Long-Awaited ERISA Decision Reached

Late last year, we previewed a pending Supreme Court case involving pension plans of religiously affiliated nonprofits. On June 5, 2017, the ruling was issued: All eight justices participating in Advocate Health Care Network v. Stapleton agreed that the “church plan” exception to ERISA coverage for employees is broad enough to include all religiously-affiliated facilities including ones that were not originally Read More

Yes, Nonprofits Sometimes Do File Bankruptcy

Although it’s a step rarely discussed in the philanthropic community, filing for federal bankruptcy relief is not uncommon and is a way to resolve the status of a nonprofit in serious financial difficulties. As with individuals and for-profit businesses, sometimes this drastic remedy is necessary.    Bankruptcy As an Option for Troubled Nonprofits Bankruptcy can become an option for a variety of reasons - some Read More

California Property Tax Exemption for Charities: A Primer

Around the nation, there are frequent news stories about the dire financial straits of state and local governments. Beleaguered officials and legislators desperately seek ways to limit the money-flow out of government coffers and to spot ways to increase revenue. It’s no wonder, then, that there’s been a lot of interest in recent years in the philanthropy sector and its generous tax breaks. At the federal level, the Read More

What is an Executive Committee?

In “Lessons for Charity Governance From Sweet Briar and San Diego Opera,” we highlighted two instances in which, under the prior leadership just ousted, it was clear that a small group of insiders had dominated and overwhelmed the boards of directors almost off the proverbial cliff. So what exactly is a corporate executive committee?  Is it necessary? Is it a valuable element of governing any corporation, including a Read More

Whistleblower Policy for Nonprofits

It’s not uncommon these days to read news reports about corporate whistleblowers. Since 2002, these brave people who report wrongdoing have had substantial protection under the federal Sarbanes-Oxley Act. That landmark legislation emerged in the aftermath of high-profile corporate corruption cases in the early 2000s; most notably, Enron. Whistleblowers were key to taking down these economic giants who were guilty Read More

The Fourth Way to Sink Your Tax Exemption: Too Much Unrelated Business Income

In “5 Ways to Sink Your Tax Exemption,” we listed the sure-fire ways to jeopardize your 501(c)(3) tax-exempt status. We’ve already introduced four of them: (1) political activity; (2) too much lobbying; (3) not filing Form 990s; and (yeah, we didn't post them in order) (5) too much private benefit. So what's number four? Actually, you might easily overlook it, too.  It's too much unrelated business income. What Read More

New California Worker Laws: How Do They Affect Nonprofits?

Sheepherders in California are special. They have their own minimum wage. On July 1, 2014, the rate jumped to $1,422.52. That’s a monthly amount, presumably because sheepherding is not your typical, 9-to-5, clock-in/clock-out, kind of gig. The minimum wage for most other California “employees” is calculated on an hourly basis. And it applies to workers of just about every employer in this state: for-profit, Read More

"Inurement and Private Benefit Have Often Been Confused"

That's what the Exempt Organizations Division tells its people who are tasked with approving (or denying) section 501(c)(3) tax exemption applications. It's also why our last blog post was titled "How to Torpedo Your Tax Exemption: The Fifth Way" instead of "How to Torpedo Your Tax Exemption: The Fifth (Private Benefit) and Sixth (No Inurement) Ways." Although they are distinct rules - and each can stand alone as a Read More

"Uh Oh. It’s the End of the Year and We Have Money Left Over!"

You’re a nonprofit. You’re panicking. That November fundraiser was a huge success.  You have money to burn. But will your tax exemption go up in smoke on December 31st? No -- so relax. Clarification: When you and we and almost everyone else in the nonprofit community use the word “nonprofit,” it usually means the type of organization that has successfully jumped through the proper state and federal hoops to Read More

So What, Exactly, is a Pledge?

Pledge Week on PBS is exciting: There’s the new season of Downton Abbey (season premiere in January - we can't wait!!), lots of your old favorite programs, and those great gifts if you make a monthly pledge. But are those offers of books, CDs, concert tickets, and other goodies just a way to entice you to pick up the phone? Certainly, that’s part of it, but there’s also another reason - a legal reason, of Read More