Nonprofit Law Blog: “Satisfaction of one of the public support tests under Section 509(a) of the Internal Revenue Code is one way that an organization can qualify as a public charity rather than a private foundation. . . . There is an alternative and different “one-third support test” under Section 509(a)(2) for organizations seeking public charity status under this Section.”
CharityLawyer: “We love getting calls from potential clients with exciting ideas. However, surprisingly often, we are in a position which we do not enjoy of letting the caller know that as exciting as their idea is, it does not qualify for tax-exemption. Some common examples of ideas that will not qualify include fundraising for a fallen officer or a specific individual’s medical care, raising money to invest in start-up technology companies, or running a business that will turn over all of its profits to 501(c)(3) organizations. Before embarking on a plan to change the world by starting a 501(c)(3) organization, it’s a good idea to think carefully about the organization’s purpose and whether it will qualify for 501(c)(3) tax-exemption.”
Executive MBA Programs: “Charities and scholarships are usually created solely on one’s passion to help others or a life experience that has inspired them to provide aid to others in the same situation. With an outpouring of individuals wanting to start charitable organizations that can make the world a better place, it is important to do your research. Starting a nonprofit organization can be both fulfilling and exciting, but it also requires an extreme amount of focus and planning. Even though you are not starting this foundation for monetary purposes, it is still necessary to equip yourself with a support system that will start you on the road to success. The below resources can give you the basic advice and principles needed to get you established.”
CharityLawyer.com: “This list was started as the inaugural post to CharityLawyer Blog. The post struck a nerve, was mentioned by the Chronicle of Philanthropy, the Nonprofit Quarterly, and numerous bloggers and twitter users. San Francisco tax-exempt organizations lawyer and publisher of the Nonprofit Law Blog, Gene Takagi, reviewed the list and added five more governance mistakes from his own experience.”
Nonprofit Law Blog: “IRS exempt organizations audit manager Joe Kroll spoke at a program for the Bar Association of San Francisco yesterday and discussed five common ways charitable organizations jeopardize their 501(c)(3) tax-exempt status.
- Private inurement / private benefit.
- Lobbying and political activity.
- Filing requirements. Small 501(c)(3) organizations that have not previously filed Form 990 or Form 990-EZ may be required to electronically file Form 990-N. Failure to file for three consecutive years will result in revocation of exempt status.
- Unrelated business activities.
- Employment issues (particularly the employee-independent contractor-volunteer distinctions).”