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 …
Posts Tagged: non-profits
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 …
Conflict Over Social Welfare Organizations Erupts
Each presidential election year the IRS increases its vigilance over halting campaign activity by nonprofits. This presidential year has already proven to be more exciting than most on this front. The New York Times recently reported that conflict has erupted as Democratic lawmakers call for the IRS to crack down on nonprofit political groups while …
Online Marketing Must Match Nonprofit Mission
Be careful what your nonprofit puts on its website or on social networking sites like Facebook. When the IRS reviews an application for tax-exempt status, one thing the agents often check is whether an organization’s website or social networking site matches what the organization states on its application. Similarly, when the IRS audits an organization …
Small Charities Get Opportunity to Run Text Donation Campaigns
We recently posted about text message donations, reminding organizations that donor acknowledgments should be provided no matter how donations are received. Now an effort is underway that will make fundraising texting campaigns more accessible to small charities and safer for donors. Mobile-phone companies assisting nonprofit organizations with text message campaigns are concerned about fraud. This …