I recently received a media kit from nonprofit management professional/consultant/author Ron Mattocks for his book Zone of Insolvency: How Nonprofits Avoid Hidden Liabilities and Build Financial Strength. Such a timely topic. According to Mattocks, even before the events of the past several weeks, "500,000 nonprofits operate in the zone...
IRA Charitable Rollover Extended
With the enactment of the Emergency Economic Stabilization Act of 2008 (commonly referred to as the "bailout") on October 3, 2008, the IRA Charitable Rollover has been extended retroactively to cover distributions made in 2008 and 2009. See my earlier post on the IRA Charitable Rollover here. See Independent...
Dissolution – Part Two (California)
The California Attorney General’s Publication CT–603 (12/06) – "General Guide for Dissolving A California Nonprofit Corporation" – outlines the basic process required by a California nonprofit corporation after its board of directors or its membership votes to cease operations but before any remaining assets are distributed: A vote by...
Dissolution
The well-known saying, “Honesty is the best policy,” rings especially true for nonprofit organizations and the topic of dissolution. Although a tough decision and perhaps one that many will want to avoid, it is important for organizations to (a) acknowledge in a candid and timely manner when they’ve reach...
Mergers and Due Diligence
While the idea of a merger can seem like a promising avenue for increased efficiency, increased fundraising, and the like, merging is a multi-step process with important legal implications. As Jerald A. Jacobs explains in his article, "All About Mergers of Nonprofit Organizations," every organization should consider the mechanics...
IRS Releases Notice on Charitable Contributions of Inventory
On October 3, 2008, the IRS released Notice 2008-90, announcing that the IRS and the Treasury Department are studying the computation of the deductible amount and adjustment to cost of goods sold for charitable contributions of inventory property that constitute qualified contributions as defined in § 170(e)(3)(A) of the...
33 Pastors Violate Ban on Electioneering
UPDATE: On September 28, 2008, 33 pastors from across the country endorsed candidates for political office, an activity which violates Section 501(c)(3) of the Internal Revenue Code and jeopardizes the tax-exempt status of their respective churches. This concerted effort was organized by the Alliance Defense Fund (ADF), a 501(c)(3)...
Senate Passes Tax Bill Extending Charitable Giving Incentives
On September 23, 20008, the Senate passed a tax bill which would extend the charitable IRA rollover and several others charitable giving incentives that terminated on December 31, 2007. The charitable giving provisions are just part of the $100 billion tax relief bill which would also spare 20 million...
Donor Advised Funds – An Uncertain Future
Donor advised funds enable people to claim a charitable tax deduction on donated cash, stock, and other assets to these special accounts offered primarily by financial companies and community foundations while also allowing them to recommend how, when, and to which charities their money should be distributed. Donor advised...
IRS Eliminates Advance Rulings Process
On September 8, 2008, the IRS issued new regulations that eliminate the public charity advance ruling process. IR-2008-102, “IRS Streamlines Application Process for New Tax-Exempt Organizations,” stated in part: The Internal Revenue Service and the Treasury Department today issued new regulations that do away with the so-called advance rulings...