Who will lose most in these tumultuous times? Where will the money come from in the next several tumultuous years for nonprofit and nongovernmental organizations? One thing is clear: it will not be from banks, insurance companies, lending institutions, corporations, Chrysler, General Motors, Ford or investment firms.
Foundations are looking at what they are currently funding and how to maintain that level of funding. For some it means increasing their giving from the norm of 5% of investments to 6% annually simply to keep pace for their current grantees. They will attempt to honor their commitments but not necessarily add new grantees. For others it means lowering their grantees’ expectations.
Most if not all foundations have laid out a three to five year plan for funding. They are aware based on current data what they can expect to do in the next year or two with some certainty. I am going to find it very interesting - and probably very disappointing - to see how many foundations are open to new applications in 2009 and 2010 that I can list in the Grant Opportunities at CharityChannel.
Count on it: there will be greater competition for funds. Your organization and applications will have to be quality AAA+. And your relationships with people who know funders will also have to be AAA+ rated. Your relationships will have to be quite powerful through the six degrees of separation.
Competition for state and Federal contracts will also see high competition. For-profit and nonprofit organizations will compete for those contract-type grants for services government does want to perform itself.
For many nonprofit and nongovernmental organizations it will mean reducing programs and services, closing offices, going out of business, merging, layoffs (Reduction in Force, Riffing, more on this in a future blog), salary freezes, loss of fringe benefits, changes in the way you do business, shifts in policies to meet the clients’ greatest needs and other innovative responses.
I think we can expect most foundations will not change their priorities for funding. On the other hand we may see an enormous need to provide emergency shelter, food and clothing for numbers of people far larger than now. Who will fund emergency shelters and food banks? What will be the pressures on local United Ways, community foundations, local trust funds and other local funders to meet basic human needs?
What are you planning for the next 1-3 years to provide your mission and vision? Where are you planning to be frugal? How wide are you opening the window of NPO/NGO secrecy and becoming more transparent and accountable? How are you prioritizing what you can and will do under your mission and with reduced funding? Most small and medium sized nonprofits should be looking at 10-20% reduction in 2009 and even more in 2010.
Is it realistic that your group will survive the next 1-3 years? If not, what should you be doing now to close down appropriately and help clients after you are gone?
The list below is my best guestimate of where there will be substantial reductions in funding.
New organizations – Generally funders want to fund groups after they have been in business for some 3-5 years. Most foundations and corporations do not say this at their web sites but it is a fact. All funding is built at a minimum on relationships, friends, local supporters, contacts, viable mission, vision and passion. Those things alone will not work unless there are proven accomplishments, partnering, mission-based social values, demonstrable and meaningful goals and objectives, demonstrable fiscal responsibility and integrity, leadership, transparency and sustainability over a certain period of time. Even with all that there will still be incredible competition so that many new organizations if not most will not receive grants in 2009-2010. The lone exception will be national or international start-ups by notable people, former governmental officials, the very wealthy, show business and sports personalities, although that does not necessarily equal quality and effectiveness. Before anyone starts a new nonprofit, you MUST assess what the realistic future will be in your written business and resource development plans.
The "Big" dictate the funding - One fear I possess is the impact of the "Big" contributors. Beware the "Bigs"! The "Big" foundations from Bill Gates, Bill Clinton, Warren Buffett, George Soros, Australian Iron-ore magnate Andrew "Twiggy" Forrest and other very wealthy leaders globally are growingly dictating the priorities for grant awards and giving. The more they control the greater percentage of grants, the greater their influence. It is not simply an issue they are funding the wrong issues. It is not about wrong issues. They are demonstrating what they believe to be the global needs and how they are to be met. They influence others by modeling where charitable gifts go and what they pay for. The more they influence and gain partnerships with other funders the narrower funding will be at international and national levels and ultimately local levels - the new trickle down theory. Pet projects in their "home towns" and the "home towns' of their supporters will reduce local funding in other communities. The "Bigs" are also setting the tone by their local giving as to priorities. When Gates provides funding for certain programs in schools in Seattle, other local funders may follow suit in their own communities. Foundations need to heed their own responsibilities and listen to their constituencies for the expenditure of ever reducing funds now and the next several years. Foundations and NPO/NGO organizations cannot turn lazy and let "Big" run the Third Sector.
Social welfare – This may be one group that will see the least amount of reduction in funding. The NPOs here may have to redefine their missions and take a hard look at what the priorities are. Expectations may grow that sliding fees for service are necessary in the future. They will have to look hard at collecting fees with greater force from third party funds such as health insurance, Medicare and Medicaid and individual or private pay where appropriate. Programs in family services, children and youth services, drug and alcohol, mental health, case management, outreach and others may also have to triage who their clients or customers will be in the future and prioritize what they can in fact accomplish.
Health care – More than others this may stay steady. Government funding for drug, alcohol, HIV/AIDS, mental health services may be reduced but probably not vanish. Funding for research may drop a little.
Advocacy- Although there is some movement by foundations to fund advocacy, it is small and late in the process. Government and corporations will not fund advocacy unless it meets their goals and they approve of the activities. Many nonprofits do not have a clear understanding what can and cannot be done in advocating, but their leaders should be studying it; you cannot apply for what you do not know. Certain affinity groups have been funded for advocacy such as women, gay, lesbian, bisexual, transgender, and people infected and affected by HIV/AIDS. The advocacy purse will, however, become smaller.
Community organizing – Without defining what we mean by “community organizing” this has received short shrift for decades. There are some progressive foundations that have been consistent in funding community organizing and advocacy but they are generally smaller foundations. Local foundations have shown leadership here and may continue at the local level but probably with less funds and narrower priorities.
International development – Governments and banking/lending institutions will reduce funding or eliminate it at this level for the foreseeable future. Governments may find openings for political gain funding some areas of the world. The new U.S. President and Congress will have to take some leadership here. The Clinton Foundation may suffer some reductions in ability because of the potential appointment of Hillary Clinton to the Obama Cabinet.
Animals – Whether the animals are horses, domestic cats and dogs, tigers, elephants and so on, funding will take a deep cut. Some governments may continue to fund certain endangered species. The search for oil, coal and natural gas, the expansion of corporations to find minerals, the deposit of atomic fuel will receive easier licensing or smaller penalties allowing a greater negative impact on creatures large and small. The work of dedicated volunteers will have to be enhanced in my view.
Art and culture – With few exceptions, art and culture funding will be reduced. Museums, classical orchestras, libraries are already reducing budgets for 2009-2010 substantially. Grants, membership dues, and other fundraising activities will be more difficult to secure. Fees for service will have to be considered.
Technical assistance – NPOs seeking technical assistance in terms of planning, management, board development, priority setting, succession planning, will not find willing funders unless they already are funded by a foundation that has provided this support over the years.
Training grants – The training of boards, staff and volunteers has been a low value for most NPOs unfortunately. Training for capacity building, best practices and other buzz word activities will not be seen as valuable for funders. If NPOs do not currently have funding for capacity building and best practices, there will not be funding to rescue them.
Technology grants – There have been periodic grants available from government and corporations for technology. Technology grants for nonprofit groups have generally been part of the budget request for foundations and other fundraising. There will be a sharp decline in interest to fund this element although many NPOs now put this at a high priority. It may be that those who delayed to take technology seriously have waited too long. If you snooze, you lose. Seeking donated equipment such as computers and telephone systems will have to be the method for the future but funds for compatible systems and training staff to use the equipment and to maintain the equipment will be hard to come by.
Environment – As more and more corporations and governments claim to be going “green”, the tendency could be a decreased support for other environmental activities. This could be one of those: Be careful what you ask for. As conservation apparently wins through societal, corporate and governmental activities and policies the less conservation may be seen as valuable to funders’ causes. Cultivating current supporters may be the necessary priority over the next 1-2 years for eco-nonprofits.
Education – This group receives the second largest funding after health. I see little change here. The reductions here will probably be from corporations.
Toast – So, are you headed to the toaster?
What are your thoughts on these issues?
Resources
GLOBAL: Tight belts, tough choices for charities from IRIN November 13, 2008
http://www.irinnews.org/Report.aspx?ReportId=81450
In a Successful Campaign: Lessons for Nonprofits by Paul Schmitz
http://www.nonprofitquarterly.org/content/view/717/1/
Fundraising in a Cold Climate, 6 October 2008, Prepared by: Dennis O’Connor and Deirdre Hatch
http://www.wheel.ie/user/content/download/4115/15290/file/Fundraising+in+a+Cold+Climate.pd
The Cohen Report: What the Financial Sector Meltdown Really Means for Nonprofits and Philanthropy
http://www.nonprofitquarterly.org/cohenreport/2008/09/23/what-the-financial-sector-meltdown-really-means-for-nonprofits-and-philanthropy/
Because Things in the Game Done Changed: Nonprofits Need Generation Y Leadership in an Uncertain Economy Posted on October 27, 2008 at Nonprofit Congress by Rosetta Thurman http://nonprofitcongress.wordpress.com/2008/10/27/because-things-in-the-game-done-changed-nonprofits-need-generation-y-leadership-in-an-uncertain-economy/
Past Economic Downturns and the Outlook for Foundation Giving - http://foundationcenter.org/gainknowledge/research/econ_outlook.html
Foundation Giving Priorities Remain Consistent During Economic Slowdowns, New Foundation Center Research Advisory Shows - http://foundationcenter.org/media/news/pr_0811a.html
Aid charities are taken to task over their 'culture of secrecy' By David Ainsworth, Third Sector, 5 November 2008
http://www.thirdsector.co.uk/News/DailyBulletin/859293/Aid-charities-taken-task-culture-secrecy/521EC947D3D3415E225760BC1267261E/?DCMP=EMC-DailyBulletin
N.J. arts groups get ready for a 'bumpy financial ride' by Laurie Granieri, mycentraljersey.com, November 13, 2008.
http://www.mycentraljersey.com/article/20081113/NEWS/811130373
Survey: Nearly 40 Percent of Businesses Poised to Lay Off Workers - If economic conditions don’t improve soon, it appears that the majority of companies are set to begin implementing hiring freezes or laying off their workers. About three-quarters of human resources executives polled at several hundred companies said budget cuts across their entire organizations are likely. http://www.workforce.com/section/00/article/25/94/28.php
2006 Statistics Distribution of Foundation Grants by Subject Categories - http://foundationcenter.org/findfunders/statistics/pdf/04_fund_sub/2006/10_06.pdf
Australia’s Richest Man Plans to Give It Away - http://blogs.wsj.com/wealth/2008/08/06/australias-richest-man-plans-to-give-it-away/?mod=yahoo_hs
World's 25 most influential billionaires -
http://blog.360.yahoo.com/blog-8IYeqGcjd6fE_IznRWQnzKsngg--?cq=1&p=12
24 Factors In Developing an Exit Strategy for Nonprofit and Nongovernmental Organization (A Business Plan in Reverse) -
http://dongriesmannsnonprofitblog.blogspot.com/2008/10/24-factors-in-developing-exit-strategy.html
Nonprofit Incorporating - Business Plan - http://www.idealist.org/media/pdf/FAQ/080123NP_Biz_Plan.pdf
How Do We Find Local Support for Our Program? - http://www.idealist.org/npofaq/0/1574.html
Showing posts with label Elections. Show all posts
Showing posts with label Elections. Show all posts
Friday, November 21, 2008
Wednesday, November 12, 2008
U.S. Election Night 2008 - Flashes of My Life Came Before Me
Watching the U.S. election returns on Tuesday night, November 4, 2008, brought many flashes of memories and experiences into my frontal lobes from 76 years. They, whoever they are, say your life flashes before you before you die. Well, what I know is that night my life flashed before my eyes and I am alive. They are vignettes.
From my childhood In Pleasantville NJ in 1940 when I could visit a black friend in his house and he could visit me, but he was not allowed in our house; I did not understand why. I traveled with the Wildwood High School (NJ) basketball team and every year in certain communities we would have windows broken on the bus because we had black players.
In college I did sports broadcasting for the four years. We went to Annapolis MD to broadcast a game between Gettysburg College and the Naval Academy. The only black student in Gettysburg was with me. We were not allowed to eat anywhere in Maryland together so we did not eat.
In seminary a black friend from Pleasantville NJ and I worked on a model mission to South Philadelphia, poverty, racism, prostitution, unsafe housing, no employment but near the University of Pennsylvania. He was a friend of my childhood friend who was then a cop. The model served as the way I started a community center in Camden NJ about 5 years later. Both friends are now dead.
I was almost fired from my first clergy job in Grace Church Plainfield NJ in 1958. My boss was on vacation in Nova Scotia and I was left in charge. On one Sunday I preached on the question why there were two Episcopal Churches in the small community of Plainfield, one white, one black, and how can we begin to worship together. Before the service was over my boss was on the phone waiting for me. He asked what happened. I told him. He said yes that is basically what he heard. He said some of the leaders wanted him to fire me. He then told me he was not coming back over this issue and to preach about whatever God and I decided. So I did it again the next week. The ceiling never caved in.
On April Fool’s Day, 1959 I moved to Camden NJ to work in an inner city church. Camden: too many mountain top experiences, too many sadnesses to write here. I started the community center across the street from the church, a huge building, a half-block long, three stories high with a gymnasium, library and rooms everywhere. It became a center for children and youth and for inner city adults, my neighbors, working on community issues.
The flashes include being on the Civil Rights March in 1963 in Washington DC and listening to Dr. Martin Luther King preach. There must have been 50 speeches that day, but only one conquered us. I heard an earlier version of the speech that he gave in Detroit, but he was under the spirit that bright sunny day in Washington DC and it became a hymn. He gave us all a dream. We knew we could realize it. But as decades past the dream stayed a dream.
JFK's death. King's death. Bobby Kennedy's death. Each was a different experience. When JFK was shot I was driving a parishioner for her brother to enter a rehab center in Princeton. When we arrived no one was in the reception room. That is when we three learned of it.
Martin and Bobby's deaths I was in Camden and I opened the church for anyone to use. We had an impromptu service for each and the church was almost filled both days by folks who did not go to our church. The neighborhood mourned there those two days, however. We did together. Many civil rights marches. The Camden riot. Speaking before Senate and House committees about Camden and urban renewal. Blocking I-76 from coming into Camden until there were protections for a public housing complex and competent relocation of families throughout the region, not just in the inner city.
Changing dim light bulbs in tenements from 25 watts to 100 watts. We did it because it made sense. The hallways were dark, the stairs dangerous, the tenants black and Hispanic families. If the landlord removed them we replaced them.
The church was all white, suburbanites coming back to the old neighborhood, when I started work there. The church was a white spiritual doughnut hole in a black and Hispanic poverty community. After I started the community center with their help in 1960, we saw black and Hispanic people begin to come to church. Then regularly. I started a new custom of greeting each other with a fold of the hands over the others in the form of a cross. White, black, Hispanic touched each other. I held a jazz mass. Black jazz musicians.
Black power. A description of a people changed from Negro to black to African American in a flash it seems. I remember being trailed by Camden police wherever I went with black kids or adults in the car. I remember riding shotgun with a sheriff many nights. He was Arnold Cream, a hero of mine from high school. He was also known as Jersey Joe Walcott, former heavy weight champion of the world. We were friends in Camden.
I remember he and some federal employees worked with me to bring H. Rap Brown, later Jamil Abdullah Al-Amin, to the community center to speak. He was wanted for federal offenses at the time. Brown was sneaked into Camden and out by black law enforcement and federal officials. He was a leader of the militant black power group, the Black Panthers. And he was a hero in the black community. He is now in prison on a homicide conviction. He was a wonderful speaker.
Minister Malcolm X came to Camden in 1965. I heard him preach and he was phenomenal. I was one of a few white people there, escorted straight to the front of the convention hall by a Muslim Guard. He entered the stage to a standing and tumultuous greeting. He looked around the auditorium and then said, I hear there are some white people here today but I cannot see them for all the beautiful color. The place went over the top! I never felt fear or apprehension. I was with neighbors and friends, why should I? I also met him for a brief talk. Weeks later he was assassinated.
My oldest daughter was with me through most of these events. I was a single parent.
I remember meeting after meeting in our house with African American and Hispanic and white leaders talking about the present and the future of Camden through the 1960s - one eventually became governor of NJ; another became the first minority/Hispanic on the Federal Court in NJ. I learned so much at the feet of black women who wanted so much more for themselves, their children, their community, their country. At that time we were simply trying to get a minority on city council. We did, the brother of the future judge.
It was an exciting and vibrant and hopeful time. But president...? Not even in our vocabulary.
Now there are and will be children who will grow up thinking that having a black president is a norm.
I have been enriched for these and so many experiences as a clergyperson and a lawyer with legal services programs in low-income communities over 76 years. I looked back on election night and I rejoiced. I have seen history in the United States through a kaleidoscope, not simply in black and white.
My family participated at one level or another for Barack Obama. My wife, her family and I in New York, My oldest daughter, an attorney, in New Jersey. My middle daughter (who came home from Korea where she teaches) in North Carolina. My youngest daughter (where she is completing her masters in journalism) at the University of Oregon. My granddaughter (in her third year at Penn State before heading to study in Argentina) in Pennsylvania. All blue states this election.
The flashes of light from 76 years, but only a portion. Unto the second and third generations.
From my childhood In Pleasantville NJ in 1940 when I could visit a black friend in his house and he could visit me, but he was not allowed in our house; I did not understand why. I traveled with the Wildwood High School (NJ) basketball team and every year in certain communities we would have windows broken on the bus because we had black players.
In college I did sports broadcasting for the four years. We went to Annapolis MD to broadcast a game between Gettysburg College and the Naval Academy. The only black student in Gettysburg was with me. We were not allowed to eat anywhere in Maryland together so we did not eat.
In seminary a black friend from Pleasantville NJ and I worked on a model mission to South Philadelphia, poverty, racism, prostitution, unsafe housing, no employment but near the University of Pennsylvania. He was a friend of my childhood friend who was then a cop. The model served as the way I started a community center in Camden NJ about 5 years later. Both friends are now dead.
I was almost fired from my first clergy job in Grace Church Plainfield NJ in 1958. My boss was on vacation in Nova Scotia and I was left in charge. On one Sunday I preached on the question why there were two Episcopal Churches in the small community of Plainfield, one white, one black, and how can we begin to worship together. Before the service was over my boss was on the phone waiting for me. He asked what happened. I told him. He said yes that is basically what he heard. He said some of the leaders wanted him to fire me. He then told me he was not coming back over this issue and to preach about whatever God and I decided. So I did it again the next week. The ceiling never caved in.
On April Fool’s Day, 1959 I moved to Camden NJ to work in an inner city church. Camden: too many mountain top experiences, too many sadnesses to write here. I started the community center across the street from the church, a huge building, a half-block long, three stories high with a gymnasium, library and rooms everywhere. It became a center for children and youth and for inner city adults, my neighbors, working on community issues.
The flashes include being on the Civil Rights March in 1963 in Washington DC and listening to Dr. Martin Luther King preach. There must have been 50 speeches that day, but only one conquered us. I heard an earlier version of the speech that he gave in Detroit, but he was under the spirit that bright sunny day in Washington DC and it became a hymn. He gave us all a dream. We knew we could realize it. But as decades past the dream stayed a dream.
JFK's death. King's death. Bobby Kennedy's death. Each was a different experience. When JFK was shot I was driving a parishioner for her brother to enter a rehab center in Princeton. When we arrived no one was in the reception room. That is when we three learned of it.
Martin and Bobby's deaths I was in Camden and I opened the church for anyone to use. We had an impromptu service for each and the church was almost filled both days by folks who did not go to our church. The neighborhood mourned there those two days, however. We did together. Many civil rights marches. The Camden riot. Speaking before Senate and House committees about Camden and urban renewal. Blocking I-76 from coming into Camden until there were protections for a public housing complex and competent relocation of families throughout the region, not just in the inner city.
Changing dim light bulbs in tenements from 25 watts to 100 watts. We did it because it made sense. The hallways were dark, the stairs dangerous, the tenants black and Hispanic families. If the landlord removed them we replaced them.
The church was all white, suburbanites coming back to the old neighborhood, when I started work there. The church was a white spiritual doughnut hole in a black and Hispanic poverty community. After I started the community center with their help in 1960, we saw black and Hispanic people begin to come to church. Then regularly. I started a new custom of greeting each other with a fold of the hands over the others in the form of a cross. White, black, Hispanic touched each other. I held a jazz mass. Black jazz musicians.
Black power. A description of a people changed from Negro to black to African American in a flash it seems. I remember being trailed by Camden police wherever I went with black kids or adults in the car. I remember riding shotgun with a sheriff many nights. He was Arnold Cream, a hero of mine from high school. He was also known as Jersey Joe Walcott, former heavy weight champion of the world. We were friends in Camden.
I remember he and some federal employees worked with me to bring H. Rap Brown, later Jamil Abdullah Al-Amin, to the community center to speak. He was wanted for federal offenses at the time. Brown was sneaked into Camden and out by black law enforcement and federal officials. He was a leader of the militant black power group, the Black Panthers. And he was a hero in the black community. He is now in prison on a homicide conviction. He was a wonderful speaker.
Minister Malcolm X came to Camden in 1965. I heard him preach and he was phenomenal. I was one of a few white people there, escorted straight to the front of the convention hall by a Muslim Guard. He entered the stage to a standing and tumultuous greeting. He looked around the auditorium and then said, I hear there are some white people here today but I cannot see them for all the beautiful color. The place went over the top! I never felt fear or apprehension. I was with neighbors and friends, why should I? I also met him for a brief talk. Weeks later he was assassinated.
My oldest daughter was with me through most of these events. I was a single parent.
I remember meeting after meeting in our house with African American and Hispanic and white leaders talking about the present and the future of Camden through the 1960s - one eventually became governor of NJ; another became the first minority/Hispanic on the Federal Court in NJ. I learned so much at the feet of black women who wanted so much more for themselves, their children, their community, their country. At that time we were simply trying to get a minority on city council. We did, the brother of the future judge.
It was an exciting and vibrant and hopeful time. But president...? Not even in our vocabulary.
Now there are and will be children who will grow up thinking that having a black president is a norm.
I have been enriched for these and so many experiences as a clergyperson and a lawyer with legal services programs in low-income communities over 76 years. I looked back on election night and I rejoiced. I have seen history in the United States through a kaleidoscope, not simply in black and white.
My family participated at one level or another for Barack Obama. My wife, her family and I in New York, My oldest daughter, an attorney, in New Jersey. My middle daughter (who came home from Korea where she teaches) in North Carolina. My youngest daughter (where she is completing her masters in journalism) at the University of Oregon. My granddaughter (in her third year at Penn State before heading to study in Argentina) in Pennsylvania. All blue states this election.
The flashes of light from 76 years, but only a portion. Unto the second and third generations.
Thursday, November 6, 2008
Your Nonprofit Library Third Shelf – See What the IRS Demands of Your Tax Exempt Organization After it is Recognized as Tax Exempt
Here are the links for your nonprofit library to all the IRS forms, Publications and other material related to what you have to do after your organization is recognized by the IRS as tax exempt. Make a copy of all the publications and forms or mark them for easy access. Your local IRS office can secure copies for you without cost.
You will find here annual forms that must be filed, how to report contributions, issues over donations of motor vehicles, employment taxes, auctions, political lobbying, postal regulations and other resources. This completes the third shelf.
The single most change for reporting is the new Form 990. You should know this cold. Now!
Annual Filing to the IRS on Forms 990
Independent Sector’s article Revised Form 990, Accountability and Oversight - http://www.independentsector.org/programs/gr/draft_form_990.htm
Instructions for the New 2008 990s - http://www.irs.gov/irs/article/0,,id=186015,00.html
Forms 990 or 990-EZ and Schedules A and B – http://www.irs.gov/pub/irs-pdf/f990.pdf
990-EZ - http://www.irs.gov/pub/irs-pdf/f990ez.pdf
Instructions for Schedule A - http://www.irs.gov/instructions/i990sa/ch01.html
Instructions for Form 990 and Form 990-EZ (2007) –
http://www.irs.gov/instructions/i990-ez/index.html
e-Filing for Charities and Nonprofits, Form 990 (Return of Organization Exempt from Income Tax), Form 990-EZ (Short Return of Organization Exempt from Income Tax) and Form 990-PF (Return of Private Foundation) -
http://www.irs.gov/efile/article/0,,id=108211,00.html
E- Postcard Form 990-N New Annual Electronic Filing Requirement for Small Tax Exempt Organizations - http://www.irs.gov/charities/article/0,,id=169250,00.html
E-Postcard: Questions and Answers - http://www.irs.gov/charities/article/0,,id=173864,00.html
Pension Protection Act of 2006 Revises Exempt Organizations Tax Rules - http://www.irs.gov/charities/article/0,,id=161145,00.html
IRS Complaint Process For Tax Exempt Organizations - http://www.irs.gov/irs/article/0,,id=178241,00.html
Contributions from Taxpayers to Tax Exempt Organizations
IRS Publication 1771, Charitable Contributions - Substantiation and Disclosure Requirements – http://www.irs.gov/charities/article/0,,id=96102,00.html and http://www.irs.gov/pub/irs-pdf/p1771.pdf
Publication 526 is information for the taxpayer who makes charitable contributions - http://www.irs.gov/publications/p526/index.html
Motor Vehicles and Other Donations to a Tax Exempt Organization
New Publications Focus on Car Donations - http://www.irs.gov/newsroom/article/0,,id=124421,00.html
Form 4302, A Charity’s Guide to Motor Vehicle Donations –
http://www.irs.gov/pub/irs-tege/pub4302.pdf
Form 4303, A Donor’s Guide to Motor Vehicle Donations –
http://www.irs.gov/pub/irs-pdf/p4303.pdf
IRS Rules About Making a Motor Vehicle Donation - http://www.irs.gov/newsroom/article/0,,id=131660,00.html
Internal Revenue Bulletin 2007 – 40, Information Reporting by Organizations That Receive Charitable Contributions of Certain Motor Vehicles, Boats, and Airplanes - http://www.irs.gov/irb/2007-40_IRB/ar09.html
Exempt Organizations Abusive Tax Avoidance Transactions - http://www.irs.gov/charities/article/0,,id=128722,00.html
IRS Testimony: Charitable Giving Problems and Best Practices - http://www.irs.gov/newsroom/article/0,,id=124186,00.html
Independent Sector’s Comments about car donations - http://www.independentsector.org/programs/gr/vehicledonations.htm
Gaming
In addition to any state laws, see the material published by the IRS, Gaming Publication for Tax Exempt Organizations -
http://www.irs.gov/pub/irs-pdf/p3079.pdf
Topic 419 - Gambling Income and Expenses
http://www.irs.gov/taxtopics/tc419.html
Instructions for Form 990 and 990-EZ (2007)
http://www.irs.gov/instructions/i990-ez/ix01.html
Employment Taxes and Other Employer Instructions for Tax Exempt Organizations
Links to IRS articles concerning Employment Taxes for Exempt Organizations - http://www.irs.gov/charities/article/0,,id=128716,00.html
2008 Form 15, Circular E Employer's Tax Guide (revised annually) - http://www.irs.gov/pub/irs-pdf/p15.pdf
2008 Form 15–A Employer's Supplemental Tax Guide (revised annually) - http://www.irs.gov/pub/irs-pdf/p15a.pdf
2008 Form 15-B Employer's Supplemental Tax Guide on the employment tax treatment of fringe benefits - http://www.irs.gov/pub/irs-pdf/p15b.pdf
2008 Form 941 Employer’s Quarterly Federal Tax Return 941 Form (Rev. January 2008) - http://www.irs.gov/pub/irs-pdf/f941.pdf
2008 Instructions for Form 941 - http://www.irs.gov/pub/irs-pdf/i941.pdf
Publication 78, Cumulative List of Tax Exempt Organizations described in Section 170(c) of the Internal Revenue Code of 1986, a search for charities - http://www.irs.gov/charities/article/0,,id=96136,00.html
2008 Publication 509 (changes annually), Tax Calendars for 2008 - http://www.irs.gov/publications/p509/index.html
Publication 598 - Form to Declare Unrelated Business Income of a Tax Exempt Organization (NOTE: Tax Exempt organizations should be very aware of this Publication and its implications for Exempt status)- http://www.irs.gov/pub/irs-pdf/p598.pdf
Disclosure of Unrelated Business Income Tax Returns - The IRS has provided interim guidance (Notice 2007-45) on the requirement for 501(c)(3) organizations to make available for public inspection a copy of their unrelated business income tax (UBIT) returns (Form 990-T). The disclosure procedures are generally the same as those required for disclosure of an organization's Form 990. Some organizations not subject to other public disclosure requirements, such as churches, are required to disclose a Form 990-T; see Publication 598 immediately above - http://www.irs.gov/irb/2007-22_IRB/ar12.html
Intermediate Sanctions, Excise Tax on Excess Benefit Transactions (NOTE: Tax Exempt organizations should be very aware of this Publication and its implications for Exempt status. The purpose of this is to impose sanctions on the influential persons in charities and social welfare organizations who receive excessive economic benefits from the organization, rather than to punish the exempt organization itself.) - http://www.irs.gov/charities/charitable/article/0,,id=123298,00.html and http://www.irs.gov/pub/irs-tege/eotopice03.pdf
Political Activity and Lobbying
IRS Reminds Charities and Churches of Political Activity Ban - http://www.irs.gov/charities/charitable/article/0,,id=175825,00.html
Political Activities - Particularly important given the election season, the IRS released a revenue ruling (Rev. Rul. 2007-41) regarding what political activities are prohibited for tax-exempt organizations. To illustrate, the revenue ruling describes 21 situations and discusses which are permissible and which are not. http://www.irs.gov/irb/2007-25_IRB/ar09.html
Political Activities Compliance Initiative (2008 Election) http://www.irs.gov/charities/charitable/article/0,,id=181565,00.html
On February 3, 2009 the Chronicle of Philanthropy reported on an IRS vs Church-audit case involving alleged lobbying and candidate support. The article says in part:
Court Rules Against IRS in Church-Audit Case, By Grant Williams
The Internal Revenue Service has suffered another setback in its effort to pursue an audit of a church in Minnesota in a case that has ramifications for the tax agency and churches nationwide.
A U.S. District Court judge in Minneapolis ruled that the Living Word Christian Center, in Brooklyn Park, Minn., does not have to comply with an IRS summons for information because the summons was not authorized by a government official of sufficient rank.
The ruling by Judge Ann D. Montgomery concurs with a decision in December by U.S. Magistrate Judge Jeffrey J. Keyes.
Some tax-law experts have said that the IRS’s defeat could spur challenges to audits by other churches and force the IRS to engage in a lengthy, formal rule-making process to determine who has the authority to order an investigation into a church’s finances.
The IRS began to investigate Living Word in April 2007, following reports that the Rev. Mac Hammond had endorsed U.S. Rep. Michele Bachmann, a Minnesota Republican, from the pulpit—an act that would violate charity tax laws.
(Snip)
http://philanthropy.com/news/updates/7005/court-rules-against-irs-in-church-audit-case
Faith leaders and other nonprofit leaders may want to monitor this over the next several years. It could take that long.
IRS Miscellaneous Material
IRS Field Memoranda - http://www.irs.gov/charities/article/0,,id=96374,00.html
IRS Published Guidance and Bulletins - http://www.irs.gov/charities/content/0,,id=125361,00.html
IRS Revenue Rulings - http://www.taxlinks.com/rulings/findinglist/revrulmaster.htm and http://www.irs.gov/irm/part7/index.html
IRS Frequently Asked Questions (FAQ) - http://www.irs.gov/charities/content/0,,id=96986,00.html
ABC's for Exempt Organization
http://www.irs.gov/charities/article/0,,id=187787,00.html
United States Postal Service and Tax Exempt Organizations
United States Postal Service Publication 417, Nonprofit Standard Mail Eligibility; Explains and discusses eligibility for Nonprofit Standard Mail rates, application procedure, and mailing requirements - http://pe.usps.gov/text/pub417/welcome.htm and
http://pe.usps.gov/cpim/ftp/pubs/Pub417/Pub417.pdf
Other Resources
The Center for Non-profits of New Jersey has a booklet about Thinking of Forming a Non-Profit? What to Consider before You Begin: http://www.njnonprofits.org/ThinkingOfFormingDesc.html
See the Forming a Nonprofit Organization: A Checklist for incorporating at BoardSource, http://www.boardsource.org/Knowledge.asp?ID=3.367
Foundation Center Establishing a Nonprofit Organization - What are the characteristics that define an effective Nonprofit Organization? - http://foundationcenter.org/getstarted/tutorials/establish/
American Institute of Certified Public Accountants Understanding the Responsibilities of a Not-For-Profit Board Member [Download]
http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/AuditAttest/AuditPreprationandPlanning/PRDOVR~PC-017248PPT/PC-017248PPT.jsp
American Institute of Certified Public Accountants How Fraud Hurts You and Your Organization http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/FraudDetectionandPrevention/PRDOVR~PC-056513HS/PC-056513HS.jsp
American Institute of Certified Public Accountants The AICPA Audit Committee Toolkit: Not-for-Profit Organizations http://www.aicpa.org/Audcommctr/toolkitsnpo/homepage.htm
Six Things Every Board Member Should Know About the NEW 990 http://www.blueavocado.org/node/269
Planned Giving Design Center Tax Consideration in Charitable Auctions http://www.pgdc.com/pgdc/tax-considerations-charitable-auctions
Previous Related Blog Articles
Your Nonprofit Library Third Shelf – Getting the U.S. IRS to Recognize Your Nonprofit as Tax Exempt
The Role and Non-Role of Nonprofits and Churches in Elections – Your Nonprofit Library Third Shelf
IRS Makes Filing For Nonprofit Tax Exemption Easier, Sort Of
Effect of IRS Ruling Eliminating Advanced Rulings On Form 1023
IRS Rules on the Phase-in for Nonprofit Organizations to File the New 990 Series Forms
Fiscal Sponsorship or Agent: A Yellow Light
There are other articles here on incorporating a nonprofit. You are invited to add to this list.
Thank you.
You will find here annual forms that must be filed, how to report contributions, issues over donations of motor vehicles, employment taxes, auctions, political lobbying, postal regulations and other resources. This completes the third shelf.
The single most change for reporting is the new Form 990. You should know this cold. Now!
Annual Filing to the IRS on Forms 990
Independent Sector’s article Revised Form 990, Accountability and Oversight - http://www.independentsector.org/programs/gr/draft_form_990.htm
Instructions for the New 2008 990s - http://www.irs.gov/irs/article/0,,id=186015,00.html
Forms 990 or 990-EZ and Schedules A and B – http://www.irs.gov/pub/irs-pdf/f990.pdf
990-EZ - http://www.irs.gov/pub/irs-pdf/f990ez.pdf
Instructions for Schedule A - http://www.irs.gov/instructions/i990sa/ch01.html
Instructions for Form 990 and Form 990-EZ (2007) –
http://www.irs.gov/instructions/i990-ez/index.html
e-Filing for Charities and Nonprofits, Form 990 (Return of Organization Exempt from Income Tax), Form 990-EZ (Short Return of Organization Exempt from Income Tax) and Form 990-PF (Return of Private Foundation) -
http://www.irs.gov/efile/article/0,,id=108211,00.html
E- Postcard Form 990-N New Annual Electronic Filing Requirement for Small Tax Exempt Organizations - http://www.irs.gov/charities/article/0,,id=169250,00.html
E-Postcard: Questions and Answers - http://www.irs.gov/charities/article/0,,id=173864,00.html
Pension Protection Act of 2006 Revises Exempt Organizations Tax Rules - http://www.irs.gov/charities/article/0,,id=161145,00.html
IRS Complaint Process For Tax Exempt Organizations - http://www.irs.gov/irs/article/0,,id=178241,00.html
Contributions from Taxpayers to Tax Exempt Organizations
IRS Publication 1771, Charitable Contributions - Substantiation and Disclosure Requirements – http://www.irs.gov/charities/article/0,,id=96102,00.html and http://www.irs.gov/pub/irs-pdf/p1771.pdf
Publication 526 is information for the taxpayer who makes charitable contributions - http://www.irs.gov/publications/p526/index.html
Motor Vehicles and Other Donations to a Tax Exempt Organization
New Publications Focus on Car Donations - http://www.irs.gov/newsroom/article/0,,id=124421,00.html
Form 4302, A Charity’s Guide to Motor Vehicle Donations –
http://www.irs.gov/pub/irs-tege/pub4302.pdf
Form 4303, A Donor’s Guide to Motor Vehicle Donations –
http://www.irs.gov/pub/irs-pdf/p4303.pdf
IRS Rules About Making a Motor Vehicle Donation - http://www.irs.gov/newsroom/article/0,,id=131660,00.html
Internal Revenue Bulletin 2007 – 40, Information Reporting by Organizations That Receive Charitable Contributions of Certain Motor Vehicles, Boats, and Airplanes - http://www.irs.gov/irb/2007-40_IRB/ar09.html
Exempt Organizations Abusive Tax Avoidance Transactions - http://www.irs.gov/charities/article/0,,id=128722,00.html
IRS Testimony: Charitable Giving Problems and Best Practices - http://www.irs.gov/newsroom/article/0,,id=124186,00.html
Independent Sector’s Comments about car donations - http://www.independentsector.org/programs/gr/vehicledonations.htm
Gaming
In addition to any state laws, see the material published by the IRS, Gaming Publication for Tax Exempt Organizations -
http://www.irs.gov/pub/irs-pdf/p3079.pdf
Topic 419 - Gambling Income and Expenses
http://www.irs.gov/taxtopics/tc419.html
Instructions for Form 990 and 990-EZ (2007)
http://www.irs.gov/instructions/i990-ez/ix01.html
Employment Taxes and Other Employer Instructions for Tax Exempt Organizations
Links to IRS articles concerning Employment Taxes for Exempt Organizations - http://www.irs.gov/charities/article/0,,id=128716,00.html
2008 Form 15, Circular E Employer's Tax Guide (revised annually) - http://www.irs.gov/pub/irs-pdf/p15.pdf
2008 Form 15–A Employer's Supplemental Tax Guide (revised annually) - http://www.irs.gov/pub/irs-pdf/p15a.pdf
2008 Form 15-B Employer's Supplemental Tax Guide on the employment tax treatment of fringe benefits - http://www.irs.gov/pub/irs-pdf/p15b.pdf
2008 Form 941 Employer’s Quarterly Federal Tax Return 941 Form (Rev. January 2008) - http://www.irs.gov/pub/irs-pdf/f941.pdf
2008 Instructions for Form 941 - http://www.irs.gov/pub/irs-pdf/i941.pdf
Publication 78, Cumulative List of Tax Exempt Organizations described in Section 170(c) of the Internal Revenue Code of 1986, a search for charities - http://www.irs.gov/charities/article/0,,id=96136,00.html
2008 Publication 509 (changes annually), Tax Calendars for 2008 - http://www.irs.gov/publications/p509/index.html
Publication 598 - Form to Declare Unrelated Business Income of a Tax Exempt Organization (NOTE: Tax Exempt organizations should be very aware of this Publication and its implications for Exempt status)- http://www.irs.gov/pub/irs-pdf/p598.pdf
Disclosure of Unrelated Business Income Tax Returns - The IRS has provided interim guidance (Notice 2007-45) on the requirement for 501(c)(3) organizations to make available for public inspection a copy of their unrelated business income tax (UBIT) returns (Form 990-T). The disclosure procedures are generally the same as those required for disclosure of an organization's Form 990. Some organizations not subject to other public disclosure requirements, such as churches, are required to disclose a Form 990-T; see Publication 598 immediately above - http://www.irs.gov/irb/2007-22_IRB/ar12.html
Intermediate Sanctions, Excise Tax on Excess Benefit Transactions (NOTE: Tax Exempt organizations should be very aware of this Publication and its implications for Exempt status. The purpose of this is to impose sanctions on the influential persons in charities and social welfare organizations who receive excessive economic benefits from the organization, rather than to punish the exempt organization itself.) - http://www.irs.gov/charities/charitable/article/0,,id=123298,00.html and http://www.irs.gov/pub/irs-tege/eotopice03.pdf
Political Activity and Lobbying
IRS Reminds Charities and Churches of Political Activity Ban - http://www.irs.gov/charities/charitable/article/0,,id=175825,00.html
Political Activities - Particularly important given the election season, the IRS released a revenue ruling (Rev. Rul. 2007-41) regarding what political activities are prohibited for tax-exempt organizations. To illustrate, the revenue ruling describes 21 situations and discusses which are permissible and which are not. http://www.irs.gov/irb/2007-25_IRB/ar09.html
Political Activities Compliance Initiative (2008 Election) http://www.irs.gov/charities/charitable/article/0,,id=181565,00.html
On February 3, 2009 the Chronicle of Philanthropy reported on an IRS vs Church-audit case involving alleged lobbying and candidate support. The article says in part:
Court Rules Against IRS in Church-Audit Case, By Grant Williams
The Internal Revenue Service has suffered another setback in its effort to pursue an audit of a church in Minnesota in a case that has ramifications for the tax agency and churches nationwide.
A U.S. District Court judge in Minneapolis ruled that the Living Word Christian Center, in Brooklyn Park, Minn., does not have to comply with an IRS summons for information because the summons was not authorized by a government official of sufficient rank.
The ruling by Judge Ann D. Montgomery concurs with a decision in December by U.S. Magistrate Judge Jeffrey J. Keyes.
Some tax-law experts have said that the IRS’s defeat could spur challenges to audits by other churches and force the IRS to engage in a lengthy, formal rule-making process to determine who has the authority to order an investigation into a church’s finances.
The IRS began to investigate Living Word in April 2007, following reports that the Rev. Mac Hammond had endorsed U.S. Rep. Michele Bachmann, a Minnesota Republican, from the pulpit—an act that would violate charity tax laws.
(Snip)
http://philanthropy.com/news/updates/7005/court-rules-against-irs-in-church-audit-case
Faith leaders and other nonprofit leaders may want to monitor this over the next several years. It could take that long.
IRS Miscellaneous Material
IRS Field Memoranda - http://www.irs.gov/charities/article/0,,id=96374,00.html
IRS Published Guidance and Bulletins - http://www.irs.gov/charities/content/0,,id=125361,00.html
IRS Revenue Rulings - http://www.taxlinks.com/rulings/findinglist/revrulmaster.htm and http://www.irs.gov/irm/part7/index.html
IRS Frequently Asked Questions (FAQ) - http://www.irs.gov/charities/content/0,,id=96986,00.html
ABC's for Exempt Organization
http://www.irs.gov/charities/article/0,,id=187787,00.html
United States Postal Service and Tax Exempt Organizations
United States Postal Service Publication 417, Nonprofit Standard Mail Eligibility; Explains and discusses eligibility for Nonprofit Standard Mail rates, application procedure, and mailing requirements - http://pe.usps.gov/text/pub417/welcome.htm and
http://pe.usps.gov/cpim/ftp/pubs/Pub417/Pub417.pdf
Other Resources
The Center for Non-profits of New Jersey has a booklet about Thinking of Forming a Non-Profit? What to Consider before You Begin: http://www.njnonprofits.org/ThinkingOfFormingDesc.html
See the Forming a Nonprofit Organization: A Checklist for incorporating at BoardSource, http://www.boardsource.org/Knowledge.asp?ID=3.367
Foundation Center Establishing a Nonprofit Organization - What are the characteristics that define an effective Nonprofit Organization? - http://foundationcenter.org/getstarted/tutorials/establish/
American Institute of Certified Public Accountants Understanding the Responsibilities of a Not-For-Profit Board Member [Download]
http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/AuditAttest/AuditPreprationandPlanning/PRDOVR~PC-017248PPT/PC-017248PPT.jsp
American Institute of Certified Public Accountants How Fraud Hurts You and Your Organization http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/FraudDetectionandPrevention/PRDOVR~PC-056513HS/PC-056513HS.jsp
American Institute of Certified Public Accountants The AICPA Audit Committee Toolkit: Not-for-Profit Organizations http://www.aicpa.org/Audcommctr/toolkitsnpo/homepage.htm
Six Things Every Board Member Should Know About the NEW 990 http://www.blueavocado.org/node/269
Planned Giving Design Center Tax Consideration in Charitable Auctions http://www.pgdc.com/pgdc/tax-considerations-charitable-auctions
Previous Related Blog Articles
Your Nonprofit Library Third Shelf – Getting the U.S. IRS to Recognize Your Nonprofit as Tax Exempt
The Role and Non-Role of Nonprofits and Churches in Elections – Your Nonprofit Library Third Shelf
IRS Makes Filing For Nonprofit Tax Exemption Easier, Sort Of
Effect of IRS Ruling Eliminating Advanced Rulings On Form 1023
IRS Rules on the Phase-in for Nonprofit Organizations to File the New 990 Series Forms
Fiscal Sponsorship or Agent: A Yellow Light
There are other articles here on incorporating a nonprofit. You are invited to add to this list.
Thank you.
Friday, September 26, 2008
The Role and Non-Role of Nonprofits and Churches in Elections – Your Nonprofit Library Third Shelf
The Internal Revenue Service has issued significant material about the potential involvement of nonprofit organizations and Churches in an election including registering voters, inviting candidates to speak, endorsing candidates, driving voters to poll places, massive mailings in support of a candidate or to get out the vote, personnel policies. Here is a library shelf of web-based information about the role of nonprofits and Churches in elections from the IRS and other advocates of the nonprofit world, Alliance for Justice and Independent Sector.
Political Activities Compliance Initiative (2008 Election)
The Internal Revenue Service's Political Activities Compliance Initiative (PACI) will remain in effect for the 2008 election season. PACI seeks to educate section 501(c)(3) organizations such as charities and churches about the federal ban on political activity.
As in previous years, the 2008 IRS effort will include both educational and compliance components. This year's initiative will include:
The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations
Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.
Certain activities or expenditures may not be prohibited depending on the facts and circumstances. For example, certain voter education activities (including presenting public forums and publishing voter education guides) conducted in a non-partisan manner do not constitute prohibited political campaign activity. In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not be prohibited political campaign activity if conducted in a non-partisan manner.
On the other hand, voter education or registration activities with evidence of bias that
http://www.irs.gov/charities/charitable/article/0,,id=163395,00.html
Political Campaign Intervention by 501(c)(3) Tax-Exempt Organizations - Educating Exempt Organizations
As a key element in its program to secure compliance with the ban on political campaign activity by section 501(c)(3) organizations, the Internal Revenue Service educates organizations about the ban and puts them on notice of the enforcement program. Towards this end, it employs an array of educational tools:
Examination Procedures – Prohibited Political Campaign Intervention by Section 501(c)(3) Organizations
In addition to the general procedures for audits of exempt organizations, the IRS has developed special procedures for cases involving potential political activity by section 501(c)(3) organizations. The goal of the procedures is two-fold:
Guidance for Churches:
Publication 1828, Tax Guide for Churches and Religious Organizations -
http://www.irs.gov/pub/irs-pdf/p1828.pdf
Special Rules Limiting IRS Authority to Audit a Church
The IRS may only initiate a church tax inquiry if the Director, Exempt Organizations Examinations, reasonably believes, based on a written statement of the facts and circumstances, that the organization: (a) may not qualify for the exemption; or (b) may not be paying tax on unrelated business or other taxable activity.
http://www.irs.gov/charities/churches/article/0,,id=179674,00.html
Restrictions on Church Inquiries and Examinations
http://www.irs.gov/charities/churches/article/0,,id=179675,00.html
On February 3, 2009 the Chronicle of Philanthropy reported on an IRS vs Church-audit case involving alleged lobbying and candidate support. The article says in part:
Court Rules Against IRS in Church-Audit Case, By Grant Williams
The Internal Revenue Service has suffered another setback in its effort to pursue an audit of a church in Minnesota in a case that has ramifications for the tax agency and churches nationwide.
A U.S. District Court judge in Minneapolis ruled that the Living Word Christian Center, in Brooklyn Park, Minn., does not have to comply with an IRS summons for information because the summons was not authorized by a government official of sufficient rank.
The ruling by Judge Ann D. Montgomery concurs with a decision in December by U.S. Magistrate Judge Jeffrey J. Keyes.
Some tax-law experts have said that the IRS’s defeat could spur challenges to audits by other churches and force the IRS to engage in a lengthy, formal rule-making process to determine who has the authority to order an investigation into a church’s finances.
The IRS began to investigate Living Word in April 2007, following reports that the Rev. Mac Hammond had endorsed U.S. Rep. Michele Bachmann, a Minnesota Republican, from the pulpit—an act that would violate charity tax laws.
(Snip)
http://philanthropy.com/news/updates/7005/court-rules-against-irs-in-church-audit-case
Faith leaders and other nonprofit leaders may want to monitor this over the next several years. It could take that long.
Alliance for Justice Material
Permissible Nonpartisan 501(c)(3) and Partisan Campaign Contact on Voter Engagement/Protection Efforts
Which says in part:
Under these rules, 501(c)(3) organizations may:
Elections Rules – Voter Education
http://www.independentsector.org/programs/gr/electionrulesvotereducation.pdf
Election Rules - Issue Advocacy vs. Political Campaign Intervention
http://www.independentsector.org/programs/gr/electionrulesissueadvocacy.pdf
Political Activities Compliance Initiative (2008 Election)
The Internal Revenue Service's Political Activities Compliance Initiative (PACI) will remain in effect for the 2008 election season. PACI seeks to educate section 501(c)(3) organizations such as charities and churches about the federal ban on political activity.
As in previous years, the 2008 IRS effort will include both educational and compliance components. This year's initiative will include:
- Letters to the national political party committees explaining the law's ban on political campaign activity by charities and churches.
- A letter in the Federal Election Commission's monthly newsletter asking candidates to ensure that their contacts with charitable organizations do not inadvertently jeopardize the tax-exempt status of any organization.
- A news release reminding charities and churches of the ban.
- Reorganizing the IRS' Web site materials concerning the ban to make them more accessible to organizations, political candidates and parties, and the general public.
- Examinations of organizations the IRS believes may be violating the ban.
- A memorandum from the Director, Exempt Organizations Examinations, describes how the IRS will analyze political campaign activity issues involving websites of section 501(c)(3) organizations
http://www.irs.gov/charities/charitable/article/0,,id=181565,00.html
The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations
Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.
Certain activities or expenditures may not be prohibited depending on the facts and circumstances. For example, certain voter education activities (including presenting public forums and publishing voter education guides) conducted in a non-partisan manner do not constitute prohibited political campaign activity. In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not be prohibited political campaign activity if conducted in a non-partisan manner.
On the other hand, voter education or registration activities with evidence of bias that
- would favor one candidate over another;
- oppose a candidate in some manner; or
- have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention.
http://www.irs.gov/charities/charitable/article/0,,id=163395,00.html
Political Campaign Intervention by 501(c)(3) Tax-Exempt Organizations - Educating Exempt Organizations
As a key element in its program to secure compliance with the ban on political campaign activity by section 501(c)(3) organizations, the Internal Revenue Service educates organizations about the ban and puts them on notice of the enforcement program. Towards this end, it employs an array of educational tools:
- Guidance to exempt organizations on how to apply the ban in various factual situations.
- Revenue Ruling 2007-41 and Factsheet 2006-17 distill IRS guidance in this area, each providing 21 examples of how it applies.
- News releases and other resources for the media discussing the ban.
- Phone Forum on Rules for Tax-Exempt Organizations During an Election Year: Topics include the distinctions between political activity, lobbying, and general advocacy, and which activities are permissible by 501(c)(3), 501(c)(4), 501(c)(5), 501(c)(6) and 527 organizations. Read the script and see the slide show.
- Access to internal training materials . Note: These materials were designed for training purposes only; under no circumstances should the contents be used or cited as authority for setting or sustaining a technical position.
- Frequently asked questions
- 'Charities and Politics' audio interview featuring Steven T. Miller, Commissioner, Tax-Exempt and Government Entities.
- Other resources
- Program letter describing components of the IRS Political Activity Compliance Initiative (2008 election)
Examination Procedures – Prohibited Political Campaign Intervention by Section 501(c)(3) Organizations
In addition to the general procedures for audits of exempt organizations, the IRS has developed special procedures for cases involving potential political activity by section 501(c)(3) organizations. The goal of the procedures is two-fold:
- to educate 501(c)(3) organizations of the ban on political activity and put them on notice of the enforcement program in order to prevent violations, and
- to address noncompliance while the issue remains prominent, so that there are no recurrences and so correction can occur before the relevant election.
Guidance for Churches:
Publication 1828, Tax Guide for Churches and Religious Organizations -
http://www.irs.gov/pub/irs-pdf/p1828.pdf
Special Rules Limiting IRS Authority to Audit a Church
The IRS may only initiate a church tax inquiry if the Director, Exempt Organizations Examinations, reasonably believes, based on a written statement of the facts and circumstances, that the organization: (a) may not qualify for the exemption; or (b) may not be paying tax on unrelated business or other taxable activity.
http://www.irs.gov/charities/churches/article/0,,id=179674,00.html
Restrictions on Church Inquiries and Examinations
http://www.irs.gov/charities/churches/article/0,,id=179675,00.html
On February 3, 2009 the Chronicle of Philanthropy reported on an IRS vs Church-audit case involving alleged lobbying and candidate support. The article says in part:
Court Rules Against IRS in Church-Audit Case, By Grant Williams
The Internal Revenue Service has suffered another setback in its effort to pursue an audit of a church in Minnesota in a case that has ramifications for the tax agency and churches nationwide.
A U.S. District Court judge in Minneapolis ruled that the Living Word Christian Center, in Brooklyn Park, Minn., does not have to comply with an IRS summons for information because the summons was not authorized by a government official of sufficient rank.
The ruling by Judge Ann D. Montgomery concurs with a decision in December by U.S. Magistrate Judge Jeffrey J. Keyes.
Some tax-law experts have said that the IRS’s defeat could spur challenges to audits by other churches and force the IRS to engage in a lengthy, formal rule-making process to determine who has the authority to order an investigation into a church’s finances.
The IRS began to investigate Living Word in April 2007, following reports that the Rev. Mac Hammond had endorsed U.S. Rep. Michele Bachmann, a Minnesota Republican, from the pulpit—an act that would violate charity tax laws.
(Snip)
http://philanthropy.com/news/updates/7005/court-rules-against-irs-in-church-audit-case
Faith leaders and other nonprofit leaders may want to monitor this over the next several years. It could take that long.
Alliance for Justice Material
Permissible Nonpartisan 501(c)(3) and Partisan Campaign Contact on Voter Engagement/Protection Efforts
Which says in part:
Under these rules, 501(c)(3) organizations may:
- Provide publicly available information to all candidates or parties—either upon request or at the organization’s initiative.
- Issue press releases or post information on their websites describing their nonpartisan voter outreach plans and strategies or concerns about voter intimidation or voting problems in particular districts.
- Share research on voter-protection problems or other issues of general concern, as long as it is made generally available to the public (e.g., posted on the 501(c)(3)’s website) or is offered to all candidates in a race or all viable political parties in a jurisdiction.
- Solicit support from all political parties or candidates for a particular office for the 501(c)(3)’s advocacy efforts to ensure a fair and effective voting system (e.g., asking all political parties to submit an amicus brief in support of the 501(c)(3)’s efforts).
- Support litigation brought by a party or candidate that, in the independent judgment of the 501(c)(3), furthers the security of the voting process. In doing so, though, the 501(c)(3) must avoid showing support for the party or candidate and should affirmatively state its neutrality.
501(c)(3) organizations may not:
- Explicitly or implicitly endorse any candidate or political party. Nothing should be said, done, or implied that suggests electoral favor or disfavor either for a specified candidate or political party, or for unnamed candidates or parties generally that subscribe to particular issue positions or have particular characteristics. For instance, 501(c)(3)s cannot suggest that any particular political party or candidate has a better or worse position on election-protection issues.
- Make any direct or indirect candidate, party, federal PAC or 527 contribution. A 501(c)(3) should not conduct research on an issue in order to provide it to a particular candidate or party or at the request of a particular candidate or party. In addition, it cannot use any of its resources to pay for or participate in a partisan event.
- Target election-protection efforts to a precinct based on the political party or candidate the precinct is likely to support.
- Consult with a particular party or candidate to determine where to target election-protection efforts.
- Coordinate voter outreach efforts with candidates, parties, federal PACs or other 527 groups, even if the 501(c)(3) itself otherwise follows nonpartisan guidelines. Public charities cannot tailor their efforts to mesh with those of partisan entities or share voter outreach strategies with one candidate or party only.
Even if these standards are satisfied, other groups or the media may raise questions about any 501(c)(3) engagement with a political candidate, party, or partisan group. Therefore, the risk of adverse publicity for your efforts should be considered in deciding whether to deal with them in any manner.
Note that 501(c )(3) organizations may coordinate their voter protection efforts with other 501(c)(3) organizations, and with other kinds of tax-exempt groups, businesses and other organizations, so long as the 501(c)(3)’s collaborators themselves are complying with 501(c)(3) nonpartisan standards in their coordinated efforts. (Underline in the original - DAG)
http://www.afj.org/for-nonprofits-foundations/permissible-501-c-3-interaction-with-partisan-groups-final.pdf
The Alliance for Justice states in one of its articles about lobbying, The Downside of Private Foundations Using Restrictive Grant Agreements:
Contrary to popular belief, federal tax law does not require private foundations to include lobbying prohibitions in grants made to public charities. Many foundations unfortunately make restricted grants by using grant agreement letters that prohibit their grantees from using grant funds for “any propaganda or attempt to influence legislation.” Such language is overly restrictive and may undermine the grantee’s ability to effectively and efficiently achieve its goals. The prohibition on using grant funds for lobbying only applies to private foundation grants to non-public charities, such as 501(c)(4) organizations.
http://www.afj.org/assets/resources/nap/restrictive-grant-agreements.pdf
Independent Sector Material
Election 2008: http://www.independentsector.org/programs/gr/ElectionResources.html
Democracy in Action -- Projects by Nonprofits
- Candidate Forums
- Election Judges for Charity
- Engaging Young Adults
- Funding Voter Engagement
- Get Out the Vote
- Personnel Policies
- Policy Agendas
- Voter Education
- Voter Registration
Elections Rules – Voter Education
http://www.independentsector.org/programs/gr/electionrulesvotereducation.pdf
Election Rules - Issue Advocacy vs. Political Campaign Intervention
http://www.independentsector.org/programs/gr/electionrulesissueadvocacy.pdf
Subscribe to:
Posts (Atom)
Posts
