Foundations Avoid Excess Business Holdings
Private foundations may be subject to tax if they and their disqualified persons hold too much stock in a business functionally unrelated to the purpose of the foundation
Articles
Private Operating Foundations Are Hybrids
Organizations which are not publicly supported but use most of their assets and income in the active conduct of their charitable activities avoid some private foundation limitations.
Terminating Private Foundations May be Tricky
If foundations are going out of business, they may distribute their assets to certain public charities; if they want to continue, they might become publicly supported themselves
Calculating Public Support Percentage
Section 509(a) sets the rules for qualification as public charities; the rules are significantly different for 509(a)(1) and 509(a)(2)
Conversion Foundations Face Key Issues Early
The process of thinking through the preliminary questions is critical for obtaining legal and public approval and benefiting the community after the sale of charitable assets.
Donor Advised Funds Still Compare Well with Private Foundations
Pension Protection Act imposed new limitations but absolute control of foundations has costs and other limits
New “Core Form” 990 Presents Revised Look for Nonprofit Finances
Form Requires substantial additional disclosures Still retains numerous traps for the unwary
New Form 990 Will Greatly Expand Reporting Requirements for Nonprofits
It still offers an important public relations opportunity, but many Boards will have to adopt new policies to look good
Small Nonprofits Must File E-Postcard to Retain Exemption
IRS issues Regs for new requirements; groups with revenue up to $50,000 may file Form 990-N
IRS Provides Interim Guidance On Pension Act Provisions
Standards given for foundation grants to SOs, applicability dates, disaster relief funds, and scholarships
New Form 990 Offers Greater Chance To Promote Program Accomplishments
Charities would do well to review tax return from the point of view of prospective donors before filing
IRS Explains Common Mistakes on Form 990
As returns become instantly available online, more standardized and reliable data will help the public compare organizations to see if contributions are being used effectively
Form 990 Offers a Public Relations Opportunity
Charities can utilize tax return to showcase programs and avoid embarrassment if they take the reader’s perspective
Tax Exempts Must Provide Applications, Returns
Public has right to same-day access upon request at office; organizations may satisfy obligation by placing information on the Internet
Top Ten Policies and Practices for Nonprofit Organizations
Increased emphasis on transparency and accountability requires more formal attention to governance and administration
Indictment Spells Out Claims of Benefit, Obstruction of Justice by State Senator
Grants outside service area, improper political activity, and misinformation to accountants are basis for criminal charges
The Key Question: Whose Organization Is It?
Nonprofits come in many different shapes and sizes; they will be more effective if their governing instruments reflect the constituencies which must be represented to make them work
Directors Often Fear Risks of Personal Liability
Board members face potential liability for their own actions in causing injury to others, or in breaching a fiduciary duty to the organization.
Boards Should Assess Their Own Performance
Assessment can help improve board performance and transition ineffective members; the important thing is not worrying about doing it perfectly, but just doing it
Conflict of Interest Policies Help Avoid Problems
In addition to protecting against embarrassment and loss of contributions, policies can provide protection against possible excess benefits tax violations