Online Marketing Must Match Nonprofit Mission

March 15, 2012 Posted by The Law Firm for Non-Profits, P.C. in Fundraising, IRS, News

Be careful what your nonprofit puts on its website or on social networking sites like Facebook.

When the IRS reviews an application for tax-exempt status, one thing the agents often check is whether an organization’s website or social networking site matches what the organization states on its application. Similarly, when the IRS audits an organization to determine whether it is still acting within its tax-exempt purposes, IRS agents will look online for continuity.

Recently, a tax-exempt organization wasn’t being very careful. The IRS revoked the tax-exempt status of the organization partly based on information found on the organization’s Facebook profile. The IRS initially acknowledged the organization’s tax-exempt status based on its plan to gather and ship food and clothing to indigent families in a foreign country.

During the IRS review, however, the IRS agent found that the organization’s Facebook profile stated that the organization offered monthly container shipments from various cities in the US to the foreign country. While this profile was not determinative, it became one major element in the IRS’ determination that the organization was acting like a business, not a charity.

You should learn from this organization’s mistakes. Before you launch your website or set up a profile on a social networking site, contact us or your trusted nonprofit legal advisor to ensure it won’t jeopardize your organization’s tax-exempt status.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits, 4705 Laurel Canyon Blvd, #306, Studio City, CA 91607

Comments are closed.