Negotiating and Documenting Nonprofit Naming Rights

For an increasing number of nonprofit organizations, the sale of naming rights have become a significant source of funding. The assets that can be named are limited only by a nonprofit’s imagination. Nonprofits commonly sell naming rights to programs, scholarship funds, endowed chairs, sections of a building, an entire facility, and even the name of the entity itself.Continue Reading

Nonprofit Internships - Are the Legal?

Remember that unpaid internship you were so lucky to snag in college? Well, according to both a federal judge in Manhattan and the US Department of Labor (“DOL”) that coffee-delivering-foot-in-the-door opportunity may have violated the Fair Labor Standards Act and entitle you to compensation. But what if you worked for a nonprofit?Continue Reading

Hurry up and Wait – Expediting Applications for Exemption

In general, 1023 exemption applications are processed in the order of receipt by the IRS, and expedited processing is available only if there is a “compelling reason” for it. There are reports that over 80% of requests for expedited processing are denied. If the organization needs its determination letter in a hurry because of circumstances that are within its control, the IRS is not likely to feel that the situation justifies expedited handling.Continue Reading

Annual Report Email Reminders from the Arizona Corporation Commission

Just released this month, the Arizona Corporation Commission now offers annual report email reminders for entities incorporated in Arizona; all you have to do is sign up! All corporations, including nonprofits, incorporated in Arizona must file annual reports with the Arizona Corporation Commission. Due dates are a predictable one year from the date of incorporation; however, with the many thingsContinue Reading

Nonprofit Dissolution: How to do it Right

Nonprofit corporations are often faced with tough decisions about their future. For a variety of reasons, a nonprofit’s board may determine that dissolution is the best answer. Causes range from dwindling resources to a reduction in the need for the nonprofit’s services. Should the Board determine that dissolution is the best option for a nonprofit, there are business and legal steps that must be taken to properly wind down and dissolve the nonprofit. Continue Reading

Senate Finance Committee Report Identifies Issues and Proposes Solutions

On June 13, 2013, the Senate Finance Committee released a cooperative, bipartisan report comprised of suggestions on how (and why) to change government regulations on tax-exempt/nonprofit organizations and on the rules of charitable giving. The Committee’s Report set forth a number of issues that need to be addressed in the nonprofit and charitable giving arena, and offer a number of potential solutions.Continue Reading

Considerations When Conducting Activities in a New State

From time to time we see nonprofit clients adding employees in states in which they haven’t operated before. Often it is just one employee, perhaps a development person working from their home or a shared workspace. Although hiring an employee in another state may not seem like a significant event, many businesses don’t realize that it triggers several compliance obligations.Continue Reading

IRS Audits of Tax-exempt Entities

Although there are many reasons a nonprofit organization may be selected for an audit, several things heighten the chance of being selected. Things like irregularities on Form 990s, failure to file a Form 990, citizen complaints, having a relationship with another taxpayer currently being audited or receiving negative media attention can all increase your chance of being audited beyond the random internal IRS computer process.Continue Reading

Arizona Adopts the Benefit Corporation

Arizona recently passed benefit corporation legislation (SB 1238). Arizona joins fifteen other jurisdictions including California, New York and the District of Columbia that have already passed legislation. While the new law is not effective until December 31, 2014, the Arizona benefit corporation offers social entrepreneurs an important new option to consider when forming a new venture.Continue Reading

Risky Business – Using Unlicensed Images

A simple explanation of copyright law is that if you did not create it, get a license to use it, or purchase it, you are likely in violation of copyright law. Further, copyright infringement is a strict liability offense. If you use someone’s image without a license to use it, you infringe upon their copyright. This is so even if you paid a website designer or other third party and they posted the image without your knowledge.Continue Reading

Arizona Open Meeting Law Basics

We are often asked whether nonprofits must follow Arizona open meeting law (“OML”). Generally, nonprofits are not required to follow open meeting law; however, there are some exceptions – most notably charter schools. Charter schools are treated as public institutions for OML purposes because they are both funded with state tax dollars and are overseen by the state.Continue Reading

IRS Launches Compliance Check of 1300 Self-declared 501(c)(4),(5) and (6) Organizations

As the IRS Exempt Organizations division indicated in its 2013 work plan, it is conducting a compliance check of self-declared tax-exempt organizations. The IRS recently mailed over 1,300 questionnaires to self-declared Section 501(c)(4), 501(c)(5), and 501(c)(6) organizations. The project is part of the IRS’ plan to gather information about self-declared exempt organizations, determine whether self-declared exempt organizations are complying with applicable tax-exempt law, and increase voluntary compliance.Continue Reading