Nonprofit organizations have to attract quality employees just like other businesses. This is often hard to do with just a compelling mission. Attracting the best requires offering attractive salaries and benefit plans. But when is it too much? Congress holds that a salary package must be “reasonable.” Compensation is presumed to be reasonable if the …
Posts Categorized: News
Political Activity Policies are Critical for Nonprofits
Do your nonprofit’s employees or volunteers tweet, post, blog, Facebook, or just yell in the streets about their political preferences? If the answer is yes or you’re not sure, your organization may need to take steps to protect its tax-exempt status. 501(c)(3) organizations are “absolutely prohibited” from engaging, either directly or indirectly, in political activity. …
Newsletter – Avoid Fiscal Sponsorship Risks
Does your organization act as a fiscal sponsor? Do you use, or have you considered using, a fiscal sponsor for your program? Then you should take note of the rude awakening experienced by the fiscal sponsor world last month. As reported in the Los Angeles Times and Nonprofit Quarterly, International Humanities Center allegedly misused, diverted …
Can Nonprofits Have Shareholders?
Nonprofit organizations have to pass the organizational and operational tests to be recognized as tax-exempt by the IRS. Due to the requirements of the organizational test, most nonprofit organizations are formed as non-stock nonprofit corporations. This is because boards of directors of corporations with stock are required to maximize shareholder return instead of focusing on …
Charity and its Former Leader Face Punishment for OFAC Violation
We warned you to check with the Treasury Department before making grants to foreign organizations, so as not to violate the Office of Foreign Assets Control (“OFAC”). Here is an example of why nonprofits need to know those rules. Recently, Mehrdad Yasrebi, a former leader of the Child Foundation was found guilty of illegally funneling …
Ethiopian Laws Stifle Human Rights Efforts
When working in foreign countries, it’s not just US laws that charities have to follow, they also must be cognizant of local laws. Human-rights organizations working in Ethiopia just learned that the hard way. Ethiopia banned charities from working on human-rights issues in the country if they received more than 10% of their funding from …