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

A Recipe for How To Get Noticed by the California Attorney General

Recently, two fellows in Napa, California, have been cooking up a hearty feast of trouble. But the saga began in 2004 when an elderly gentleman - let’s call him Mr. A - set out to get his affairs in order. Mr. A had done well for himself. His Napa residence and a substantial investment account were together valued at over $2 million. He had no heirs but wanted his estate to assist needy students with scholarships. Read More

Attorneys on Nonprofit Boards

Sometimes, it boils down to a question of hats. Two hats, to be exact. And understanding that wearing both of those hats at once can lead to big trouble. Should Attorneys Serve on Charity Boards? “We already have legal counsel because we have an attorney sitting on our board," we were told by several organization executives at a recent nonprofit governance symposium. Attorneys on nonprofit boards? It happens all Read More

The Charity Oversight Role of the California Attorney General: An Introduction

California charities and trustees know that there are multiple government agencies poking around in their affairs. We explained in “Say What? We’re Monitored by How Many Agencies?” that the Internal Revenue Service is clearly the poker-in-chief. The federal tax exemption - with charitable deductions tacked on - are huge perks that provide the IRS permission to poke. Jostling for the top spot on the state level are 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

What Happens When a Charitable Gift Begins to Smell?

The money doesn’t actually acquire a bad odor. But a charitable gift that starts out smelling like a rose may sometime later wilt from a whiff of scandal - or a full-blown gale-force storm of controversy. This is the curse of “donor taint.” It happens to small charities as well as to the greatest philanthropic organizations. If a gift has not yet been completed, then the organization must make a tough decision: to Read More

Volunteers: A Primer on Possible Perils

Volunteers. For many nonprofits, they are key to success of the organizational mission. They provide valuable assistance and are vital links to the community at large. One such group - a start-up community organization; let’s call it Organization X - is welcoming an energetic college student on summer break. The Executive Director of Organization X is ecstatic that he’s getting some much-needed office help. To Read More

A Reminder to Nonprofit Employers

Nonprofit charities get lots of perks: tax savings, deductible contributions, and preferred postal rates, to name just some. This preferential status lulls many boards and staff into a false sense of believing the rules that apply to regular corporations and regular workplaces don’t apply to them. The safest approach for nonprofits is to assume that all laws and regulations that apply to businesses and employers Read More