EEOC Wants More Information From Large Nonprofits

Exempt organizations with 100 or more employees may want to comment on a recent proposal by the federal Equal Employment Opportunity Commission (EEOC) to significantly beef up certain reporting requirements imposed on all employers including large nonprofits. Specifically, the EEOC wants to require, beginning in 2017, that all such entities  report employee compensation and hours worked - in addition to the Read More

How Many Officers Should a California Charity Have?

Especially for people who are new to the world of charities and tax exemptions, even the most basic concepts are perplexing. That includes the basic nature of the corporate structure, how it is governed, and the distinct roles (or “hats”) that various individuals perform. Particularly confusing is the perception - especially to outsiders - that one or two people are doing everything. That may well be true, but there Read More

When the Revenue Agent Comes Calling

Back in the early 2000’s, Enron, Worldcom, and other business scandals rocked the corporate world.  Although that wrongdoing involved huge, for-profit companies, it caught the attention of charity regulators at all levels of government. We wrote in “Written Governance Policies: Which Ones Should Nonprofits Have?” that the Internal Revenue Service as well as the California Attorney General (and equivalent officials Read More

A Marriage (…Um..Merger…) is Announced

One day, you’ll read about some chapters of National Organization X breaking away. The next day, there will a press release about a happy merger of separate organizations Y and Z devoted to the same charitable cause. These decisions to marry or divorce - philanthropically speaking, that is - often focus on the practical considerations of policy and strategic planning. Of course, being lawyers, our worldview is a bit Read More

Critics’ Concerns About Form 1023-EZ: Spot On

The Internal Revenue Service’s own Taxpayer Advocate Service (TAS) has confirmed that the worst fears about the new Form 1023-EZ launched in mid-2014 were well-founded. In its recent 2015 Annual Report to Congress, the “highlights” section on the cover includes this headline: “Recognition as a Tax-Exempt Organization is Now Virtually Automatic for Most Applicants.”   Troubled Form 1023-EZ Procedure The Taxpayer Read More

Trying to Wriggle Out of Feeder Organization Status?: Not Easy

Three old hippies walk into a bar …. Well, they were former hippies, but they weren't at a regular bar. They were sipping cappuccinos at a trendy spot at Venice Beach - a coffee bar. Actually, one of them was a young lawyer, but the imaginary friends joining her were some famous former hippies. Their discussion inspired the young lawyer to set up a special new business reflecting enlightened social philosophy. But it Read More

Private Letter Rulings for Nonprofits Curtailed

It’s been a tough few years for the IRS Division that has primary responsibility to implement the laws for tax-exempt organizations. The Tax Exempt and Government Entities (TE/GE) Division has endured - together with the IRS, generally - budget cuts and hiring freezes. It’s also been caught up in the fallout from the long-running saga of former Exempt Organizations Unit Director Lois Lerner and the purported partisan Read More

All Profits to Charity?: Not a 501(c)(3)

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 often surprised to learn that Paul Newman and his partner set up that salad-dressing and pasta-sauce business as a for-profit company. It gives all after-tax profits to the Newman’s Read More

GuideStar Launches Redesigned Charity Profiles

For over two decades, GuideStar has led the way in the philanthropic community to gather and disseminate charity profiles - information about “every single IRS-registered nonprofit organization.”  This influential Section 501(c)(3) organization provides “... as much information as [they] can about each nonprofit’s  mission, legitimacy, impact, reputation, finances, programs, transparence, government, …” and 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