nonprofit

Earned Income Strategies (Part 2 of 5): Related Business Activity (Doing Good by Doing Business)

Contrary to popular belief, a nonprofit can (and maybe even should) make a profit from its business activities. Depending on what the activity is, a nonprofit 501(c)(3) organization may not have to pay taxes on any profit it makes, such as activities that are related to its charitable purposes.             We define related business activity …

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Coronavirus and the Law: Is there a Legal Duty to Prevent Harm during a Pandemic?

It’s no doubt that the novel coronavirus (COVID-19) has introduced a high level of panic for local businesses, especially with many big companies facing large-scale work force consequences due to the presences of the disease. Many smaller companies might ask: what responsibility do I have? Are there any legal liabilities if COVID-19 spreads throughout their …

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Newman’s Own Law

Fun Fact: Did you know that one of the largest food product distributors in the world is also owned by a 501(c)(3) tax exempt organization? The Newman’s Own Foundation (a private foundation) owns 100% of No Limit LLC, the producer and distributor of the Newman’s Own brand of food products (think the salad dressings). But …

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Applying for 501(c)(3) Tax-Exempt Status Goes Entirely Online

Through 2019, the IRS revealed that it was working to bring as much tax-exempt organization submissions to the IRS online to use electronic data to protect against fraud and other misuse, and to streamline the 501(c)(3) tax-exempt status process.  In late 2019, the average time for a paper 1023 application (not the 1023-EZ, which is …

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Tax-exempt organizations – Be sure to file your 990 informational return!

Despite the IRS’s best efforts to inform the public, many tax-exempt organizations fail to file their annual informational return (examples here).  While failing to file for a single year may trigger late fee penalties, the real threat is that if an organization fails to file their 990 for three consecutive tax years, they AUTOMATICALLY lose …

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Introducing the New 1023-EZ!

Effective July 1, 2014, the IRS implemented a new, streamlined application process for smaller organizations seeking tax-exempt status as under IRC section 501(c)(3) . Replacing the old, longer Form 1023, the new, shorter, and electronic Form 1023-EZ is the IRS’s solution to reduce the existing backlog of applications for tax-exemption. Although this will not affect …

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“The Way We Think About Charity is Dead Wrong” by Dan Pallotta

Many people have a misconception about fundraising costs and charitable giving.  Too many donors ask to see the numbers on a charity’s overhead and how much of their donated dollar will be spent “on the ground” without also asking about the overall impact of an organization.  This thinking, among other myopic views about charity, is …

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Online Charitable Solicitations: 4 Tips for Using the “Donate Here” Button

Your shiny new website is up and running. And, like most tax-exempt nonprofit organizations, your website prominently displays a “donate here” button. What better way to solicit charitable donations from American philanthropists! The problem is, your organization may now be “soliciting” donations from the residents of every state in the United States. You’ve probably heard or have …

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Nonprofits: How to Shield Your Volunteers from Personal Liability

You've put in the fundraising leg work for your nonprofit. Along the way, you've probably convinced a number of people to volunteer for your organization and cause.  Now, with money in hand and a workforce to deploy, you’re ready to apply your organizational force out in the world! BUT WAIT! Did you know that the people volunteering for …

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Capital and Control: The final two considerations for determining legal structure for your Social Enterprise.

You want to make a change with your new business venture and you’re ready to file the necessary paper work to form a legal structure, but what type of legal structure should you form?  Because your idea combines for-profit considerations and nonprofit motives, you’re a little confused about whether you should form a nonprofit, a …

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