| Nonprofit Issues

New PA Attorney General Settles with Hershey Trust Trustees

Trustees absolved of breach of fiduciary duty claims but agree to changes in practice for future

Court Approves Indemnification For Trustees of Private Foundation

Directors may be protected despite having started suit that prompted counter charges of breach of duties

Jury Finds Officers and Directors Liable for $5.75 Million in Damages

Court upholds verdicts for breach of fiduciary duty in bankruptcy case involving “deepening insolvency”

Ready Reference

IRS Tea Party “Scandal” Shows Need for (c)(4) Definition

Evidence shows workers struggling to define limits, not Administration effort to target political foes

May former director sue for back wages?

May a former board member of a 501(c)(3) ministry who has been removed from the board sue the ministry for nine years of back wages for their service and for the hours of involvement and contribution of services they gave?

Sign-up for our free weekly Q&A

Lessons from Litigation

Religious group fails to prove $18 million oral pledge

Health cost sharing program is not insurance

Tax Matters

Appraisals of apartments not enough for deduction

Employment Law

Is “volunteer” covered by workers’ comp?

April 16-May 15, 2013

Lead Stories

Court Says Volunteer Protection Act Doesn’t Protect from Federal Law Claims

Since Act specifically preempts state laws governing liability, Court says it does not protect against claims under federal laws

Contributor to Trust May Sue To Remove Trustees From Office

Donor-tenant may also sue historic property foundation for racial discrimination under Sections 1981 and 1982

Sandusky Not Entitled to Insurance To Defend Sex Abuse Claims

Court leaves open whether provision of defense costs for such claims would be against public policy

Risk and Reward

Dangerous Risk Management Myths and Untruths

Ready Reference

Is IRS Caving In On Standard For Political Activity by (c)(4) Groups?

Issue Notes

To the Point

Can alumni receive endorsement?

One of the alumni of our 501(c)(3) leadership development organization is running for public office and has asked for our support. Two directors have recommended that we share the alumni contact info with the aspiring politician. I'm concerned that we could quickly and easily get in trouble and could be seen as partisan. How can we be supportive of our alumni and avoid legal and perceptual complications?

Sign-up for our free weekly Q&A

Lessons from Litigation

Fund attorney can’t represent minority shareholders without consent

Tax Matters

Founder can’t deduct gifts to her own charity

Employment Law

Teacher’s aide fired for Facebook post

May 16-June 15, 2013

Lead Stories

Attorney General May Sue Club President for Breach of Duty

Trial court rejects motion to dismiss despite pending case by club against officer

Estate Can’t Pay To Fix Damage On Property It Does Not Own

Hospital administrator has no authority to agree to deplete remainder amount available to separate fund

Private Club Not Subject To ADA Claim by Member

Act applies only to public accommodations and club is not open to the public

Ready Reference

Revised Uniform Unincorporated Nonprofit Association Act Provides Clarification for Rules of Conduct

Members are protected from individual liability for obligations of the association

Issue Notes

To the Point

Can raffle ticket sellers be held accountable?

We have a nonprofit children’s youth program that holds a mandatory fundraiser every year. This year we tried a raffle. About one-third of our participants did not return the tickets and/or monies raised. Can we hold them responsible for the monies not returned? I feel we should at least be able to hold them responsible for returning unsold tickets so that we know they did not just pocket the money and tell the people that their ticket wasn't picked.

Sign-up for our free weekly Q&A

Lessons from Litigation

Court dismisses some, not all, claims in sex abuse case

Tax Matters

Court denies bargain-sale deduction

Court remands YMCA claim for real estate exemption

Employment Law

Court allows lesbian to sue for sex discrimination

Woman’s claim for autism discrimination dismissed

My wife misappropriated funds. Will she face charges?

Sign-up for our free weekly Q&A

How can I assure my tenure as Executive Director?

Sign-up for our free weekly Q&A

June 16-July 15, 2013

Lead Stories

League Treasurer Gets 5 Years For Misusing Funds for His Own Business

Juror’s concern for “really good person” is not basis to overturn unanimous verdict

Expelled Member of Association Can’t Plead “Freeze-Out” or Retaliation

Former commander of Order of Purple Heart also loses on fiduciary duty, effort to disqualify counsel

Bankruptcy Court Discharges Church Officer on Mortgage Guarantee

Discharge denied for willful and malicious failure to return assets to Synod taking control of church

Ready Reference

Foundations May Be Source of Venture Capital

Their little-used power to make program related investments offers opportunity for creative financing of projects

Issue Notes

To the Point

What's a reasonable time period for distributing funds?

When our 501(c)(3) organization raises funds and tells the public that we are going to donate to a specific cause, how long do we have to submit the funds to that charity? I am concerned by the length of time it takes when we are told that the Board has not decided how much more to contribute to that cause. I feel at least the amount raised should be turned over after the fundraiser within a reasonable time period.

Sign-up for our free weekly Q&A

Lessons from Litigation

Insurers have no duty to defend Jesuits in sex abuse case

Pastor’s contract extension does not violate bylaws

A Court of Appeals in Indiana has reversed a trial court decision that ordered a church to hold a general membership meeting to consider a contract extension for its pastor. The bylaws of the Mt. Olive Missionary Baptist Church provided procedures for se

Tax Matters

Bar Association retirement fund does not qualify as business league

Art center denied exemption because it operated “for profit”

Employment Law

Firing for husband’s role on competitor’s board would be discrimination based on marital status

Teacher may pursue claim that he was fired for reporting sexual abuse

July 16 - September 30, 2013

Lead Stories

Booster Club Loses Exemption Because of Fundraising Program

City Loses Right To Appoint Hospital Board

Hospital amended bylaws to eliminate City Council’s right to name directors

Directors Accused of Personal Benefit May Not Be ‘Independent’ to Decide on Suit

Court questions role of accused directors in deciding whether derivative action should proceed

Ready Reference Page No. 2

IRS Requires Substantiation of Contributions

Donors must obtain acknowledgment from charity for gifts worth $250 or more, must file Form 8283 for gifts of property over $500, with appraisal over $5,000

Issue notes

To the Point

Buying volunteer hours?

Our 501(c)(3) booster club board decided to institute a new volunteer policy this year. All parents automatically become members of the club if their child is in the sport (gymnastics). There are required volunteer hours and failure to meet the hours equals a fine of $25/half hour. Parents can buy out of the volunteer hours by paying $500 up front. Does this policy violate the club's 501(c)(3) status? Does the penalty money received by the club constitute taxable income for the club?

Sign-up for our free weekly Q&A

Lessons from Litigation

Court refuses to pierce corporate veil of hospital and foundation

Officer/director entitled to indemnification from foundation

Tax Matters

Court reduces deduction for clothes and housewares

Court finds conservation easement has no value

Employment Law

Nonprofit food distributor may be subject to FLSA

No worker’s comp for employee injured at charity Bowl-A-Thon

Will no-interest loans provide excess benefits?

Sign-up for our free weekly Q&A

Is it a conflict of interest to serve on two boards?

Sign-up for our free weekly Q&A

October 1, 2013-November 30, 2013

Lead Stories

Court Orders Charity To Return Contribution

Shelter “unilaterally decided” not to honor conditions placed on gift by donors

Bankruptcy Trustee Can’t Recover Gift to Church As Conduit for Charity

Church was not considered “initial transferee” when funds were specifically earmarked for third party

Nonprofit’s Documents Sent to Official May Be Public Records Subject To Disclosure

Where Cabinet member serves on University board ex officio, Court says nonprofit’s communications are records of Department

Ready Reference Page No. 1

Charities Must Set Value on ‘Quid Pro Quo’ Gifts

Donors may deduct only the amount of the payment in excess of the value of the goods or services received

Issue Notes

To the Point

How does group break away from controlling entity?

Our very small senior club is sponsored by the local recreation council, but recently we have discussed separating to be a stand-alone club. They have told us that if we do we will not get our money back and will have to leave all of our supplies with them. The council deducts over $600 dollars a year for head tax from our account, which is the major reason we want to leave. Can they legally take our money and supplies, and keep the name of our club?

You are here

Pages

Sign-up for our weekly Q&A; get a free report on electioneering