Charity Lawyer Blog
Nonprofit Law Simplified
How Should Your Nonprofit Set the Compensation of its Executives?
A nonprofit’s board of directors is responsible for establishing the compensation (salary and benefits) for the chief executive (typically referred to as either the Executive Director, the CEO, or the President). Although the IRS does not provide specific dollar amounts or an acceptable range of compensation levels, they stipulate that compensation must be reasonable and not excessive; “reasonable” is defined as the value that would ordinarily be paid for like services by like enterprises under like circumstances.
The Consequences for Violating Articles & Bylaws
Ultra vires is a Latin term conveying that acts outside the permissible scope of authority set forth in a corporation’s governing documents are an unauthorized activity that cannot be ratified by its Board of Directors. Although many states have effectively abolished this common law concept by granting corporations significant autonomy, ultra vires continue to be an important doctrine in the tax-exempt nonprofit context because such organizations are required to limit their powers to qualify for tax exemption.
The need to register is triggered by active solicitation efforts such as sending out mailers or participating in commercial co-ventures. The charity does not need to actually receive a donation to trigger registration in many states.
The Role of Officers in a Nonprofit Corporation
Nonprofit organizations are governed by a board of directors responsible for making significant decisions and ensuring that the organization operates in compliance with relevant laws and regulations. However, to carry out the board’s responsibilities, nonprofit corporations need to have officers elected by the board.
Fundraising Regulation for Nonprofits
Charities raise funds in a variety of ways, including in person, by telephone, direct mail, email, and through internet solicitations. They also sponsor fundraising events such as dinners, galas, door-to-door sales, concerts, carnivals, sports events, and auctions. Both state law and federal law apply to fundraising activities.
Charitable Deductions – Date of Gift Rules
The date of gift rules can be convoluted, but they are important for 501(c)(3)s to understand. 501(c)(3)s must provide receipts to donors, which include the date on which the contribution was received. Having a healthy grasp of these rules will help facilitate donor acknowledgments and ease the burden of frantic donors requesting information come year-end.
Blockchain Applications in the Nonprofit Sector: Part IV – Cryptocurrencies
This is Part IV of a four-part series about applications of blockchain technology in the nonprofit sector. Part I of this series introduced blockchain technology
Blockchain Applications in the Nonprofit Sector: Part III – Decentralized Autonomous Organizations
This is Part III of a four-part series about blockchain technology in the nonprofit sector. In this Part, we cover decentralized autonomous organizations and how
Blockchain Applications in the Nonprofit Sector: Part II – Smart Contracts
This is Part II of a four-part series covering blockchain technology in the world of nonprofits. In this Part, we discuss smart contracts and