When Board members gather, what are ostensibly shared interests and goals may in fact consist of different or divergent underlying priorities making it difficult to reach consensus. Here is a short list of proven tools to overcome differences and successfully accomplish the goals that will further the interests of your Board The Board Chair Should… Continue Reading
Clarity at Last! Contributions to Charities’ Single Member LLCs are Deductible
The IRS has issued Notice 2012-52 advising taxpayers that if all other requirements for deductibility are met, contributions to domestic single-member limited liability companies that are wholly owned and controlled by a U.S. charity will be treated as a charitable contribution to a branch or division of that charity. Background. Charities frequently create single member… Continue Reading
Top 10 Tips To Avoiding Bedlam In The Boardroom
In the nonprofit realm, when conflict erupts it is usually in the form of disagreement with external stakeholders such as beneficiaries, funders, media and/or regulatory agencies. … Continue Reading
MOUs versus Contracts
Nonprofits tend to view MOUs as a kinder gentler way to document their intentions. However, a contract is, at its core, an offer by one party to do something, an acceptance by the other party, and the promise to exchange something of value to seal the deal. Under this definition, the MOUs we see nonprofits create are almost always bare bones legal contracts.
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What to Look for in a Directors and Officers’ Insurance Policy
Choosing the right carrier and policy may not be as straightforward as it seems. Unlike general liability insurance where there is standard policy language, each insurance company writes its own specialized D&O Insurance policy.… Continue Reading
Arizona’sTransaction Privilege Tax – How it Applies to Nonprofits
Non-profit organizations that are tax-exempt from federal and state income tax are not necessarily exempt from state and local taxes. In lieu of a sales tax, Arizona imposes a Transaction Privilege Tax (“TPT”) on seventeen separate business classifications. Certain tangible personal property and retail sales transactions are exempt from Arizona’s TPT.
The general rule is that sales made to churches, schools, and other non-profit organizations are taxed. However, under the Arizona Revised Statutes (“A.R.S.”) the following types of transactions are not subject to the State of Arizona’s Transaction Privilege Tax:… Continue Reading
Board Confidentiality – What Happens in the Board Room Stays in the Board Room
A cornerstone of corporate law is that a member of a board of directors owes fiduciary duties to the corporation he or she serves. One of these fiduciary duties is the duty of loyalty. The duty of loyalty requires board members to act in the interest of the corporation and not in the directors’ own… Continue Reading
How to Use Nonprofit Advisory Boards
An advisory board is a group of talented, experienced, wealthy, or otherwise influential individuals who are invited to provide ongoing advice and support to a nonprofit’s Board of Directors. Members of an advisory board are not typically current members of the Board of Directors, but are volunteers with a passion for the nonprofit who can… Continue Reading
IRS Study Indicates Good Nonprofit Governance Leads to Better Tax Compliance
The IRS has released preliminary results from their study of tax-exempt organizations’ governance practices. As expected, the preliminary findings suggest that organizations with good governance policies are more likely to comply with tax laws. On April 19, Lois Lerner, the Director of the IRS’ Tax-Exempt and Government Entities Division, spoke on this issue at a… Continue Reading
Toyota Announces Return of 100 Cars for Good Program!
Toyota USA is beginning the second run of its widely successful philanthropic program, 100 Cars for Good, where Toyota will award up to 100 vehicles over the course of 100 days to 100 U.S. nonprofits (eligible 501c3 organizations nonprofit Native American or Alaskan tribes with sovereignty). The application submission period ends on March 26th, so be sure your… Continue Reading
Sandy Deja’s 2012 Update of Prepare Your Own 501(c)(3) Application
In 2010, I blogged about Sandy Deja’s ebook, Prepare Your Own 501(c)(3) Application. Ms. Deja has recently updated her popular guide to tackling the exemption process. While not much has changed with the application itself (something Ms. Deja notes may not be true much longer), much has changed in the nonprofit world in the past few years.… Continue Reading
Form 990 Filing Requirements Reminder
As the time for calendar year nonprofits to file their annual tax return approaches, many nonprofits will need to remember which Form 990 their organization is required to file. As a refresher, the threshold requirements a different for each organization and depend on both revenue and assets.… Continue Reading
Choosing a Fiscal Sponsor
A fiscal sponsorship is often a great idea for small charities that do not have the resources to apply for their own tax-exempt status. It allows them to receive tax deductible donations from donors to accomplish their mission without having to expend their resources on administrative duties. However, as the recent International Humanities Center scandal has shown, it can be dangerous to get into bed with a fiscal sponsor without first performing some basic due diligence.… Continue Reading
Mechanics of a Nonprofit Merger
Merger proposals are being prompted by reduction of funding sources, the tight economy, the need for succession planning and a desire to consolidate expenses and increase capacity. Also, many funders prefer to deal with fewer providers of the same programs or services and encourage mergers and other forms of collaboration to reduce overhead and increase capacity. There are special challenges for nonprofits considering a merger. Factors, such as increased capacity and cost savings, drive the deal. Because these benefits can be more difficult to quantify, a proposed merger can feel threatening to a nonprofit board who feels they may lose power and influence. … Continue Reading
An Important Heads Up for Charities: The 2011 Form 990
The final Form 990 for the 2011 tax year has been released by the IRS and includes a few significant changes that charities should be aware of. … Continue Reading
IRS Releases New Online Search Tool
The IRS launched a new online search tool, Exempt Organizations Select Check, to help users more easily find information about tax-exempt organizations… Continue Reading