Legal & Regulatory

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UBIT: Advertisements vs. Qualified Sponsorship Payments

Unrelated Business Income Tax or UBIT can be a confusing topic.  Here’s an article that helps clarify the distinction between advertisements that trigger UBIT and qualified sponsorship payments that don’t.  Click here to read the article.

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IRS Explains How to Reinstate Automatically Revoked Exempt Status

The IRS has issued a new Revenue Procedure (2014-11) outlining four ways for tax-exempt organizations that have lost their exempt status for failing to file required tax returns for three consecutive years to regain their exempt status, with possible retroactive reinstatement. The procedures differ based on the size of the organization, the speed after revocation with which it acts, and whether it has a claim of “reasonable clause” for failure to file its returns.

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IRS Rules on Contributions
IRS Publication 1771, Charitable Contributions—Substantiation and Disclosure Requirements

The IRS’s Publication 1771, Charitable Contributions—Substantiation and Disclosure Requirements explains the requirements that organizations and donors need to be aware of to meet substantiation and disclosure requirements for federal income tax return reporting purposes.

It describes what is required of charities that receive contributions from a donor in terms of written contributions, how to treat goods or services, payroll deductions and unreimbursed expenses. It also includes sample language for acknowledgements.

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The Proper Way to Thank Donors
What the IRS requires

IRS Publication 1771 says that for any gift over $250, the giver must have written documentation of the gift. That written documentation, according to the Tax Court, must comply with the requirements outlined in Pub 1771:

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Document Retention Policies
What do you need to keep?

Some documents and business records of a nonprofit should be maintained permanently, such as:

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LawforChange
The legal forum for social innovators

 

LawForChange® is a unique legal resource for people and organizations dedicated to improving lives and bringing about positive social change.

You will find information on the following topics with legal information appropriate for California based organizations.

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Community Organization Representation Project (CORP)
Pro bono legal services

Pro bono legal services are offered to nonprofits serving low-income communities in Northern California by the Community Organization Representation Project (CORP) at the Volunteer Legal Services Program of the Bar Association of San Francisco.  Visit their website or contact Doan Nguyen at 415.782.9000, ext. 8758 or email so they can evaluate how they may help you address your legal needs.

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IRS Tax Information for Charities & Other Non-Profits
Updated website

Stay up-to-date with the IRS.  Bookmark their recently updated webite www.irs.gov/charities or select “Charities & Non-Profits” in the “Information For” drop-down menu in the top right corner of the home page.

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National Association of State Charity Officials

The National Association of State Charity Officials (NASCO) is an association of state offices charged with oversight of charitable organizations and charitable solicitation in the United States. The requirements and procedures for forming charitable organizations differ from state to state, as do the registration and filing requirements for organizations that conduct charitable activities or solicit charitable contributions. Consult the US Charity Offices listed on this website for links to state-specific information.

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Nonprofit Law Center
Legal information from a nationationally known attorney

The Nonprofit Law Center, is hosted and written by Bruce R. Hopkins. This site provides information on the law as it applies to nonprofit organizations, including developments pertaining to tax-exempt status, charitable giving, and fundraising regulation.

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Nonprofit Law Blog
Legal information from California attorneys

The Nonprofit Law Blog offers articles and resources from the NEO Law Group, California attorneys specializing in nonprofit law. 

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Compliance for California Nonprofits
Reporting requirements for California nonprofit organizations

The Compliance for California Nonprofits website outlines all of the reporting requirements for California nonprofit organizations with links and instructions.

Resource For Members

Waivers and Hold Harmless Clauses
Risk managment tools

The reality is that clients and volunteers may bring a lawsuit against a nonprofit if they suffer injuries.  The Nonprofit Risk Management Center offers this  information

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The Brown Act or Open Meeting Law
Does it apply to nonprofits?

This act only applies to nonprofit organizations in the specific cases outlined in the excerpt quoted below from The Brown Act: Open Meetings for Local Legislative Bodies  2003 California Attorney General’s Office

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Public Disclosure
The documents your organization must make available to the public

The Public Law Counsel has prepared this memo outlining federal and California state requirements.  It’s important to know what must be made available and how you must make it available, as well as what isn’t required to be available.

Helpful link

Bankruptcy Information for Nonprofits
From the Public Counsel Law Center

This information sheet from Public Counsel Law Center explores common nonprofit concerns regarding bankruptcy.  It offers a starting point  to evaluate whether bankruptcy can help achieve a more sustainable economic future through a reorganization, or whether the time has come to “close with honor.”

Helpful link

State Charitable Solicitation Statutes
Registration required to raise funds in many states

Thirty-nine states and the District of Columbia have charitable solicitation statutes that generally require nonprofits soliciting contributions and, in most cases, their for-profit fundraising professionals to register prior to soliciting contributions or providing fundraising counsel services.

Helpful link

New IRS Search Tool: Select Check

The IRS recently launched a new online search tool for information about charitable organizations.

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Sales and Use Tax Requirements for California Nonprofits

Yes, nonprofits do have to occasionally pay taxes.  Here are some links to help you understand when your organization must pay a California state tax.

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Tax credit available for health insurance premiums
For nonprofits who meet these criteria

With the President’s signing of the Patient Protection and Affordable Care Act on March 23, 2010, all qualified small employers – both nonprofits and for-profits – can claim a full or partial tax credit when they pay for at least half of the health insurance premiums for their employees.

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California Attorney Generals Office
Role and purpose

The Attorney General regulates charities and the professional fundraisers who solicit on their behalf.

Image of StayExempt
Helpful link

StayExempt
IRS educational website for exempt 501(c)(3) organizations

The IRS recently launched a new look and improved navigation for its educational website for exempt organizations, StayExempt.

Is Your GuideStar Report Up To Date?
Helpful link

Is Your GuideStar Report Up To Date?

Watch GuideStar’s video about the new and improved design of their nonprofit reports.  Based on what donors want to see it focuses on impact and transparency to help people who research nonprofits make better, more educated, and more confident decisions.  For an example of this new format, visit GuideStar’s own nonprofit report

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Dissolving a Nonprofit Organization

Most tax-exempt organizations that end their operations, either through shutting down, transferring their assets or merging with another tax-exempt organization, must inform the IRS about the details of the action. In California, organizations must also inform the Attorney General’s Office and the Secretary of State. 

Resource For Members

Governance Policies & Procedures Samples
Form 990 Policy Series

Developed by group of California based lawyers, the Form 990 Policy Series offers sample policies on a variety of topics including compensation, conflict of interest, investment and more.

Helpful link

Fiscal Sponsorship
An alternative to nonprofit status

Fiscal sponsorship is an arrangement between a 501(c)(3) public charity and a project (that does not have that tax status) in which, typically, the charity receives and expends funds to advance the charitable work of the project while retaining discretion and control over the funds.  GrantSpace offers comprehensive information on all aspects of fiscal sponsorship.

Helpful link

How to Read the IRS Form 990

This  version of  How to Read IRS Form 990 is based on the newly redesigned and expanded Form 990 that was first required for 2008 filings.

Helpful link

Is Your Form 990 Due?
e-filing made easy

Whether you are e-filing or mailing a form, National Center for Charitable Statistics Form 990 Online can help make the process smooth.

 

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Guide to Charities
CA Attorney General's booklet helps answer legal questions

Guide to Charities CA Attorney General’s booklet helps answer legal questions

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