Navigating the Tax Maze: California Sales Tax Obligations for Nonprofits

Two friends enter a deli in downtown San Diego for some take-out. One orders a ham and cheese sandwich and is charged $5.95. The other orders the same, but her sandwich is toasted. She’s charged $6.43. Same food, same store - but the hot sandwich costs more than the cold one. That’s an example of the inscrutable sales tax laws encountered by every Californian who has ever ordered food to go. “What does any of this Read More

Nonprofit Fiscal Sponsorships: Sometimes the Better Route to Take

A client comes in with an idea - sometimes a rush of ideas - about needs unmet in the community and how to fill those needs. This person is "thinking about starting a nonprofit organization.” Of course, most of us in the philanthropic sector know that it’s not a simple matter to get a 501(c)(3) up and running with the all-important determination letter from the IRS approving tax-exempt status. It also takes time, Read More

Drama at the San Diego Opera: A Dynamic Different Than Sweet Briar

We posed a question in “Sweet Briar College: Saved - At Least for Now”:  Does the board of directors have the final say in closing down an organization? There, the focus was Virginia’s Sweet Briar College, whose board voted unanimously in early March to stop operations at the 101-year-old women’s college after the end of the spring 2015 semester. The announcement of “insurmountable financial obstacles” was a shock Read More

It’s Just a Little Raffle: What’s the Big Deal?

At a conference table somewhere in California, yet another group of charity trustees is stepping, blindly, into a pile of trouble. The topic: Fundraising.  The plan: A raffle. “A 50/50 raffle,” suggests one trustee, “like the one the Detroit Lions had last year when I was home visiting the relatives. It raised a ton of money for a local nonprofit, and the fans loved it.” “Sounds great,” replied another. “No problem; Read More

Sweet Briar College: Saved – At Least For Now

Deciding to shut down a long-standing nonprofit institution is perhaps the most gut-wrenching decision a board of directors may face. But - once made - is the board’s decision final and irrevocable? Can important stakeholders object to, or formally challenge, the closure vote? Who has the last word?  The Sweet Briar Case  On March 3, 2015, when interim President Jeffrey Jones emailed the faculty and staff of Read More

What Could Possibly Be Worse than Poverty Porn?

What could be worse? “Poverty porn” that isn’t even true, that's what. First Things First: What, Exactly, is “Poverty Porn”? It’s a term that has emerged in recent years to criticize the practice of telling gritty stories and portraying gruesome images and video of destitution, of natural catastrophes, or of serious illness, injury, or deformity in order to create interest in media (newspapers, TV, movies) or to Read More

“Ex-Officio Director”: What Does That Mean?

In “Bylaws are Sometimes Like a Decades-Old Hairstyle,” we pointed out that many nonprofits continue to operate, year after year, under the same bylaws that were prepared and adopted when the organization was formed. In some cases, these crucial operating rules have remained the same for 25 years, or even 50 years or longer. Why is that a problem?  Organizational missions evolve, circumstances change, and groups grow Read More

Payroll Taxes: The One Payment a Nonprofit Should NEVER Skip

It happened to the Alliance of AIDS Services-Carolina. The 25-year-old organization had a long-standing contract with Wade County, North Carolina.  But in 2012 and 2013, the nonprofit began to have some financial difficulties. In order to “manage” these problems, the organization did something “excruciatingly common.” It missed payment on payroll taxes to juggle and pay other outstanding bills. But the Internal Read More

Appreciating Volunteers: How Much is Too Much?

At a recent presentation we gave to nonprofit practitioners, the topic of providing gift cards to say "thank you!" to volunteers arose. Most attendees were surprised at how complex such a simple prospect could be for a nonprofit. Could it be viewed as compensation or a taxable event to the recipient?      Classification: When the Volunteer becomes an Employee or Independent Contractor In “Volunteers: A Primer of Read More

A Second Way to Get Noticed by the California Attorney General

Great news! You’ve formed your nonprofit organization in California and you've just sent in your application for federal tax exemption. So you rush right out and ask for donations, right? Wrong. That’s the second way that your organization can get an invitation from the California Attorney General’s office to explain yourself. What’s the first way? Take a look back at two earlier posts. In “The Charitable Read More