefore, NGO is a broad term that encompasses traditional private nonprofits as well as many other forms of mission-based organizations. Continue Reading
Big Changes for Social Welfare Organizations
The recently enacted Protecting Americans from Tax Hikes Act (“PATH Act”) imposes a new requirement for Code Section 501(c)(4) social welfare organizations to notify the IRS of their existence within sixty (60) days of their incorporation. Continue Reading
LLCs as Philanthropic Vehicles
The groundbreaking Facebook founder has once again broken with tradition and formed his philanthropy as an LLC. Clients have questioned the benefits of choosing to forgoe the traditional private foundation in favor of an LLC. We are here to break it down. Continue Reading
Name Changes – How to Do it Right
Exempt organizations that wish to change their name often secure a trade name or “do business” under a fictitious name. Presumably they opt to use a fictitious name rather than formally change their name because they believe a legal name change is too much trouble or they don’t know how to accomplish it. . . . A better approach is to change the organization’s legal name with both state and federal authorities to present a unified and cohesive brand to donors and supporters. Continue Reading
IRS Guidance Breathes New Life Into Mission-Related Investing
Foundations are required to expend approximately 5% of their assets for charitable purposes each year. The other 95% is invested to generate distributable income for future years. Historically, foundations have struggled with the idea of making riskier investments that further their charitable purposes, but do not qualify as a PRI because a significant purpose of the investment is the production of income or the appreciation of property. Continue Reading
Board Member vs. Executive Director Roles
One of the fastest ways to destroy a nonprofit is for board members and staff members to start confusing their roles and stepping on one another’s toes. Continue Reading