Is the New Form 1023EZ Too Easy? Part I – Introduction

Unless your organization is fairly new, you may not be aware that the IRS Exempt Organizations Division has been grappling with a huge problem. No.  Not the one about lost emails, and Congressional subpoenas, and social welfare organizations’ political activities. This one’s about the absurdly long time it’s been taking for the beleaguered agency to approve Section 501(c)(3) tax exemptions. For several years, the Read More

"It Seemed like a Good Idea at the Time."

In “Next Time, Let’s Just Text in our Votes,” the fictional charity board members were looking for a way to avoid the time, expense, and inconvenience of monthly board meetings. “Why don’t we just put a few issues on an agenda,” one of them suggested, “email it out, circulate it online for comments and questions, and then vote by text message?” Although a shortcut like this may be a widespread practice, it’s not Read More

Drafting A Social Media Policy Manual: How Hard Can It Possibly Be?

Social media has been described as a “Wild West” that nonprofits must “tame.”  That should be your first clue. The rules and regulations governing nonprofits were complicated enough before the era of online networking.  If  an organization isn’t allowed to do something in the real world, it certainly can’t do it in the virtual world.  There are just so many more ways on the digital superhighway to take a catastrophic Read More

Who is Robert and Should Nonprofits Follow His Rules Of Order?

There’s a quick answer to the second question: Sometimes yes and sometimes no. There are pros and cons. How’s that for a lawyerly response? Professional parliamentarians love Robert’s Rules of Order, but many nonprofit experts are wary: "We have said it before and we will say it again: Most organizations should avoid Robert’s Rules of Order like the plague. . ." Back to the Beginning: Who is Robert? In 1863, U.S. Read More

One of those Days . . .

It was the Monday morning after a hugely successful weekend fundraiser. The executive director of the nonprofit drug-recovery facility arrived early at her office -- eager to start implementing new programs now possible because of the generosity of donors. Her mood changed abruptly, though, when a prominent local attorney called. A volunteer from the gala’s steering committee had taken it upon himself to post event Read More

5 Ways to Lose Your Tax Exemption

Congratulations!  You just received the long-awaited determination letter from the Internal Revenue Service. You are now a tax-exempt, charitable organization under section 501(c)(3) of the Internal Revenue Code. You can accept donations, get grants, and do great things for the world. But, if you’re not careful -- There are five foolproof ways to lose this coveted status.  You don’t need all of them. Just one -- Read More

Social Enterprises: A Revolution under the Radar

Until recently, entrepreneurs and businesses interested in being socially responsible had limited – and unsatisfactory – choices. If they set up as traditional for-profit corporations, there were serious restrictions on straying from the existing model of maximizing shareholder value. If they set up as nonprofit corporations, they endangered their tax exemptions if the primary purpose was to make money from Read More

Another Way to Sink the Ship: Too Much Lobbying

Along with prohibited political activity, another way a 501(c)(3) organization can risk its tax exemption is too much lobbying. Why? Because a tax exemption is a taxpayer subsidy to your organization -- without it, you’d have to pay tax on your revenue.  So Congress has wanted to make sure that a 501(c)(3)’s activities don’t veer too far into the partisan arena. But the lawmakers have also realized that many Read More

What about Private Foundations: Are They Allowed to Lobby?

The rules about permitted lobbying activities for 501(c)(3)s don’t apply across the board to all 501(c)(3)s.  They are meant for public charities: organizations that generally receive much of their money from donations from the general public or from grants. Private foundations are 501(c)(3)s, but their lobbying activities are much more restricted. Subject to just a few exceptions, private foundations are generally Read More

To Elect or Not Elect: That is the (Lobbying) Question

It’s a common misconception that 501(c)(3) organizations are not allowed to lobby. This may stem from people wrongly conflating the absolute ban on political activities with activities meant to influence legislation. It’s true that 501(c)(3)s are flatly prohibited from intervening in political campaigns.  But the reference to legislative activities is not absolute: . . . (N)o substantial part of the activities of Read More