Grants to Foreign Organizations: New Guidance

Private foundations have different - more stringent -  rules and requirements than 501(c)(3) organizations that are classified as public charities. The reason for this distinction: Foundations don’t solicit or receive donations from a wide swath of the general public, so there are special rules and regulations to ensure proper oversight. This is a particular concern for United States foundations that seek to assist Read More

What Does “Lessening the Burdens of Government” Mean?

The year 2018 is shaping up to likely include dramatic cuts in government funding for social services. In order to lessen the impact on tens of millions of Americans, there will need to be a response by donors and the philanthropic community in the form of new organizations - or expansion of existing ones - to focus on the "exempt" purpose of "lessening the burdens of government."  The pivotal federal tax-exemption Read More

Public Disclosure of 990s: What You Need to Know

When you file your personal income tax return each April 15th, you're entitled to secrecy about it unless you choose to show it to another person, submit it to a bank, or send it out to the general public with a flashy press release. For a 501(c)(3) organization, the rules are different: A tax-exempt group must make its Form 990 information return available upon request to the general public. These disclosure Read More

Nonprofits and The Tax Bills: A Half-Time Update

Since the first days of January 2017, the party in control of both the White House and Congress has promised a major overhaul of the federal tax code. Until the first week of November 2017, when the House GOP leadership unveiled the “Tax Cuts and Jobs Act,” (H.R.1), there was little more than informed speculation about the particulars.      November Action on Tax Bills The sheer number and scope of proposals directly Read More

Charitable Deduction Substantiation: Redux

“Redux”: Something “brought back.” (Merriam-Webster Dictionary) Back in February 2017, we posted “...a cautionary tale for everyone out there who wants to take a $65-million charitable deduction. Or a $250 deduction. Or whatever.” Follow the rules, we advised. “‘It is not exactly rocket science.’” There are hoops to jump through - not particularly complex or onerous ones - to substantiate a claimed deduction. Read More

A Form 990 Audit: What Triggers It?

It’s a classic “cart before the horse” scenario. Last year, in our 6-part When the Revenue Agent Comes Calling series, we discussed how the government official will use the IRS’s Form 14114, "Governance Check Sheet," to conduct an audit of your organization: An IRS revenue agent knocking at the door of a 501(c)(3), tax-exempt, organization will have in hand that agency’s Form 14114, Governance Check Sheet, that Read More

Patient-Advocacy Charities' Dark Ties: Updates

Recently, in Patient Advocacy Nonprofits’ Dark Ties to Industry, we highlighted the murky, questionable relationships of pharmaceutical companies with patient-advocacy groups. “Patient groups are supposed to represent patients,” we wrote. “But many have deep ties to industry.” The national media is now covering two new research projects uncovering “the incestuous connections between patient-advocacy groups and the Read More

What to Do With an Unusual Grant

Imagine a scene like this: A small group of people is celebrating the receipt that day of an IRS Determination Letter granting 501(c)(3), tax-exempt, status for their new community organization. They are still at the “sitting around a dinner table” stage because there hasn’t been time or the funds to set up office space. On the agenda for that evening is crafting a fundraising strategy to attract financial support Read More

501(c)(3)s Behaving Badly

There are hundreds of thousands of  501(c)(3)s in the United States. Most do great work and are operated cleanly and ethically. Others … not so much.    Case Study No. 1:  Tom and his Best Buddies New England Patriots Quarterback Tom Brady is rich: His estimated net worth is about $180 million or so. His wife, supermodel Giselle Bundchen, is worth almost double: about $360 million. “Like many successful celebrities, Read More

Another Feeder Organization Denied Tax Exemption

In “All Profits to Charity?: Not a 501(c)(3),” we noted that from time to time, folks come into our office with the idea of doing something like Newman’s Own; that is, starting a business and donating all the proceeds to charity. They ask us to help them set up a 501(c)(3) organization. They are generally surprised to learn that Newman’s Own is set up as a for-profit business, and that giving all proceeds to charity Read More