Not all public charities are alike, and not all rely on the same sources of funding. While many nonprofit leaders understand the basic requirements for qualification under Section 501(c)(3) of the Internal Revenue Code (“IRC”), fewer appreciate the ongoing obligation to maintain public charity status through compliance with the IRS public support rules. For boards, …
Not all nonprofits are the same, and not all are created for the same purpose. While 501(c)(3) public charities are the most widely recognized, another important classification exists for organizations focused on advocacy, policy change, and civic engagement: the 501(c)(4). These “social welfare” organizations occupy a unique space in the nonprofit sector, blending public purposes …
Compensation for nonprofit executives, especially CEOs, is one of the most scrutinized aspects of nonprofit governance. While nonprofit organizations are mission-driven and tax-exempt, they still operate in a competitive market for leadership talent. The IRS allows nonprofits to pay reasonable compensation for services rendered, but the line between “reasonable” and “excessive” can be narrow. For …
Private foundations are often established with the intention of existing in perpetuity, distributing annual grants to support charitable causes. Yet in recent years, many foundations have chosen to take a different path, “sunsetting,” also known as “spending down.” Instead of preserving assets indefinitely, sunsetting foundations commit to distributing all of their assets within a defined …
Nonprofit fundraising serves as a vital lifeline for organizations dedicated to public good, but it must be approached with careful attention to legal compliance and ethical standards. In California, charitable solicitation is heavily regulated to protect both donors and the integrity of the nonprofit sector. Leaders and fundraisers must understand the legal framework they operate …
For many churches, the question of whether to formally seek 501(c)(3) status with the IRS is a pivotal one. While churches are automatically considered tax-exempt under section 501(c)(3) and are not required to obtain IRS recognition of exemption, some choose to apply anyway, seeking added legitimacy or access to certain benefits. However, obtaining an IRS …
