Blog - Page 25 of 48 - Charity Lawyer Blog

Can Non-Profits Use Donor Restricted Program Funds to Pay Overhead?

In non-profit finance and accounting, restricted contributions are those given by donors in which the donor intends the funds to be used for specific programs or purposes. As in all matters regarding donations, the stated intent of the donor rules when it comes to the purposes for which donation revenue can be allocated. If the donor allocates funds for program B, and states verbally or in writing that such funds cannot be used for administrative costs (back office, IT support, human resources, insurance, operations, etc.) to support such programming, than they cannot be used for that purpose. However, if no such explicit statement is made by the donor, non-profits can use a reasonable amount of the restricted funds received to pay for administrative costs allocable to the program designated by the donor.

September 2, 2019 No Comments

Should Non-Profits Pay Board Members?

In a recent post, Non-Profit Urban Myths Debunked, we discredited the myth that non-profit board members cannot be paid for their service. We related that IRS regulations do allow non-profit board members to be compensated for their services. We explained: First, non-profits can”and many do”enact board reimbursement policies for reasonable expenses incurred in the performance of board duties, such as travel to organization events, purchasing supplies for board business out of pocket, etc. Second, although most non-profit board members serve as volunteers, board members can be paid as board members for their services.

August 26, 2019 No Comments

Win for Democracy – Federal Court Rejects Change to Substantial Contributor Reporting Requirement

The Service announced in Rev. Proc. 2018-38 that it would no longer require most tax-exempt organizations to report the names and addresses of substantial contributors. The change did not apply to purely public charities exempt under Sec. 501(c)(3). Substantial donor information is currently reported on Schedule B, Schedule of Contributors, of Form 990, Form 990-EZ, Form 990-PF and Form 990-BL. The ruling reduced transparency with respect to substantial contributors and was widely seen as a boon to dark-money forces seeking to influence our elections.

The new Revenue Procedure was swiftly challenged in court. Montana and New Jersey filed suit to challenge the rule change on the basis that the federal data is shared with the states and they rely on the substantial-contributor information in enforcing their own laws. On July 30, 2019, a federal district court in Montana ruled that the IRS violated federal law when it adopted Revenue Procedure 2018-38.

August 12, 2019 No Comments

Nonprofit Private Inurement – When Can Insiders Benefit?

The main potential problem areas for nonprofits regarding private inurement are: 1) Compensation agreements for executive employees or trustees; 2) Business relationships with entities in which an organization insider or insider’s family member has an interest; and 3) Benefits paid to an insider or a member of the insider’s family as a member of the charitable class the organization serves. Fortunately, there are steps that non-profits can take to ensure these improper benefits do not occur.

July 29, 2019 No Comments

Starting a nonprofit

15 Steps to Building Better Nonprofit Bylaws

Nonprofit bylaws govern the internal operations of the organization. Too many nonprofits make the mistake of ignoring their bylaws. In reality, the bylaws don’t matter

July 22, 2019 No Comments

New Charter School Transparency Requirements

In July 2019, the Arizona State Board for Charter Schools (Board) approved several measures designed to make the charter schools it sponsors more transparent to the public. The Board also approved an implementation plan that will require all of the charter schools it sponsors to adopt these new charter school transparency requirements for fiscal year 2020.

July 15, 2019 No Comments

Recommended Nonprofit Governance Policies

Nonprofits are increasingly subject to growing regulatory burdens and high expectations from donors, clients, and the public. One way nonprofit boards can promote compliance with

July 1, 2019 No Comments

Fundraising Regulation

Non-Profit Endowments Clarified

The establishment and maintenance of a nonprofit endowment fund can be a very important factor in ensuring the sustainability of a non-profit corporation. There is a

June 24, 2019 No Comments

Offer Letter vs. Employment Contract: Which Should Your Nonprofit Use?

Many nonprofits question whether they should use an offer letter or employment agreement for new employees. Understanding the general use of each type of contract

June 17, 2019 No Comments