Are sale-leaseback arrangements legal/ethical for nonprofits?
Where do I find what policies are required?
March 16-April 15, 2011
Lead Stories
Exec Without Insurance When State Challenges Pay
Court says policy exclusion of claims for wages, benefits, precludes coverage
State-Dissolved Church Not Liable For Note Executed in its Name
Court says new corporation with same name was not authorized to enter into transaction
Donor Has No Recourse When Advised Fund Dissipated
Despite finding of breach of duty, donor could not prove damages
Donors Denied Deduction For Gift to Advised Fund
Loans for son’s college tuition showed failure to give up control
Risk and Reward
To the Point
Is this restraining order dismissal allowed?
One of our directors filed for a personal temporary restraining order against a member of our nonprofit corporation. The case was dismissed because neither party ever appeared in court. Now the director who brought the suit wants our Directors & Officers Insurance to pay his personal legal obligations. Can that be allowed to happen?
Lessons from Litigation
Tax Matters
April 16-May 15, 2011
Lead Stories
Director Liable to Association For Breach of Fiduciary Duty
Director-manager charged unauthorized fees, used funds for personal benefit, falsified records
Attorney Must Deliver Files To Surviving Entity after Merger
Agreement and statute provide that all rights and property of merged corporation vest in surviving corporation
No "Professional” Standard of Care To Find Negligence on Bike Tour
Court says safety standards are not outside the common understanding of the jury
Ready Reference
IRS Issues Procedures To Recover Lost Exemption
Automatic revocation for failure to file returns catches 275,000 nonprofits, though many defunct
To the Point
Will this affect our ability to get (c)(3) classification?
Our Orchid Society provides education on orchid culture to our members and other clubs who request our service. We have applied for 501(c)(3) charitable and educational classification. We have an annual orchid show and plant sale as our only fund raising event. Our members sell plants and supplies at this function and provide us with 20% of the sale proceeds. I've been told that this is wrong and it appears that we are organized to benefit the members. Will this affect our ability to get (c)(3) classification?
Lessons from Litigation
Tax Matters
May 16-June 15, 2011
Lead Stories
Foundations’ Assets Not Available For Hospitals’ Creditors in Bankruptcy
Right to give to hospitals does not mean foundations are required to give to hospitals
Charter School Must Indemnify Sponsor and State in Suit by ACLU
Contract requires defense and hold harmless when school is sued for establishing Islamic religion
Church Retreat’s Release Precludes Suit by Guest
Court says language is clear and comprehensive and sufficient to protect vendor on premises
Nonprofit Law YOU Want to Know
We regularly feature answers to questions from readers in our “To the Point” column. The full list can be viewed on the site.
To the Point
Are financials required to be made public in a 501(c)(3)?
Our recreational softball league began with an election but since then the board has become secretive. Recently we have heard that they are using League funds for food and alcohol purchases, amended by-laws that we as members have never seen, appointed themselves for three-year terms and will be appointing two persons to fill vacancies. My questions are: 1. Are financials required to be made public in a 501(c)(3)? 2. Can they fix the board positions? 3. Can they appoint directors? 4. Can League funds be used for food and alcohol?
Lessons from Litigation
June 16 -July 15, 2011
Lead Stories
National Girl Scouts May Not Force Local Councils to Reorganize
Court of Appeals reverses trial court and applies Wisconsin franchise law to stop change
Donor Has Standing to Sue, But Loses Claim on Use of Gift
Gift agreement gives basis for suit, but Court says Seminary did not breach agreement
Attorney for Dissident Director Not Liable to Nonprofit for Malpractice
Director had no authority to hire on behalf of corporation, therefore there was no attorney-client relationship
Nonprofit Law YOU Want to Know
We regularly feature answers to questions from readers in our “To the Point” column. The full list can be viewed on the site.
To the Point
Is it legal to use 501(c)(3) tax ID for personal social interest?
The president of our 501(c)(3) organization has an interest in a social issue that has no part of our 501(c)(3). He insists that he can collect donations using our tax id number for his own social interest organization/movement. As CEO of our organization, I think that this is an illegal use of our status. He argues that it is legal as long as he gives some of the collected funds to the original 501(c)(3). Who is right?
Lessons from Litigation
Tax Matters
July 16-August 15, 2011
Lead Stories
Church May Force Termination Of Trust for its Sole Benefit
Bank loses effort to retain trusteeship and its annual trustee fees
PA Court Limits Standing To Sue Nonprofit Corporations
Blue Cross subscribers are not officers, directors, members or “others” able to contest breach of NPCL
Nonprofit Officers May be Tried For Misuse of Gifts, Election Fraud
Court refuses to dismiss counts of indictment against president and executive director of association
Ready Reference
Supporting Organizations Qualify As Public Charities
Pension Protection Act of 2006 imposed significant new limitations on activities
To the Point
Can I stay on salary as PR & advocate?
I am the founder of a 501(c)(3) group home for individuals with autism, founded for my grandson who is autistic, and others like him. I decided to step down as executive director. I never paid myself more than $2,000/mo. I wanted to stay on salary as PR & advocate. The board says I cannot because of the new employment law. I'm Founder, was executive director & my grandson lives there. Is this correct? They now will not let me see financials, minutes or anything even though it is public information. I live on my Social Security & my husband's retirement & don't have enough money to live on.
Lessons from Litigation
Tax Matters
August 16-31, 2011
Lead Stories
Court Directs Use of Cy Pres To Change Terms of Charitable Gift
Individuals, nonprofit and state had all agreed to unravel impractical restrictions on donation
Social Security Benefits Don’t Count For Permitting Gifts in Bankruptcy
15% limit for charitable contributions is based on gross annual income without social security
Scout Leader Protected By Volunteer Protection Act
Court dismisses negligence claim against father of scout accused of sexual abuse
Ready Reference
Charity Fundraisers Raise Many Legal Issues
From preparation, through running the event, and reporting the results careful lawyering can reduce the risks of liability and embarrassment
To the Point
Commingling funds from a 501(c)(3) and 501(c)(7)
I am a board member of a 501(c)(3) charitable nonprofit wholly controlled by a 501(c)(7) tax-exempt social club. We are concerned about the issue of commingling funds. What are the key points for us to keep in mind?
Lessons from Litigation
September 1-15, 2011
Lead Stories
State May Require Disclosure Of Role of For-Profit Resellers
Reversing trial court, appeals court says notice tells donors that professional solicitors will sell goods
Member Has Right to Records, But Must Keep Some Confidential
Court restricts disclosure of some information, even from other members who have right to inspect
Nonprofit Law YOU Want to Know
We regularly feature answers to questions from readers in our “To the Point” column. The full list can be viewed on the site.
To the Point
Should board comment on annual proposals to amend bylaws
Our 501(c)(3) nonprofit corporation reviews its bylaws annually. Prior to the proposed changes going to the membership, they are reviewed by the board of directors. The board forwards all proposals to the membership with recommendations for or against. A rationale is always provided for the board’s recommendation. Recently a member told me that the board should forward all proposals without any recommendation. Is this true?
Lessons from Litigation
Employment Law
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