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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Nonprofits have a compelling negotiating tool that pairs employee debt relief with long-term employee commitment (at least to the sector) and doesn’t cost the nonprofit anything.
Donors wishing to help the victims of a tragedy, a serious illness, or other major hardship are often surprised to learn that gifts earmarked for specific individuals are not tax deductible as charitable contributions. This rule catches many donors off guard as it is not intuitive that gifts made to individuals who are clearly in need would not be considered charitable.
The Form 990 filing deadline is coming up May 15 for tax-exempt organizations filing taxes on a calendar year basis.
Increasingly, nonprofits are creating affiliate organizations such as entities to hold real property, taxable subsidiaries that run unrelated businesses, lobbying organizations, foundations, chapters, and even management organizations. There are myriad reasons to create affiliates but there are a number of common scenarios that we will touch in this post.
The group exemption permits a central or parent organization to certify that each subordinate qualifies for exemption and to include it under its umbrella for tax-exemption purposes. The process is designed to reduce paperwork for both taxpayers and the IRS where affiliated entities are similar in their purpose, structure and operations.
Prior to passage of AREA, an entity seeking to change its structure likely had to undergo a multi-step transaction to accomplish its goal. AREA permits direct conversions and makes clear that it applies to all entity types (corporations, nonprofits, benefit corporations, LLCs, partnerships, etc.).
Too often, we see nonprofits signing contracts that are presented to them by vendors without appropriate legal review. Many vendors use form contracts that are extremely one sided in the vendor’s favor on the theory that many clients will sign whatever is given to them without scrutinizing the terms.
At the end of each year we like to look back at our most popular posts to evaluate what our readers are finding most interesting and useful on the blog. What follows is a list of CharityLawyer’s Top 10 posts for 2014 measured by page views