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.
Starting a nonprofit
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.
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.
Going into effect January 1, 2015, the Arizona benefit corporation statute will enable entrepreneurs to form a corporation unlike anything Arizona has seen before. Benefit corporations enable social entrepreneurs to create a corporate structure requiring the corporation to create a general public benefit. As with anything new, its details are untested and some confusion surrounds it. Below we dig into the statute and detail what you will and will not be able to do in 2015.
Many founders feel guilty accepting reasonable compensation from the nonprofit they have nurtured but if they continue to forgo a reasonable salary, they risk erecting a house of cards that will fall apart as soon as they burn out.
The state form does not include the tax provisions that the IRS requires tax-exempt organizations to have. Would be founders that file using the state’s form Articles of Incorporation without including an attachment with the appropriate tax provisions will end up with a taxable nonprofit – a result almost no one intends.
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.
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?