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.

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.

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.

Get Your Non-profit Up And Running: 4 Things To Do First

Have you ever had an idea you can see so clearly, so precisely, that you know it has to be shared with the rest of your community, state, country, or even the whole world? You’ve probably thought about starting a non-profit organization as a way to turn your dream into a reality.

It’s important to remember that a non-profit organization is a business, just like all the for-profit companies out there. You should think like a CEO right from the start. With the proper tools and support, you can start giving back to your community and changing lives.  In this post, we’ll explore four things you should do as you make plans to get your non-profit organization up and running.

Fiduciary Responsibility of Nonprofit Boards

The recent high-profile ouster of Southern Poverty Law Center CEO and Founder Morris Dees, and the resignation of Board Chair Richard Cohen, show how things can go awry when a board does not provide appropriate oversight.

The board collectively, and directors/trustees individually, owe fiduciary duties to the nonprofit organization they serve. In essence, exercising fiduciary duties means that board members have a duty to act with care and in the best interest of the organization and remain loyal to its mission, as opposed to acting in their own interest or the interest of the CEO/Executive Director they supervise.

Fingerprinting for Nonprofit Volunteer Background Checks

A nonprofit can never be too careful when screening its employees and volunteers. As such, more are conducting due diligence on their employees and volunteers. This is particularly true for those that serve vulnerable populations like children, the elderly, or abuse victims. Part of that diligence is having the volunteer fingerprinted for a background check. If your organization is considering adding this step to its due diligence, do you know where to go for fingerprint background checks?