Overtime Rules Changes: More News

A little over a year ago, the Obama Administration Department of Labor announced a huge pay raise for millions of American workers - just in time for the 2016 holiday season. This gift came in the form of final overtime regulations, set to take effect on December 1, 2016. Under the new formula, the number of employees eligible to receive time-and-a-half when they have to work long hours would greatly increase. Some Read More

Newest Twists on the Johnson Amendment

The “Johnson Amendment” has been confusing and controversial since it was tossed into 501(c)(3) of the Internal Revenue Code in 1954. That year, Congress decided it was time to completely overhaul the existing federal tax code. At the 11th hour, without discussion or debate, then-Senate Majority Leader added the last few words to an already succinct 132-word definition of which organizations can qualify for the most Read More

GuideStar, "Hate Groups," Death Threats & A Lawsuit

What do you get when you mix: a respected charity-information reporting agency, a highly regarded civil-rights organization, 46 organizations with 501(c)(3) status but who espouse alt-right ideology, death threats, and litigation? You get a mess - though a fairly predictable one - now in the high-drama summer heat of 2017. [Note, 8/14/17: This post was written well before the tragic events of August 12th Read More

Charities in the Courtroom 12: A Donation with Baggage

More than once we’ve discussed "problem donations" and "tainted donors." With a "problem donation," the gift itself - (often an in-kind donation) - is gratefully accepted but turns out to be much more trouble than it’s worth. See, for instance, Who Would Run Away From a Big Charitable Gift?  You Should . . .  Sometimes. The "tainted donor" situation is where the gift is wonderful - generally, an enormous wad of cash Read More

Charity Asset Distribution on Dissolution: Who Decides?

When a 501(c)(3) charitable organization winds up its affairs, a key issue is the distribution of assets on the dissolution. Under federal tax law, a 501(c)(3)’s organizing documents must specify that its assets will be “irrevocably dedicated to charitable purposes.” The laws of most - if not all - U.S. states include a similar limitation. The critical task of the disposition of assets must meet the standards of the Read More

Charities in the Courtroom 11: Old Ladies, Charity Bequests, and “Never Mind”

It’s a familiar tale in this installment of our Charities in the Courtroom series: Elderly person makes charitable bequest; charity gets excited and makes plans; elderly person - or a representative -reneges.    Just Say No: Backing Out of a Promised Donation Back in the day, Dena and Ellis Meyers had a developmentally disabled son, Stephen, who became “one of the first residents” in 1981 of the supervised housing Read More

Nonprofits in Bankruptcy Must Plan Carefully

“Although it’s a step rarely discussed in the philanthropic community,” we explained in “Yes, Nonprofits Sometimes Do File Bankruptcy,” “filing for federal bankruptcy relief is not uncommon and is a way to resolve the status of a nonprofit in serious financial difficulties.” Sometimes - for individuals, for businesses, for charities - “this drastic remedy is necessary.” Non-profits can benefit from the bankruptcy Read More

Charities in the Courtroom, Pt. 10: Disabilities Accommodation Rules

A recent federal court ruling in Texas is an important reminder that nonprofits must pay careful attention not only to the laws directly affecting their favored tax status, but to general laws as well like those that apply across the board to all employers. EEOC v. Methodist Hospitals of Dallas, No. 3:2015-cv-03104 (N.D. Tex. Mar. 9, 2017) involved a nonprofit institution covered under the Americans with Disabilities Read More

501(c)(3) Groups: Steer Clear of the Legal Minefields

For directors and staff of many 501(c)(3) organizations, a primary concern and ongoing worry is - as it should be - compliance with all rules and regulations necessary to maintain the valuable federal tax exemption. Indeed, in earlier posts, we highlighted - collectively and individually - the key ways that a 501(c)(3) can sink a tank exemption. That was - actually - the title of the lead post in this multi-part Read More

Protecting Assets of a Separate Supporting Foundation

The philanthropic sector includes much more than the simple model of a single 501(c)(3), publicly supported, charitable organization. A fairly common variation, especially for prominent community institutions, is to establish a separate organization which goal it is to support the main charity.  Indeed, it is created and exists “solely to support one specific nonprofit corporation.” The Internal Revenue Service Read More