We are used to hearing lots of folks – including yours truly – complain about the “nonprofit birth control” problem in this country. While it is true that too many nonprofits are formed for the wrong reasons – there are also many good reasons to form a new nonprofit. The trick is to learn to tell the difference.
To folks who are new to nonprofit governance, grasping the difference between directors and officers of a nonprofit corporation can be confusing.
Many small nonprofits without sufficient funds to hire a fundraiser on a fee for service basis view percentage based compensation as a godsend. First, percentage based compensation permits the nonprofit to gain the assistance of a professional fundraiser without any risk to the nonprofit’s bottom line. In addition, the fundraiser is likely to be more motivated if they are paid based upon the funds raised.
The Washington Post has identified over 1,000 nonprofit organizations that have reported a significant diversion of assets. Its important to note that there are over 1,616,000 tax-exempt nonprofits in the U.S. today; thus, these filings represent less than 1% of tax-exempt nonprofits. It’s also interesting to note that a quick review of Arizona’s list includes only 21 organizations – most of which reported the diversions in a clear, transparent, and confidence inspiring manner.
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.
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?
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.
To better coordinate their philanthropy, many companies choose to create corporate foundations to organize, focus, track, and publicize their philanthropic efforts.
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,
In an effort to make applying for tax exemption easier, the IRS Exempt Organizations (EO) office is developing an Interactive Form 1023, Application for Recognition of Exemption (i1023).
Most states require you to register your organization if you solicit donations from their residents. Many states also require registration if your organization collects substantial or ongoing donations from their residents, even if you aren’t specifically targeting donors in that state. Download our comprehensive list of each state’s requirements.
Download our free guide to learn about the many elements needed to run a successful nonprofit organization, as well as how to avoid common pitfalls and mistakes.