A board of a nonprofit is generally empowered to create committees at its discretion, subject to the organization’s bylaws and the laws of the state of its incorporation. For each committee it creates, the board should determine the level of authority to be given to the committee and...
BOARDS / GOVERNANCE
An engaged board can be one of the most important organizational assets of a nonprofit. But nonprofit boards are often underutilized and are not always effective in significantly advancing an organization’s mission. Educating boards and executives about their legal duties, practical steps to take to effectively meet those duties, and best practices in mitigating exposure to organizational and personal liability/harm is key to establishing board engagement and effectiveness.
Nonprofit Radio: Board’s Role in Program Oversight
Repeat broadcast on Friday, September 15, 2017 … here I’ll be on Tony Martignetti Nonprofit Radio on Friday, January 10, 2014 talking with Tony about the board’s role in overseeing programs. Hope you’ll join us live at 10:30 am.PT / 1:30 pm ET or catch us later on iTunes. Nonprofit boards...
FTB Revocation Policy for Failure to File Statement of Information or Form RRF-1
At a meeting of the California Bar Association’s Tax Exempt Organizations Committee last Friday, the issue of the California Franchise Tax Board (“FTB”) revoking an organization’s state tax-exempt status for failure to timely file a Statement of Information with the California Secretary of State was raised. Several representatives of...
Social Enterprises: Nonprofits vs. For-Profit
I'm honored to be speaking tomorrow at the 2013 BoardSource Leadership Forum on Social Enterprises: Nonprofit vs. For-Profit. Here's the description in the program: As the activities of nonprofit and for-profit organizations continue to blur with the commercialization of charities and the growth of socially purposed taxable entities,...
Nonprofit Overhead: Good and Bad
Last Friday, Gene was on Nonprofit Radio discussing examples of good and bad overhead following host Tony Martignetti’s interview with the three signatories to The Overhead Myth letter. The growing rejection of the myth that overhead is a good way to measure a charitable organization’s value is a promising...
Unrelated Business Income and the Commerciality Doctrine
As is clearly determined (and as we’ve discussed several times on the Nonprofit Law Blog), in order to establish and maintain tax exemption under Section 501(c)(3), an organization must be primarily operated for an exempt purpose. What is less clearly determined, however, is when a 501(c)(3)’s tax exempt status...
Executive on the Board: Some Pros and Cons
The governance structure in a corporation, whether nonprofit or for-profit, consists of an executive who reports to a board of directors. The executive and the board have distinct responsibilities: management and governance, respectively. But there are areas in which those responsibilities blur, and that can result in tension...
Private Benefit Doctrine – A Few Examples
The private benefit doctrine is the broadest of the private benefit rules that apply to 501(c)(3) organizations. It generally provides that a 501(c)(3) organization may not confer any benefit, monetary or otherwise, on any individual or entity that is not incidental, quantitatively and qualitatively, to furthering the organization’s exempt...
Nonprofit Radio: Back to Board Basics
I'll be on Tony Martignetti Nonprofit Radio tomorrow, July 26, at 10:25 am PT / 1:25 pm ET discussing some basic but important board issues with Tony. We may cover topics like: Is it okay to have a compensated CEO also serve as a director on the board? Is...
Overhead Myth: Thoughts from a Nonprofit Attorney
On June 17, 2013, the CEOs of GuideStar, Charity Navigator, and BBB Wise Giving Alliance signed a letter to the Donors of America denouncing the “overhead ratio” as a valid indicator of nonprofit performance. Leading commentators applauded the move even while some noted that charity ratings organizations, like...