The nonprofit law podcast highlights legal issues facing nonprofits. Hosted by Tim Mooney, an attorney with over a decade of experience in nonprofit law, this entertaining and informative program helps staff, officers and directors of nonprofits to understand the laws that impact their organizations.
On February 20th, the IRS released T.A.M. 200908050
Arguably a stricter stance at affiliated 501(c)(3)-501(c)(4) entities sharing websites when the 501(c)(4) is engaged in political activity that is prohibited for 501(c)(3)s.
What we’ve always thought
Caveat – the IRS rarely gives a lot of spot-on advice, so “what we’ve always thought” is based on educated conjecture based on existing precedent
501(c)(3)s and affiliated 501(c)(4)s can share the same website so long as corporate formalities were followed.
The (c)(4) can be on the (c)(3)’s website, but there had to be some kind of way for the (c)(4) to reimburse the (c)(3) for using that space.
The (c)(4) also had to be the entity making the communications as well.
The IRS in this T.A.M.
The entities involved here had the (c)(4) reimbursing the (c)(3) for the space, but the (c)(3)’s logo and copyright information were splashed all over the (c)(4) page content.
That was a compelling factor for the IRS… more compelling than which entity paid for the communications that endorsed candidates and included non-(c)(3) allowable candidate questionnaires.
Where does this leave us?
It does not appear that the IRS is closing to door to shared sites, but it is clear that details matter beyond which group cuts the check for which content.
The safest thing would be separate websites altogether – and these days, it’s certainly less of a cost issue to maintain 2 domain names and 2 design schemes than in year’s past.
I suspect, although it’s not 100% clear from the T.A.M., that the (c)(3) and (c)(4) could share a domain hosting package so long as they split the costs, and maintain separate websites with separate communications.
Linking between the two should still be acceptable under earlier law, but it cannot rise to the level of campaign intervention, so the links are best left as, “we have an affiliated organization and you can read more about that work here.”
This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law.
This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law.
Your guide to the laws impacting nonprofits
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This is a re-presentation of 2007’s end of the year guide to recordkeeping – a timely reminder for all calendar fiscal year organizations!
What should we be doing at the end of a fiscal year? Listener question…
It’s big enough of a task to be mentioned alone: recordkeeping.
It’s the law
It’s a good management tool
It can protect you against false accusations by others that would like to make your organization’s existence more difficult
Corporate record book
Make one if you don’t have it… a binder with all of your important docs
IRS determination letter, articles of Incorporation, bylaws, and minutes of board meetings
This should be permanently kept and updated when necessary
Remember some of these documents must be made publicly available, so this is an important one
Lobbying and other reporting information
Keep track of hours of lobbying as a 501(c)(3)
Keep track of amount of partisan activity as a 501(c)(4)
You’ll need this for your 990 in the spring
Financial records
Bank statements, old Form 990s, internal reports by treasurers, etc.
Keep these for at least seven years (law requires 3 for some, like the 990s)
Make sure you are keeping up with donor receipts for end of the year appeals!
Email me with questions and suggested topics
Screencast on using the Internet, podcasting and social networking for your nonprofit – go to nplawcast.com for details
Need more than a podcast? Tim-Mooney.com nplawcast.com
This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law.
Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com Email the show
What does the IRS have in store for nonprofits in 2009?
“a lengthy examination of how tax-exempt groups raise and spend money compared to how much they spend to achieve charitable goals.”
“Nonprofit student-loan groups also will be under greater scrutiny from the IRS next year, as the agency seeks to guard against abuses by organizations that are connected to for-profit businesses.”
“The IRS also will look at how nonprofit organizations and donors account for non-cash gifts, such as pharmaceuticals or used clothing, that are given to tax-exempt groups, which in-turn donate to a different nonprofit group.”
“The agency also plans to take a look at its own operations next year… consider governance issues that may be used in determining whether an organization qualifies as a charity.”
This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law.
Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com Email the show
When is a person acting on their own versus acting on behalf of their organization?
- Joining a nonprofit as a director or a staff member doesn’t take away your individual rights
- Individuals can do things that are otherwise forbidden… donate time/money to campaign, etc.
- General rule – so long as an organization’s financial resources, facilities, or staff are not used, the organization is not going to be beholden to the individual acts of its staff, officers or directors
When do the actions become attributed to an organization? - Principles of agency are used… if the person acts as if they have power, and they actually do have the power, the IRS will usually consider the action that of the organization - Actions of individuals that weren’t ok’d by the group, but were later “implicitly ratified.” (i.e. Organization found out about the actions and did not disavow them)
Tips & Best practices
- Have a policy in place on use of organizational resources
- Encourage use of disclaimers for individuals working on non-organizational endeavors (i.e. “organization shown for identification purposes only”)
Resources
Election Year Issues (pp. 363-365) – IRS CPE Text
Election Year Activities for Section 501(c)(3) Organizations: Frequently Asked Questions – McDermott Will & Emery Closing
This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law.
Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com Email the show
Check out the new website
New adds include a searchable database of all shows. If any links are a mess, drop me a line.
Change comes to DC – What are the plans for nonprofits?
Resources – look for something akin to the bailouts in the for profit sector, although the focus will be in the form of a newly formed Social Investment Fund Network – federal seed money leverages private sector funding
Tax law changes – any tax increases on higher income Americans could (possibly… depending on whom you ask) enhance the incentives to make charitable donations
Scrutiny – Sen. Charles Grassley (R-IA) and Sen. Max Baucus (D-MT) of the Senate Finance Committee have been poking around the nonprofit sector for years. Sen. Grassley in particular has been the most interested in creating additional regulatory hoops for nonprofits to jump through.
Closing Email me with questions and suggested topics
Sign up for the free NLP newsletter… every week get an early look at the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com nplawcast.com
This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law
Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com Email the show
Check out the new website
We had a meltdown in the website code, so I made lemonade from lemons and moved everything over to a new system that should be more stable. New adds include a searchable database of all shows. If any links are a mess, drop me a line.
Fall and winter means donation time (we hope!)
federal tax law requires charities to provide receipts to donors so that that may take advantage of their generosity
IRS – true to form, does not give us any particular formatting on what charities need to provide, but they’re more than happy to create problems for charities that fail to provide them
The amount of money or a description of the item donated
A statement indicating whether or not any goods or services were provided in return for the gift; receipts from religious organizations must include a statement indicating that “intangible religious benefits” were provided but they have no monetary value for tax purposes
A good-faith estimate of the value of goods or services provided; insubstantial values need not be recorded
Email is totally acceptable – everyone thank the IRS for joining the Internet revolution!
Want to check out what our neighbors north of the border are like on this? Take a look at the Sens Foundation’s admonition not to ask for a receipt unless you really, really need one… I’ve never seen anything like that before!
Closing Email me with questions and suggested topics
Sign up for the free NLP newsletter… every week get an early look at the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com nplawcast.com
This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law
Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com Email the show
Election season brings out the advocacy issues for nonprofits
- Some churches are about to get in a heap of trouble… Alliance Defense Fund is trying to take on the IRS and the tax prohibition on electioneering. It’s probably going to cost some churches, but more importantly the hubris will impact the church goers
The First Amedment is alive and well, but it doesn’t simultaneously create the right to tax deductibility of donations. That’s a privilege.
- Campaign finance laws were thankfully overturned, and here’s why… In 2000, Congress passed McCain-Feingold, or BCRA – it contained a well-intentioned but overbroad provision that essentially banned any broadcast advertisement that mentioned anyone running for federal office within 60 days of the November elections.
The Supreme Court overturned it because it banned all ads in those windows, including ones that are purely within free speech categories – like lobbying
When I lobbied supporters and authors of this law, I was constantly asked what kind of things could possibly come up within 60 days of an election that nonprofits and other corporations would want to weigh in on?
Well… we all just experienced it – the rescue bill was firmly within the 60 day window and without the wisdom of the Court (a phrase I do not often use) an election law would have stopped organizations from weighing in on the bill via broadcast ads.
Even supporters of BCRA were uncomfortable on this point… Resources
Election Law Blog on the BCRA 60 day windows Action Urged Against Politicking Pastors – The Chronicle of Philanthropy
Closing Email me with questions and suggested topics
Sign up for the free NLP newsletter… every week get an early look at the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com nplawcast.com
This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law
Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com Email the show
Commensurate in Scope ruling
A recent private letter ruling, the IRS applied a somewhat controversial standard to reject exempt status to an organization that was a faith-based organization that also was creating tax-friendly financial plans for it’s constituency.
Remember, that it is totally feasible for a charity to engage in business activities and engage in business activities, however there are limitations out there (UBIT, etc.)
But also remember that charitable organizations must be”exclusively” formed for charitable activities
The commensurate in scope standard is that you have to have sufficiently large enough charitable programming relative in size to the financial resources of the organization.
The organization in the PLR was only spending 1% (according to the IRS) on charitable activity, so this was an easy one from their perspective
However, where does one draw the line? And how do you handle organizations such as The Nature Conservancy that have literally billions of dollars locked into land? Are they less allowed now to engage in business activities?
This goes hand in hand with my call last episode for an (admittedly semi-overstated) Apollo Project on nonprofit regulation. We need more clarity and less ambiguity coming from the IRS
Closing Email me with questions and suggested topics
Sign up for the free NLP newsletter… every week get the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com nplawcast.com
This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law
Tim Mooney… Welcome to the Nonprofit Law Podcast
Your guide to the laws impacting nonprofits.
Shownotes…. nplawcast.com Email the show
News & Notes - What’s the IRS up to this year? According to its 2008 guidelines (PDF), the IRS is going to be focusing on (1) the redesign of Form 990, and (2) efforts to reign in abusive donation transactions particularly over-valuation of non-cash contributions. More at Guidestar.org.
- Nonprofits and Elections: Balancing Personal Versus Organizational Activity on-demand video screencast is available now as special preview for newsletter subscribers and will be available February 10th for the rest of the listenership. More on newsletter signup at the end of the show. Can a candidate use our space?
- 501(c)(4)s, etc.
- Yes, and you can limit it in a partisan way
- If limited in a partisan manner, this will count toward your limits on partisan activity under tax law
- Use must be incidental (about an hour per week or 4 hours per month) or it might be considered a contribution unless candidate reimburses (federal candidates – state law varies widely)
- 501(c)(3)s
- Must be strictly nonpartisan (nonpartisan debates, etc.) OR
- The use is part of a community offering (church rec room or community room) that is regularly made available for noncommercial purposes, without regard to political affiliation
- You can charge fees Resources FEC: Citizens’ Guide
IRS: CPE Guide, Election Year Issues (PDF – p383)
Closing Email me with questions and suggested topics
Sign up for the free NLP newsletter… every week get the shownotes and resources sent to you by email, plus get additional free content on the laws impacting nonprofits. Go to nplawcast.com/newsletter for more info and to sign up.
Need more than the podcast? Tim-Mooney.com and Beyond the Podcast at nplawcast.com nplawcast.com
This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law.