According to a May 2009 study, “The Impact of Giving Together: Giving Circles’ Influence on Members’ Philanthropic and Civic Behaviors, Knowledge and Attitudes,” conducted by the University of Nebraska at Omaha, the Forum of Regional Associations of Grantmakers, and the Center on Philanthropy at Indiana University, giving circles contribute more and act more strategically. The […]
Author: Emily Chan
Selecting the State of Incorporation
Founders of to-be-formed nonprofit corporations may be confused about selecting an appropriate state of incorporation. The general rule of thumb is to incorporate in the state in which the nonprofit will operate. This may substantially reduce the nonprofit’s reporting requirements and associated burdens. If the nonprofit is incorporated elsewhere, it may be required to qualify […]
Conversions Between a For-Profit Corporation and Nonprofit Public Benefit Corporation
California allows a for-profit corporation to convert into a nonprofit public benefit corporation and vice versa provided that certain steps are followed for each respective process. For-profit corporation to Nonprofit corporation Generally, a for-profit corporation can convert to a nonprofit public benefit corporation by amending of its articles of incorporation. See Calif. Corp. Code § […]
Private Letter Rulings and the L3C
2009 is an interesting year for the low-profit limited liability (L3C) concept because it presents the first test of an L3C’s ability to operate under current federal law and IRS regulations. One concern raised is the process by which private foundations will make program-related investments (PRIs) to this new legal entity. A PRI is an […]
Donation Policy – Controversial Donations
Nonprofit organizations should not feel obligated or compelled to accept every donation offered; there are donations that may not benefit the organization. A “controversial category” of donations can come in many forms and will often be specific to the organization. Therefore, every nonprofit should have a donation policy in place that allows the organization to […]
Minimizing Financial Fraud
Despite the strong ethical culture of the nonprofit sector, the EthicsResource Center (ERC) has reported that financial fraud is more prevalent in nonprofits than for-profit businesses or the government. In their article, “Minimizing financial fraud” (Nonprofit Observer, Fall 2008), San Francisco Bay Area CPA Firm Lautze & Lautzeprovides a quick guide to a multi-faceted defense […]
Amateur Athletic Organizations
To qualify for 501(c)(3) tax exempt status, an amateur athletic organization must fall under one of three rationales endorsed by the IRS: An organization is educational by either teaching sports to youth or being affiliated with an educational organization. Such organizations may also provide facilities and equipment. An organization that “develops, promotes, and regulates a […]
Avoid Common Accounting Missteps
In their Fall 2008 Nonprofit Observer publication, San Francisco Bay Area CPA Firm Lautze & Lautze offers advice on how to avoid 8 common accounting mistakes among nonprofits (summarized below): 1. Follow accounting procedures Every nonprofit, large or small, should establish a formal, documented, and detailed accounting process that includes all aspects of managing the […]
IRS 501(c)(3) Revocation Letter
On September 16, 2008, the IRS released Determination Letter 200851031 – a revocation letter of 501(c)(3) exempt status for the applicant organization’s failure to pass both the organizational and operational tests required of 501(c)(3) organizations by the Department of the Treasury. Regarding the organizational test, the IRS cites the organization’s failure to amend its Articles […]
Princeton and Robertson Family Donor-Intent Dispute
Generally, a charitable gift given and received for a particular specified purpose may be used for that purpose and none other. Recently, litigation arose over Princeton University's alleged misuse of an endowment associated with the Robertson Foundation, currently valued at about $900 million. The University-designated trustees of the Foundation, who made up a majority of the […]