Today, many charities are unable or unwilling to hold board meetings or membership meetings in person due to the pandemic and social distancing requirements and are considering, perhaps for the first time, holding their meetings electronically. In between the complexity of mastering Zoom and figuring out the most flattering lighting, many may not realize that their organization’s articles or bylaws do not permit virtual meetings.Â
Now is the time for thoughtful and decisive action. But how does your board do this when you canâ€™t physically convene? Hope isnâ€™t lost. Hereâ€™s what you need to know to hold an emergency board meeting.
Technology now offers businesses and boards many advantages, including the ability to meet via teleconference, video conference, or even conduct discussion and voting via electronic communications, such as email.Â But while email is commonplace among many organizations for its ease of use, especially for busy and geographically diverse volunteers sitting on nonprofit boards, there are several reasons to think twice before using email for your next important nonprofit board vote.Â
Nonprofit bylaws govern the internal operations of the organization. Too many nonprofits make the mistake of ignoring their bylaws. In […]
We have written about how to form chapters and affiliates, but sometimes nonprofits ultimately decide they have created too many […]
When setting up a non-profit organization, many people overlook the importance of crafting nonprofit bylaws that are customized to the […]
In May 2018, the Arizona Corporation Commission released a major update to their website’s online services.Â Users can create an […]
Nonprofits corporations are required to have a registered agent in their state of domicile and in each state where they are registered to do business. The purpose of a registered agent is to ensure that there is a place with a street address (as opposed to a P.O. Box) where an organization can be contacted or served with notice of a lawsuit or other legal action.
Newly formed charities often encounter a chicken and egg problem. They wish to begin their operations before they receive formal approval of their tax-exempt status but they canâ€™t attract funding until they receive their federal 501(c)(3) determination.
HB 2592, which becomes effective on August 6, 2016 (â€œEffective Dateâ€), amends A.R.S. Â§10-3708 to allow the delivery of member ballots through an electronic voting system. It is important to understand this change does not apply to director votes which do not have a written ballot option.
The group of individuals charged with the governance of nonprofits are often referred to interchangeably as â€œdirectorsâ€ or â€œtrustees.â€ These terms are similar in that they both refer to the group of individuals who have a fiduciary duty to oversee the nonprofit organization. However, from a legal perspective, there are important distinctions.
Exempt organizations that wish to change their name often secure a trade name or â€œdo businessâ€ 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 organizationâ€™s legal name with both state and federal authorities to present a unified and cohesive brand to donors and supporters.
Increasingly, nonprofits are creating affiliate organizations such as entities to hold real property, taxable subsidiaries that run unrelated businesses, lobbying organizations, foundations, chapters, and even management organizations. There are myriad reasons to create affiliates but there are a number of common scenarios that we will touch in this post.
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.
Prior to passage of AREA, an entity seeking to change its structure likely had to undergo a multi-step transaction to accomplish its goal. AREA permits direct conversions and makes clear that it applies to all entity types (corporations, nonprofits, benefit corporations, LLCs, partnerships, etc.).
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 vendorâ€™s favor on the theory that many clients will sign whatever is given to them without scrutinizing the terms.
Over the years we have worked with organizations in many different states and have had the chance to form some opinions about choice of domicile for nonprofits. Some of the factors that have influenced our thoughts on this matter include states requiring mandatory audits, multiple agencies overseeing nonprofits, unclear statutes governing nonprofit corporations, and aggressive regulation.
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 stateâ€™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.
n the context of a nonprofit corporation, a quorum is the number of board members that must participate in a board meeting to permit official business to be transacted at the meeting.
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.