5/28/16 Update: Costly bill that would have required charities in California to post a “warning label” on their websites and fundraising documents was held in committee and will not advance. AB 2855 was a dangerous bill that threatened nonprofits raising funds in California and reflected the lack of understanding of its author/sponsor, California Assemblymember Jim Frazier (D...
CALIFORNIA LAW
Foreign Corporations and the Application of California Nonprofit Laws
A foreign corporation, a corporation formed under the laws of another state, that conducts business in California may be subject to more of California’s laws and jurisdiction than one might think. Generally, activities occurring in California are regulated by California laws (e.g., employment, health and safety, revenue and taxation)....
How to Start a 501(c)(4) California Nonprofit Step by Step
You’ve got an idea for making the world a better place, and you want to start a 501(c)(4) nonprofit social welfare organization as the means to do so. In contrast to a 501(c)(3) charitable organization, a 501(c)(4) organization may engage in unlimited lobbying in furtherance of its social welfare...
Commercial Fundraiser – A Revised Definition
Beginning on January 1, 2016, a “commercial fundraiser” in California is defined as any individual, corporation, unincorporated association, or other legal entity who for compensation does any of the following: Solicits funds, assets, or property in this state for charitable purposes. As a result of a solicitation of funds, assets, or property...
New California Regulation Poses Threat to Nonprofits Not Properly Registered
Effective as of January 1, 2016, new regulations related to administrative enforcement of violations of the Supervision of Trustees and Fundraisers for Charitable Purposes Act go into effect. We wrote about the regulations when they were first proposed (see our post explaining our opposition to the regulations here). Also...
California Governor Signs Administrative Dissolution Bill Into Law
On September 30, 2015, Governor Brown signed into law Assembly Bill No. 557, making amendments to the laws governing dissolution of California nonprofits. The amendments, which will become effective on January 1, 2016, essentially create two new sets of dissolution procedures for California nonprofits: an automatic dissolution process...
California Social Purpose Corporation: An Overview
The social purpose corporation is one of two “hybrid” corporate forms in California that provide alternative business entity options to entrepreneurs who want to combine profitability with broader social and environmental objectives (the other is the benefit corporation). Formerly known as the flexible purpose corporation, the social purpose corporation...
Executive Compensation – The Legal Issues
Determining the appropriate amount of compensation to pay an executive is one of the most important decisions a board is asked to make. Board members must balance budgetary concerns with the need to find a qualified candidate. Traditionally, it was not uncommon for nonprofits to expect executives to work...
Proposed Regulations Threaten California Nonprofits – Comments due July 13
UPDATE (10/31/15): UNFORTUNATELY, THESE REGULATIONS WERE PROMULGATED AND WILL BE EFFECTIVE AS OF JANUARY 1, 2016. WE WILL BE FOLLOWING UP WITH A POST ON THE IMPORTANCE OF MAKING NONPROFITS AWARE OF THE NEW RULES AND OF INCORPORATING AN ANNUAL CHECKLIST AS PART OF EVERY BOARD CALENDAR. In a...
California Charity Registration: Form 990 Schedule B Disclosure
California requires a charity subject to its registration requirements to submit its IRS Form 990 including Schedule B (Schedule of Contributors) with its annual registrations to the Registry of Charitable Trusts. The list of major contributors, which remains confidential pursuant to current policy and proposed regulations*, may not be redacted from the filing. While the...
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