Two Minute A’s to Nonprofit Q’s

Posted on May 17, 2012 by Jessica Shofler | Posted in News

Are you new to the nonprofit world? Do you have a million questions you are too embarrassed to ask or are you trying to gather some general knowledge about what it takes to run a nonprofit?

If you answered yes to these questions, then 2-Minute Answer Guide for Nonprofits, a recent collaboration of the Center for Nonprofit Management (CNM) and Cause Communications, may be just the thing. While certainly not exhaustive, this resource provides fast answers to frequently asked questions and can be a starting off point for nonprofit leaders.

CNM is also working on an online university for nonprofit leaders. Currently, the website only features grant writing online courses, but it appears that in the future the website will provide additional learning opportunities.

We haven’t had a chance to review either of these resources thoroughly, so we cannot attest to their accuracy. Please let us know what you think!

Tagged ,

Can Governance Affect Tax-Exempt Compliance?

Posted on May 15, 2012 by Jessica Shofler | Posted in Board, IRS, News

Lois Lerner, director of the IRS’ exempt organizations division, says YES. Specifically, an IRS  study (albeit a small one) found that if your nonprofit follows these 4 governance practices, it is more likely to also comply with IRS tax rules:

1.    Have a written mission statement.
2.    Compare your nonprofit to other nonprofits when making decisions about compensation.
3.    Have internal procedures to ensure your nonprofit’s funds are used in accordance with its charitable mission.
4.    Require the entire Board of Directors to review the 990 every year.

Lerner also noted that nonprofit organizations with broader board and staff involvement are more likely to meet IRS tax-exempt standards.

With our extensive experience, we could have told the IRS the same thing.

Tagged , , ,

IRS Provides Guidance on PRIs

Posted on May 10, 2012 by Jessica Shofler | Posted in IRS, News

If you are a leader of a private foundation that engages in program-related investments (PRIs) and you find yourself constantly confused about the rules, you are not alone. To provide some much-needed relief, the IRS proposes publishing 9 new examples of acceptable PRIs. If your private foundation does not offer PRIs, the new regulations may also make it easier to start.

Existing examples of PRIs focus on domestic situations involving economically disadvantaged individuals and deteriorated urban areas. The IRS realizes that these examples are not broad enough to cover the many situations in which a private foundation may want to invest.

New examples proposed by the IRS illustrate that PRIs are not limited to the aforementioned situations, and they also make it clear that an investment funding activities in a foreign country may qualify as a PRI. The proposal also may clarify how private foundations could invest in certain hybrid corporations and other social enterprises.

If you have comments or want to request a public hearing, the IRS wants to hear from you by July 18, 2012. Check here for addresses and other contact info.

Tagged , , ,

Another Call for IRS to Investigate Social Welfare Orgs

Posted on May 8, 2012 by Jessica Shofler | Posted in Advocacy, IRS, Lobbying, News

As you know from our previous post, the IRS has increased its scrutiny of nonprofit organizations engaging in political activity (as it does every 4 years during the presidential election cycle). This is because while 501(c)(4) organizations are allowed to engage in lobbying without limit, they are not allowed to act in favor of or against any candidate for political office.

But some believe that the IRS is not taking its oversight far enough.

Recently, Campaign Legal Center and Democracy 21 joined forces to ask the IRS to investigate 501(c)(4) organizations they believe have engaged in illegal political activity. The groups claim that not only are certain social welfare organizations spending substantially to influence elections but they are also raising millions of dollars in secret donations meant expressly for these purposes. The benefit of 501(c)(4) organizations not having to disclose their donors is an advantage above and beyond being tax exempt.

Common Cause is also pressing the IRS to take action. The organization argues that the American Legislative Exchange Council (ALEC), a 501(c)(3) organization, is “flouting” federal tax laws with its lobbying activities. 501(c)(3) organizations are allowed to engage in lobbying so long as such activities do not become a substantial part of their activities. ALEC counters that the claims are patently false, and ALEC’s lawyer argues that the activities are really just nonpartisan research and analysis, not lobbying.

Only time will tell whether the IRS will proceed with investigations against the named social welfare organizations. Prior calls to action by the watchdog organizations, including 4 prior  letters sent by Campaign Legal Center and Democracy 21, haven’t done the trick.

Tagged , , , ,

Boy Scouts Board Member Resigns Over Discrimination

Posted on May 3, 2012 by Jessica Shofler | Posted in News

A board member of the Boy Scouts of America (BSA) recently resigned to protest a scout leader’s termination based on her sexuality. The board member stated that although BSA explained its standing policy to bar gay leaders, he still believed the act was “wholly discriminatory.” (Read his entire letter here.)

Courts have already reviewed and upheld BSA’s policy barring gay leaders even though the Unruh Civil Rights Act requires business establishments to provide full and equal accommodations, facilities, privileges and services.

This is because while courts have applied the Act to charitable organizations, the California Supreme Court has ruled that certain charitable organizations, including BSA, do not qualify as “business establishments.” In other words, certain charities, including BSA, can discriminate without punishment.

However, if your charity wants to establish a program that discriminates against certain groups, consult an attorney specializing in nonprofit law before you do. Application of the Act is subjective at best and there are many factors that the court can use to determine that your charity is in fact a business establishment and thus subject to the Act.

Further, even if the court eventually rules that your charity can engage in discrimination, you will first have to get through a long litigation process that could cost your organization thousands.

Meanwhile, BSA is refusing to meet with the ousted pack leader. If you want to support her plight, check out her online petition at Change.org (which has already racked up more than 250,000 signatures).

Tagged , ,

DON'T GO IT ALONE!
Contact The Law Firm for Non-Profits to learn more about how we can help in
launching, guiding or advising your tax-exempt, non-profit organization.