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KBLX Nonprofit Weekend Tips

An ongoing series of informational entries

KBLX 102.9 FM Weekend Tip - What is UBIT (Unrelated Business Income Tax)?


Lenora Williams: Posted on Saturday, May 18, 2013 8:38 AM

What is UBIT (Unrelated Business Income Tax)?

Nonprofit organizations are usually subject to unrelated business income tax (UBIT) on income from a trade or business which is regularly carried on and which is "unrelated" to its exempt purpose, it is critical to determine whether an activity is "related" to the organization’s exempt purpose.

To be substantially related, the activity must "contribute importantly to the accomplishment" of the exempt purposes.

For most Nonprofit organizations, an activity is an unrelated business (and subject to unrelated business income tax) if it meets three requirements:

It is "trade or business" (go to IRS link below for definition)

It is frequency and there is continuity

It is "not substantially related" to furthering the Nonprofit (go to IRS link below for definition)

Exceptions;

Dividends

Interest,

Certain other investment income,

Royalties,

Certain rental income,

Certain income from research activities, and

Gains or losses from the disposition of property are excluded when computing unrelated business income.

In addition;

. Volunteer Labor

. School Cafeterias and similar relationships

. Selling Donated Merchandise

. Bingo

More information on the following IRS links:

http://www.irs.gov/Charities-&-Non-Profits/Unrelated-Business-Income-Defined

http://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations/Unrelated-Business-Income-Tax-Exceptions-and-Exclusions

KBLX 102.9 FM Nonprofit Weekend Tip! Can Nonprofits be Landlords?


KBLX 102.9 FM Nonprofit Weekend Tip! Can Nonprofits be Landlords?

Lenora Williams: Posted on Saturday, May 11, 2013 9:10 AM

Can Nonprofits be landlords?

Rental income by itself should not jeopardize your organization’s federal 501(c)(3) charity status.

A charity may have rental income and in some cases the income is not even subject to unrelated business income tax (“UBIT”)

Nonprofit organizations are usually subject to unrelated business income tax (UBIT) on income from a trade or business which is regularly carried on and which is "unrelated" to its exempt purpose, it is critical to determine whether an activity is "related" to the organization’s exempt purpose.

New York State Property Tax Exemption

Nonprofit organizations in New York State are eligible to receive exemption from New York State real estate taxes for property the organization owns and uses for exempt purposes.

California Welfare Exemption for Property Tax

Real and personal property owned and operated by certain nonprofit organizations can be exempted from local property taxation through a program jointly administered by the Board of Equalization and county assessors' offices in California. This exemption, known as the Welfare Exemption, is available to qualifying organizations that have income- tax- exempt status under Internal Revenue Code section 501(c)(3) or 23701(d) of the Revenue and Taxation Code and are organized and operated exclusively for religious, charitable, scientific or hospital purposes.

Link to California Property Tax Welfare Exemption 2012: http://www.boe.ca.gov/proptaxes/pdf/pub149.pdf   


KBLX 102.9 FM Nonprofit Weekend Tip! Nonprofit Taxable Income

Lenora Williams: Posted on Saturday, May 25, 2013 11:26 AM

Can Nonprofits Have Taxable Income?

Yes, If the income generated by your Nonprofit meets these 3 requirements it is considered Unrelated Business Income and Therefore Taxable:

The income is from a Trade or Business that is outside of your Nonprofit business

The income is not just a onetime source but there is frequency and continuity

The income is not substantially related to furthering your Nonprofit

There are always EXCEPTIONS

Some exceptions for income that is not taxable are:

Income from dividends

Interest earned income

some investment income

royalties, certain rental income, certain income from research activities

gains or losses form sale of property

volunteer labor

school cafeterias and similar relationships

selling donated merchandise.....

Bingo (and it is not considered gambling)

KBLX 102.9 Nonprofit Weekend Tip! How are Nonprofits fund​ed?​


Lenora Williams: Posted on Saturday, June 22, 2013 6:07 PM

How do nonprofits receive funds?

Traditionally, the majority of Nonprofit funds are generated from grants Some grant funding sources are; Federal, State, County, City and from Private foundations like Kaiser, Chevron, Target, Blue Cross, Blue Shield, Kohl’s and more

Another Traditional fund development source is fundraising; car washes, annual events like; concerts, luncheons, walks and more

New ways to raise funds, creative out of the box ways, are through website sales and donations and Donor Cultivation

But Let’s Not Forget Donors, Individual contributors/Investors who believe in your vision and mission and act as ambassadors and become annual annual donors

Nonprofits can also have Trust funds and Endowment funds set up to keep on giving - By investing Trust funds and Endowment funds and gaining interest earned dollars - Those interest dollars can be placed in fund reserves, more importantly, the interest earned dollars are not restricted and can be used in any way needed to support the Nonprofit's mission

Definition of a Charitable remainder Trust fund Nolo publication link:

http://www.nolo.com/legal-encyclopedia/charitable-trust-tax-deduction-break-29702.html

Definition of Nonprofit Endowment Funds:

"A fund that is made up of gifts and bequests that are subject to a requirement that the principal be maintained intact and invested to create a source of income for an organization. Donors may set up an endowments to fund a specific interest; and a nonprofit's governing body may set up an endowment. In any case, an endowment requires that the principal remain intact in perpetuity, or for a defined period of time, or until sufficient assets have been accumulated to achieve a designated purpose"

Link From The Merrill Lynch Center for Philanthropy & Nonprofit Management

http://www.mainecola.org/Portals/0/DOCS/Prudent%20Non%20Profit%20Investing.pdf

102.9 FM Radio Nonprofit Weekend Tip! Can Nonprofit Board Members be family members?


Lenora Williams: Posted on Saturday, July 27, 2013 2:14 PM

Can Nonprofit Board Members be family members?

Limit Family Relationships on the Nonprofit Board of Directors

Family relationships are defined as an individual’s spouse, brothers and sisters, children , grandchildren, and spouses of brothers, sisters and their children, and grandchildren There is not a hard and fast I.R.S. rule excluding family

I.R.S. suggests to new applicants that their Boards of Directors practice family exclusion

In a clear effort to increase transparency, the New annual IRS 990 tax form REQUIRES nonprofits to disclose business and family relationships of the Nonprofit’s governing body

Can there be any Relationships among officers, etc.?

Answer “Yes”

On the Nonprofit tax form 990, if there is a family or business relationship with another listed person at any time during the organization’s tax year. On the 990 form, for each family and business relationship you have to identify the persons and describe their relationships in a tax form Schedule O. It is sufficient to state “family relationship” or “business relationship” without greater detail.

Family relationships are defined as an individual’s spouse, brothers and sisters, children, grandchildren, and spouses of brothers, sisters and their children, and grandchildren There is not a hard and fast I.R.S. rule excluding a second or third person related by family or marriage serving on the same Nonprofit Board of Directors at the same time.

I.R.S. suggests to new applicants that they prefer non-familial Boards of Directors.

IRS Governance Information Link:

http://www.irs.gov/pub/irs-tege/governance_practices.pdf

KBLX 102.9 Nonprofit Weekend Tip! What are 501c4 Organizations?


Lenora Williams: Posted on Saturday, March 15, 2014 9:51 AM

What are 501(c)(4)

501(c)(4) organizations are “civic leagues” that are organized for the purposes of “social welfare;” meaning the common good or general welfare of a community.

501(c)(4) EXPENSES are not tax deductible …except for in very rare cases

Some examples are:

Ø Home owners’ associations,

Ø Veterans’ organizations, and

Ø Organizations that advocate publicly for a specific ideology or set of ideas.

501c4 organizations may engage in unlimited amounts of lobbying for legislation as long as such engagement relates to the exempt purpose.

They may also participate in political campaigns and elections as long as the organization’s primary activity remains the promotion of social welfare.

AN advantage of a 501(c)(4) organization over other political organization is that 501(c)(4)s do not have to disclose their donors at the federal level.

One of the best vehicle for social welfare spending is a 501(c)(4) social welfare organization, which have been around for many, many years prior to Super PACS.

.Article - http://www.hg.org/article.asp?id=28099

Article - http://www.hg.org/article.asp?id=25795

KBLX 102.9 Nonprofit Weekend Tip! How many Nonprofit Board Members are required to sit on the Board?


Lenora Williams: Posted on Saturday, June 22, 2013 7:42 PM

How many members on a board?

There is no agreement on the perfect size for a board.

It is a good practice to have a minimum of 3 different persons serving on your Nonprofit Board at all times But An active, involved board made up of committed people from the community is essential.

Under California law, Less than half of the board of directors of Nonprofit Board can be employees.

Can you be a CEO and a Board member? Yes

Best practice is that organizations NOT have any employees serve on the board TO Avoid confusing the issues of authority and supervision.  

KBLX 102.9 FM Nonprofit Weekend Tip! What is a LOI?


Lenora Williams: Posted on Saturday, June 01, 2013 8:46 AM

What is a LOI?

A LOI is A Letter of Inquiry

Many foundations prefer or even require grant-seeking nonprofits to submit a LOI, or Letter of Inquiry, before sending a complete proposal. The LOI allows the foundation to quickly screen potential candidates for funding, making sure that they do not waste time on ill-conceived ideas or those that do not fit with the foundation's mission. For you, the nonprofit, the LOI is a way to get a invitation from the foundation to submit a complete proposal. Your goal is to get a call from the staff at the foundation, asking for more.

The LOI is the first mandatory step in a competitive grant process. It involves completion of a simple electronic form allowing grant review committees to determine if a project merits further consideration in light of available resources ad current priorities.

Link to a Sample LOI:

https://www.library.pima.gov/grants/grantsletterinquiry.php#sample

KBLX 102.9 FM Radio Nonprofit Weekend Tip! What is a 501c3 Nonprofit Organization and other types of Nonprofits?


Lenora Williams: Posted on Saturday, April 27, 2013 8:48 AM

What is a 501C3 Nonprofit Organization?

501c3s are the following types of organizations:

a) Charitable

b) Educational,

c) Literary,

d) Religious,

e) Scientific,

f) Foundations

They are also:

f) Organizations Concerned with public safety ,

g) Amateur Sports

Programs OR

h) Programs established for the prevention of Cruelty

The Most Common type of Public Charity Organizations are:

Charitable hospitals, churches, medical research centers, educational institutions including schools, colleges and universities,

Other types of Nonprofit organizations that are not 501c3s are:

a) Advocacy groups --- influence the legislation or Government policies on particular issues.

b) Membership Organizations – include: Veteran’s groups, Trade Associations etc.

c) Recreational Clubs – Examples include – country clubs, sports club etc.

d) Auxiliary organizations –The parent organization may be a ‘for-profit’ or a ‘not-for-profit’ organization

e) Employee Benefit Funds - prime objective is to raise funds for employee benefits.

IRS website information:

http://search.irs.gov/search?q=types+of+nonprofits&output=xml_no_dtd&proxystylesheet=irs_portals_frontend&client=irs_portals_frontend&oe=UTF-8&ie=UTF-8&num=10&ud=1&exclude_apps=1&site=default_collection&numgm=5&requiredfields=-archive%3A1

KBLX 102.9 FM Radio Weekend Tip! What are Nonprofit Foundations & how do they benefit others?


Lenora Williams: Posted on Saturday, April 20, 2013 2:25 PM

What are nonprofit foundations and how do they benefit others?

Foundations are established to meet charitable goals by Giving grant money to individuals and supporting institutions

Foundations underwrite the ideas and dreams of others

Foundations generally do not actively or directly engage in actual charitable work

Nonprofit Foundations are listed under the Internal Revenue code as 501C3s:

CAUTION -- Before establishing a foundation … Know in advance all government tax requirements and limitations

SECOND – Spend some time reviewing and considering existing alternatives to creating a Foundation, - Like;

Contributing to existing Donor Advised Funds or Giving Circles that are share similar Values to your Mission

Explore Creating a Charitable trust

OR Collaborate with existing organizations    

KBLX 102.9 FM Radio Weekend Tip! Nonprofit Budget Administrative Overhead/Indirect Cost/Expenses


Lenora Williams: Posted on Saturday, April 13, 2013 1:16 PM

What is Administrative overhead also known as Indirect cost

How do I pay for my non- program expenses; The CEO, My administration team and General expenses for administering program services– Like; business permits, consultants, utilities and accounting All of these costs can be included in your Program Grant applications as Administrative overhead or Indirect cost

Most federal grants will require that you use a federal indirect cost rate which is annually adjusted, reviewed and approved by the federal government

Non-federal grants accept a less complex formula as long as the formula is applied consistently for all funding sources.

Federal Guide for indirect cost rates:

http://www.dol.gov/oasam/programs/boc/costdeterminationguide/cdg.pdf

Non-federal grant formulas

Are less complex and are usually based on a calculation of 15% or less of every revenue source within the agency composite budget - That 15% or less is equal to and based on your defined administrative expenses.

KBLX 102.9 FM Radio Weekend Tip! Why do Nonprofit Boards have Bylaws?


Lenora Williams: Posted on Sunday, April 07, 2013 12:02 AM

What are Bylaws and why are they required?

Nonprofit Board of Directors who adhere to, review, and revise their Bylaws are exercising good governance.

How a Nonprofit Board of Directors is governed is determined by its Bylaws.

A Nonprofit’s Board Of Directors Bylaws are considered a legal document that dictates how the organization must be governed.

A court of law will side with your Bylaws in any dispute.

Your bylaws should deal with only the highest level of governing issues such as:

Organizational purpose, board structure, officer position descriptions and responsibilities, terms of board service, officer/board member succession and removal, official meeting requirements, membership provisions, voting rights, conflict-of-interest policy,...

Board members are legally accountable for following their Bylaws. Failure by a board to follow the stipulations outlined in the bylaws can have devastating consequences.

Bylaws are not a policy and procedure manual but instead a governing guide.

Keep your Bylaws current and relevant to reflect current realities.

"Good governance establishes a foundation for good work"

KBLX 102.9 FM Radio - Nonprofit Weekend Tip! How do you know when your Nonprofit is in Trouble?


Lenora Williams: Posted on Saturday, March 30, 2013 1:36 PM

How do you know when your Nonprofit is in trouble?

A host of nonprofit scandals have eroded public confidence

Trouble begins When the majority of your Board Members do not understand financial reports and know the Bylaws that govern them

Corporate misconduct is another problem area and it has received the greatest attention because the abuses are so wide spread and the costs so enormous.

Many Nonprofit workplaces fail to foster a culture of integrity by Failing to Spend money wisely:

Misappropriation of funds – Usually caused by funding slowdowns – inability to pay payroll taxes and retirement benefits

Creative financing – when restricted funds are used to pay for unfunded expenditures i.e. A program lost its funding but the program staff are still being paid – instead of lay-offs or termination

You must follow the law and do what is ethical. Keep a mindset of “being lean and productive” through constant review and assessment of what is or is not working

Nonprofits are businesses and need to be treated as such

Implement Institutionalize ethical values in all aspects of the organization’s culture.

In addition to your mission statement - Create a simple code of ethic statement no more than 10 words like; “We Lead with and value Integrity” post it everywhere

PREVENTION & EXAMPLES!!!

http://www.hks.harvard.edu/hauser/PDF_XLS/workingpapers/workingpaper_35.pdf

http://www.loansafe.org/ceo-of-ohio-non-profit-corporation-charged-with-filing-false-tax-returns-and-mortgage-fraud

http://www.justice.gov/usao/ks/PressReleases/2012/Aug%202012/Aug22a.html

http://minnesota.cbslocal.com/2012/12/06/audit-nonprofit-director-misused-grant-money/

KBLX 102.9 FM Radio Nonprofit Weekend Tip! Nonprofits with Calendar Fiscal Years (Jan - Dec) - It's Tax season. Your 990 Tax Form is due May 15


Lenora Williams: Posted on Saturday, March 16, 2013 9:24 AM

Re-Blog -- 990 Tax form requirements for Nonprofits

Every year as a nonprofit, unless your revenue is less than $25,000 you are responsible for filing a tax form 990 with IRS

There are large penalties for not filing on time, the penalties can range from $25 - $100/day depending on your gross receipts (to a maximum of $10,000 or 5percent of its gross receipts for the year, whichever is less)

All nonprofits with revenue exceeding $25,000 must file their form 990 – On the 15th day of the month, 5 months after the close of their fiscal year.

For example, if your fiscal year is;

January 1st through December 31st you must file your 990 by May 15 or

If your fiscal year is July 1st through June 30th you must file your 990 by November 15

EXTENSIONS:

You can request and be given two (2) - Three (3) month extensions for a total of Six (6) months

The IRS 2012 (and all annual) form 990 can be found here -

http://www.irs.gov/pub/irs-pdf/f990.pdf

KBLX 102.9 FM Radio Nonprofit Weekend Tip - Creating Nonprofit Budget Expenditure Line Items


Lenora Williams: Posted on Saturday, March 09, 2013 8:17 AM

What does the Expenditure section look like in a Nonprofit Budget?

Nonprofit budget expenditures have 2 basic components:

Payroll expenses (which are usually 60 -80 percent of most nonprofit budgets) and

Operation and maintenance expenditures

Nonprofit Budget Payroll expenses

include gross salaries plus projected merit or cost of living increases. Nonprofit budgeted Salaries have an additional component called

Fringe Benefits - which include the estimated expenses for;

payroll taxes,

worker’s compensation,

supplemental insurance (like health insurance),

employee benefits &

retirement plans

Nonprofit Budget operation and maintenance expenditures – include expenses like:

rent,

supplies,

equipment, communication (phones & Internet services),

printing and duplicating,

advertising and marketing,

audits and

others expense items (depending on program and administration needs) 

KBLX 102.9 FM Radio Weekend Tip - How to Create a Nonprofit Revenue Budget


Lenora Williams: Posted on Saturday, March 02, 2013 10:33 AM

What does the Revenue section look like in a Nonprofit Budget?

Nonprofit revenue can be defined in 3 basic ways:

Carry-forward Income,

Earned Income &

Contributed Income:

Carry-forward income -(dollars available beyond your annual fiscal year)

Example:

Your fiscal year is July 1 - June 30 but the Grant year is September 1 - August 31 -- There are two (2) months remaining in the Grant year after the close of your fiscal year June 30 - Those 2 months are July and August. You only had 10 months of grant revenue used, you still have remaining two (2) months - That remaining 2 months of revenue would be considered carry-forward into your new fiscal year.

Definition of Earned Income

Government grants and contracts, HRSA, Ryan White, Head start,...

Fee for service (3rd party reimbursements i.e. Medicare, Medical & Patient fees)

Service contracts

Interest, investment income

Rental Income (equipment property)

Business income

Definition of Contributed Income

Fundraising dollars

Pledges, donations & gifts

Planned gift giving like; bequests, direct mail , phone banks, ...

Membership dues

Foundation funds

Corporation funds

Church & Civic Group funds

KBLX 102.9 FM Radio - Nonprofit Weekend Tip! What are the components of a quality Nonprofit Budget?


Lenora Williams: Posted on Saturday, February 23, 2013 8:22 AM

What are the components of a quality Nonprofit Budget?

There are 2 essential sections: Revenue & Expenditures

1. Revenue is by type --- Donations, grants, and other income sources…

2. Expenditures are line item expenses and have 3 components:

Component 1---Salaries; Salary section is in 2 parts

a. Gross salaries

b. Fringe benefits (payroll taxes, health benefits, retirement, worker’s compensation,..) NEXT ·

Component 2-----Operation and Maintenance (list of expenses) ·

Component 3 -----Administration Overhead also known as Indirect Cost

See my Blog on Nonprofit Budget Templates ...

KBLX 102.9 FM Radio - How to Dissolve Your Nonprofit Corporation?


Lenora Williams: Posted on Saturday, February 16, 2013 8:49 AM

You cannot just walk away from your nonprofit –To close your Nonprofit correctly you MUST dissolve the corporation

How do you dissolve your Nonprofit?

Your Board must vote on a resolution to wind up and dissolve the corporation

You must file your final State & Federal tax returns

You must obtain the Attorney Generals approval to dispose of any assets

Finally you must submit a Final Notice of Submission of Closure to the Secretary of State and the Attorney General’s offices

http://oag.ca.gov/sites/all/files/pdfs/charities/publications/dissolving.pdf http://oag.ca.gov/sites/all/files/pdfs/charities/publications/dissolving.pdf

Researched information from IRS & State of California websites (verbatim):

1. VOTE BY NONPROFIT BOARD OR MAJORITY OF CORPORATION’S MEMBERSHIP T O DISSOLVE AND PREPARE CERTIFICATE OF ELECTION TO WIND UP AND DISSOLVE (IF APPLICABLE) AND/OR A CERTIFICATE OF DISSOLUTION

2. FILE FINAL STATE TAX RETURN AND VERIFY CURRENT STATUS WITH FRANCHISE TAX BOARD However, dissolution documents cannot be filed on behalf of a suspended corporation.

3. OBTAIN DISSOLUTION WAIVER FROM THE ATTORNEY GENERAL ’S OFFICE BEFORE DISPOSING OF ANY REMAINING ASSETS

A. LETTER SIGNED BY A DIRECTOR OF THE CORPORATION, OR ITS ATTORNEY, DETAILING ALL INDIVIDUALS OR GROUPS WHO WILL BE RECEIVING THE CORPORATION’S REMAINING ASSETS.

If no assets remain for distribution, that information must be provided in a letter. For each intended recipient, the letter must provide:

♦ Recipient’s Full Legal Name, Address, Telephone Number; Corporate Number; and FEIN, if any

♦ Itemized listing of assets to be distributed, by type and value

♦ Proposed date of distribution

♦ Any restrictions on the use of the assets to be distributed ♦ Recipient’s Articles of Incorporation or trust instrument

B. SIGNED COPY OF CERTIFICATE OF ELECTION TO WIND-UP AND DISSOLVE and/or SIGNED CERTIFICATE OF DISSOLUTION PREPARED FOR SUBMISSION TO THE SECRETARY OF STATE.

C. COPY OF THE CORPORATION’S IRS FORM 990, FORM 990-EZ or FORM 990-PF FOR THE LAST THREE (3) ACCOUNTING PERIODS.

If the corporation does not file one of these informational returns, it must submit financial statements showing receipts and disbursements, and a balance sheet, for the three (3) most current accounting periods, as well as financial statements for the incomplete accounting period.

ASSETS MUST BE DISTRIBUTED IN ACCORDANCE WITH ARTICLES OF INCORPORATION AND BY-LAWS OF DISSOLVING CORPORATION, AND ARE SUBJECT TO ANY TRUST UNDER WHICH THE ASSETS ARE HELD. THE INTENDED RECIPIENT OF ASSETS MUST:

• HAVE THE SAME IRS EXEMPTION AS STATED IN THE DISSOLUTION CLAUSE OF THE DISSOLVING CORPORATION’S ARTICLES OF INCORPORATION;

• BE CURRENT IN REPORTING OBLIGATIONS TO THE ATTORNEY GENERAL’S REGISTRY OF CHARITABLE TRUSTS, IF REQUIRED TO REGISTER AND REPORT.

D. ENDORSED-FILED COPY OF CORPORATION’S ARTICLES OF INCORPORATION, INCLUDING ANY AMENDMENTS.

4. SUBMIT FINAL NOTICE OF SUBMISSION T O THE SECRETARY OF STATE’S OFFICE

5. SUBMIT FINAL NOTICE OF SUBMISSION T O THE ATTORNEY GENERAL’S OFFICE Mail the final dissolution packet to the Attorney General’s Office, to the attention of: the Registry of Charitable Trusts. The packet should contain:

(a) a copy of the Certificate of Dissolution endorsed (stamped) by the Secretary of State; and

(b) the final financial report for the corporation showing that all assets were distributed properly, resulting in a zero balance.

ASSETS MUST BE DISTRIBUTED IN ACCORDANCE WITH ARTICLES OF INCORPORATION AND BY-LAWS OF DISSOLVING CORPORATION, AND ARE SUBJECT TO ANY TRUST UNDER WHICH THE ASSETS ARE HELD. THE INTENDED RECIPIENT OF ASSETS MUST:

• HAVE THE SAME IRS EXEMPTION AS STATED IN THE DISSOLUTION CLAUSE OF THE DISSOLVING CORPORATION’S ARTICLES OF INCORPORATION;

• BE CURRENT IN REPORTING OBLIGATIONS TO THE ATTORNEY GENERAL’S REGISTRY OF CHARITABLE TRUSTS, IF REQUIRED TO REGISTER AND REPORT.  

KBLX 102.9 FM Radio Weekend Tip! Can Mergers occur in the Nonprofit world?


Lenora Williams: Posted on Saturday, February 09, 2013 3:18 AM

Nonprofit Mergers

Mergers can occur in the nonprofit world. Nonprofits can merge programs and entire organizations with other like nonprofits

The questions are simple; is the nonprofit a good fit, can you expand your mission and services in the areas you have defined, do you share a mission and vision, are your boards going to be strengthened, will your funding expand, can you protect your reputation and brand & how successful can you be with staff buy-in and support?

If so, a Nonprofit merger is worth exploring

Researched materials and links:

http://www.burlingtonassociates.com/files/2513/4463/1037/1-Making_of_a_Nonprofit_Merger.pdf - The Making of a Nonprofit Merger Bridging the Organizational Divide by John Emmeus Davis, Founder

Excerpt from Bridgespan’s Publication “The troubled economy has put merging with or acquiring another organization front and center on the radar for the senior managers of many struggling nonprofits. Indeed, a Bridgespan Group poll of nonprofit executive directors found that 20 percent of 117 respondents stated that mergers could play a role in how they respond to the economic downturn. These leaders may consider mergers and acquisitions (M&A) re-actively, as a way to shore up finances, to make their organizations appear more attractive to funders or to address a succession vacuum. But the time is also ripe for the leaders of healthy organizations to consider M&A proactively—as a way to strengthen effectiveness, spread best practices, expand reach and—yes—to do all of this more cost-effectively, making best use of scarce resources. Unfortunately, few organizations or funders think of M&A in this way.” By bridgespan.org/Publications-and-Tools/Funding-Strategy/Nonprofit-Mergers-and-Acquisitions

http://nonprofitfinancefund.org/files/images/initiatives/aboutmergers_mapnonprofits.pdf

“Methods for classifying and defining mergers and strategic restructuring Structural realignments of nonprofit organizations are often grouped into alliances, which do not involve change to the corporate structure, or integrations, which do. They include management service organizations, joint ventures, parent/subsidiary relationships, and mergers. For purposes of this research study, a merger is defined as an integration or combining of two or more separate organizations into one legal entity. Under this definition, program, administrative, and governance functions are all combined.”By Joint research project of MAP for Nonprofits and Wilder Research March 2011

KBLX 102.9 FM Radio Weekend Tip! What are MOUs and Why do Nonprofits use them?



Lenora Williams: Posted on Saturday, February 02, 2013 10:43 AM

MOUs (Memorandums of Understanding)

Memorandums of Understanding – MOUs are Nonprofit formal gentlemen agreements just shy of a formal contract MOUs are visible and responsive partnership agreements that define a joint endeavor between one or more partiesParties demonstrate administrative and management commitment MOUs have defined goals and objectives with a framework for achieving specific activities and services MOUs have Commitments by all parties to provide financial, material and labor resources to assist with the agreed upon project Why an MOU? Because there are some agreements that can be made without requiring a formal contract and are compliant and beneficial to the spirit of partnership

Researched Definitions and links:

“It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement. It is a more formal alternative to a gentleman's agreement.”

“Memorandum of Understanding identifies the common goals, responsibilities and anticipated contributions to a future project or joint endeavor. A Memorandum of Understanding does not create a legally binding obligation for either party. A Memorandum of Understanding may be used to clarify the agreement of parties on certain aspects of a project while negotiations continue in regards to the remaining terms of the agreement. It is the anticipation that the parties will work to finalize negotiations and complete a Contract or Agreement which will then become binding upon the parties. This Memorandum of Understanding identifies the project being completed, the services each party will provide and the financial, material and labor contributions.” https://www.rocketlawyer.com/secure/interview/new.aspx?id=1708&utm_source=103&try=1&v=3&gclid=CMv5jK_s_bQCFUdxQgodzX8A9g#q1

“A Memorandum of Understanding (MOU) is a document that describes or provides a framework for a potential agreement between two or more parties. This Memorandum of Understanding can be used to provide a successful framework for future undertakings between two or more parties.” http://premium.docstoc.com/doccomplete?docId=130399721&pr=t&utm_source=google&utm_medium=cpc&utm_term=Memorandums%20of%20understanding&utm_campaign=completion_pre&gclid=COeN4LPt_bQCFSXZQgodDF0Akg# Sample MOU - http://www.ovw.usdoj.gov/docs/sample-mou.pdf  

KBLX 102.9 FM Weekend Nonprofit Tip! When to choose a Single Audit or External CPA firm Expert Opinion


Lenora Williams: Posted on Saturday, January 19, 2013 10:09 AM

NONProfits are sometimes required to have formal outside audits?

Audits build donor confidence and increase protection against fraud.

If you have $500,000 or more a year in Federal grant expenses – You are required to have an outside audit - ‘ a single audit' to test for compliance

States have varying audit threshold requirements – You must contact the state you receive grant dollars from to obtain their audit requirements

Many foundation funders ask for an annual audit as a condition of funding.

A Nonprofit may elect to have an external CPA firm provide an Expert Written Opinion Rather than a full-blown audit  

KBLX 102.9 FM Radio Nonprofit Weekend Tip! Collaborations-Working Together!


Lenora Williams: Posted on Saturday, December 01, 2012 1:35 PM

Back full circle the term Collaboration

Rapid growth in the number of nonprofits across the country and the limited number of resources to support them forces the necessity for collaborations.

The most important tool nonprofits can utilize today is -- Collaboration

While many nonprofits are tired of hearing funders talk about partnership and collaboration. In this day and age, with this economic climate, you can't afford not to collaborate.

Foundations are partnering with other community foundations

“When relationships are well defined - Strong collaborations are mutually beneficial ......Two or more organizations can achieve a common goal, SUSTAINABILITY”

KBLX 102.9 FM Weekend Tip - Nonprofit Facility Purchase - Enhance Capital Campaign Strategies-Enterprise Zones/Tax Exempt Bonds


Lenora Williams: Posted on Saturday, November 17, 2012 10:25 AM

Enterprise zones and Tax-Exempt Bonds are ways for nonprofits to look at purchasing facilities:

California provides for special tax incentives to encourage investment in specific geographic areas targeted for economic revitalization –-- Called Enterprise Zones

Banks or Lenders and Property Owners Leasing to nonprofits in Enterprise Zones -- Receive net interest deductions

Creating incentives for both Lenders and Owners to work with nonprofits

Tax-exempt bonds are similar to conventional loans but are costly to set up.

Interest income earned is exempt from state and local taxes which allow the lender to pass savings to the nonprofit borrower in the form of lower interest rates.

TAX NEWS FROM THE CALIFORNIA FRANCHISE TAX BOARD

https://www.ftb.ca.gov/professionals/taxnews/2009/July/Article_1.shtml

California provides for special tax incentives to encourage investment in specific geographic areas targeted for economic revitalizing called Enterprise Zones within the state. One of these incentives is the net interest deduction. It is available to banks and other lenders. The requirements are simple. If a bank or lender makes a qualified loan to a qualified debtor, it is allowed to deduct the net interest received from such loan against its California taxable income.To be a qualified transaction, the loan must be made to a debtor that is engaged in a “trade or business” in an Enterprise Zone. The term “trade or business” is generally defined for tax purposes as “an activity engaged in forprofit.” When a bank or lender makes an otherwise qualified loan to a nonprofit organization, the question arises as to whether a nonprofit is engaged in a trade or business, and thus considered to be a qualified debtor for the purposes of the net interest deduction.

In the past, we disallowed debts made to nonprofit organizations based on the general presumption that nonprofit organizations are not engaged in a trade or business as defined under various tax provisions in the Internal Revenue Code and the California Revenue and Taxation Code.

However, California recently revised this policy based on statutory authority in the California Corporation Code that suggests a nonprofit could be recognized as being engaged in a trade or business. The California Corporation Code which governs nonprofit entities affirms the nonprofit’s right to “carry on a business at a profit,”and use that profit for any lawful activity.” Many nonprofit organizations accept donations, conduct fundraising activities, or charge fees. This revenue is used to sustain the organization, pay salaries, interest, fund capital improvements, expansions, etc. These activities are similar to a trade or business engaged to earn a profit.

Therefore,qualified loans made to nonprofit organizations can qualify for the Enterprise Zone net interest deduction if the debtor meets all the other required qualifications.

Tax-Exempt Bonds

Tax-exempt, industrial-revenue bond (IRB) programs are attractive financing options for small manufacturers looking to expand operations and upgrade facilities.What is a Tax-Exempt Bond?Tax-exempt bonds are debt securities issued by a state or local government development agency on behalf of a private business. Once issued,tax-exempt bonds are sold in the open market or purchased by investors or financial institutions. Interest income earned by the bond purchaser is exempt from state and local taxes, which allows the lender to pass savings to the borrower in the form of lower interest rates.Tax-exempt bonds are similar to conventional loans.

Bonds are not grants. Borrowers have to pay back the bond’s principal plus interest to the bond. Applicants have to demonstrate a strong business plan and project proposal, credit worthiness and strong financial statements. In addition,borrowers have to demonstrate how proposed projects will create jobs and positively impact the local economy. Unlike conventional loans, tax-exempt bonds typically offer longer-term financing at considerably lower rates than conventional financing allows.Tax-exempt bonds are not for modest projects. Typically dollars, but smaller, mini-bonds may be issued. In addition, the costs associated with tax-exempt bonds tend to be much higher than conventional loans because the business has to pay its own legal costs.

Carefully consider, bonds are intended to fund projects over a million r your financing needs and your ability to pay tens of thousands of dollars in legal fees before jumping into tax-exemptbonds.What are the Eligibility Requirements? Tax-exempt bonds are intended to create jobs and improve economic conditions in local areas. Businesses eligible for tax-exempt bonds include manufacturing businesses and non-profit organizations. Tax-exempt bonds of up to $10 million can be issued to finance up to 100% of an eligible project.

Eligible users of the funds include expanding facilities and purchasing new machinery and equipment.

Tax-exempt, RIB funds may not be used to refinance existing debt or for venture and working capital.

Other special conditions and terms may vary depending on where your business is located.What is the Application Process? Application requirements and processes vary by state and locality.

Contact your state or local economic development agency to obtain information about available tax-exempt bonds.

Where Can I Read Success Stories? Tax-exempt bonds have been used to successfully expand small businesses and create jobs in communities across the country. Here are some examples:

State of California Success Stories

Pinellas County, Florida - Success Stories

City of Albuquerque, New Mexico – Success Stories

KBLX 102.9 FM Radio Weekend Tip - Nonprofit Fundraising


Lenora Williams: Posted on Saturday, November 03, 2012 7:34 AM

Nonprofit Fundraising

KBLX 102.9 FM Radio Nonprofit Weekend Tip!

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Traditional nonprofit fund raising consist of ; Individual giving, Fundraising Events, Direct mailing (snail mail), and Grant Writing

Dwindling funds however require creative thinking, a paradigm shift, stepping outside the box of fund raising traditions and testing new methods of raising money

Today every nonprofit must expand its fund raising methods by trying new approaches ... CASH is Critical

But do not over look the other very valuable resources; people skills;contractors, carpet layers, painters, mechanics, caterers, bankers and more that bring cash valued resources and their professional contacts which add value to your nonprofit. By using human resources you can put together a network of people who will provide needed resources and who will form networks to further support your organization.

Social media campaigns and merchandise sales are used by many nonprofits today to raise funds. Before selling items make sure you are in compliance with Nonprofit government tax laws and you are filing the appropriate tax forms in addition to your 990.

http://www.thefund raisingauthority.com/fundraising-basics/how-to-ask/:written by Joe Garecht

“The answer is Creativity – stepping outside the box and testing new methods of raising money for your organization. Not every tactic will work for every group, so testing is key, but every charity should be constantly expanding its fund raising repertoire and testing new tactics.”

· Target smaller givers

· Massive outreach using social media emphasizing smaller giving amounts (an example; the penny drives, nickel drives, dollar drives using large water cooler bottles in strategic locations where young people as well as older adults could participate … social media can be used to create the same scenario)

Some Fundraising Tips found online:

http://www.frogloop.com/care2blog/2012/1/13/steal-these-42-creative-pinterest-ideas-for-nonprofits.html

http://www.signupgenius.com/nonprofit/50-creative-and-easy-fund raising-ideas.cfm 

KBLX 102.9 FM Radio - Essential Nonprofit Insurances


Lenora Williams: Posted on Saturday, November 10, 2012 9:45 AM

Essential Nonprofit Insurances

KBLX 102.9 FM Radio Nonprofit Weekend Tip

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There are specific Insurances that all Nonprofits should have – some more important than others:

General Liability Insurance – which protects from slip and falls

Property Insurance – whether the nonprofit rents or owns – to protect the property against fire, vandalism, earthquake and more

Auto liability Insurance – covers you or your staff while carrying out the organizations business while driving their car or the agency's car

Product liability Insurance – if the nonprofit sells products to the public

Directors and Officers Insurance – to protect the Board of Directors

Professional Liability Insurance - protect against liabilities resulting from mismanagement of the organization

There are Insurance companies that specifically cater to Nonprofit organizations and understand nonprofit funding concerns.

KBLX 102.9 FM Radio Nonprofit Weekend Tip! Are Churches & Religious Organizations Nonprofits?


Lenora Williams: Posted on Saturday, October 27, 2012 8:00 AM

KBLX 102.9 FM Radio NonProfit Weekend Tip!

Are Churches Nonprofits?

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The IRS lists organizations that are qualified to receive

tax-deductible contributions in IRS Publication 78,

Cumulative List of Organizations Described in Section

170(c) of the Internal Revenue Code of 1986.

Automatic Exemption for Churches

“Churches that meet the requirements of IRC section

501(c)(3) are automatically considered tax exempt and

are not required to apply for and obtain recognition of

tax-exempt status from the IRS.”

“Contributors to a church that has been

recognized as tax exempt should reasonably assume that their contributions

generally are tax-deductible.”

Churches with Parent Organizations or affiliated with or a part of a Larger Organization

“A church with a parent organization should contact

the parent organization to see if it has a group ruling. If the parent

holds a group ruling, then the IRS may already recognize

the church as tax exempt.”

“Under the group exemption process, the parent organization

becomes the holder of a group ruling that identifies other

affiliated churches or other affiliated organizations.”

“A church is recognized as tax exempt if it is included in a

list provided by the parent organization. If the church or other affiliated

organization is included on such a list, it does not need to take

further action to obtain recognition of tax-exempt status."

Religious Organizations that are not Churches

“Religious organizations that

are not churches typically include nondenominational

ministries, interdenominational

and ecumenical organizations, and

other entities whose principal purpose is

the study or advancement of religion.”

“Unlike churches, religious organizations that wish

to be tax exempt generally must apply to the IRS for

tax-exempt status unless their gross receipts do not

normally exceed $5,000 annually.”

KBLX Weekend Tip! How to find out if a Nonprofit has Tax Exempt Status?


Lenora Williams: Posted on Saturday, October 06, 2012 7:26 AM

KBLX 102.9 FM Nonprofit Weekend Tip!

How to find out if a Nonprofit is Active or Inactive?

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IS THE NONPROFIT ACTIVE OR INACTIVE?

What is the Nonprofit's tax exempt status?

You can find out the active or inactive status of your Nonprofit or the status of a Nonprofit you would like to work with?

IRS provides a list of approved nonprofit organizations that are qualified to receive tax-deductible contributions

Where can you find this information? Go online to IRS.Gov Publication 78 http://apps.irs.gov/app/eos/pub78Search.do?searchChoice=pub78&dispatchMethod=navigateSearch&pathName=forwardToPub78Search&submitName=Return+to+Search

You will have to fill in………..

Your – EIN #

or

The legal Name of the Nonprofit as it appears in the Articles of Incorporation

For additional accuracy you will be asked to complete the; City, State, and

Country the Nonprofit was started in. The more information you provide the more accurate the results.

If your Nonprofit is not listed and is inactive there are ways to return you’renonprofit to an Active status.  

KBLX Weekend Tip! Nonprofit Conflict of Interest Policy & Agreements


Lenora Williams: Posted on Friday, October 12, 2012 9:40 PM

KBLX 102.9 FM Nonprofit Weeked Tip!

Conflict of Interest Policy & Agreements

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All Nonprofits are required to have a Conflict of Interest Policy

Signed Board Member & Management staff Conflict of Interest agreements

A Conflict of interest policy is designed to protect the financial interest of the nonprofit - All direct business transactions that may benefit individuals governing or executives running your nonprofit are required disclosures in their signed Conflict of Interest Agreements.

Auditors are required to check that Nonprofits have a Conflict of Interest Policy and signed agreements in place.

More info ........

IRS Instructions for Form 1023 - Additional Material on Conflict of Interest http://www.irs.gov/instructions/i1023/ar03.html

IRS Nonprofit Conflict of Interest DETAILas follows:

(Scroll down for a SUMMARY and sample “Conflict of Interest Policies”)

"Appendix A: Sample Conflict of Interest PolicyNote: Items marked Hospital insert - for hospitals that complete Schedule C are intended to be adopted by hospitals.

Article I Purpose

The purpose of the conflict of interest policy is to protect this tax-exempt organization's (Organization) interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director of the Organization or might result in a possible excess benefit transaction. This policy is intended to supplement but not replace any applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations.

Article II Definitions

1. Interested PersonAny director, principal officer, or member of a committee with governing board delegated powers, who has a direct or indirect financial interest, as defined below, is an interested person.

[Hospital Insert - for hospitals that complete Schedule C

If a person is an interested person with respect to any entity in the health care system of which the organization is a part, he or she is an interested person with respect to all entities in the health care system.]

2. Financial InterestA person has a financial interest if the person has, directly or indirectly, through business, investment, or family:

a. An ownership or investment interest in any entity with which the Organization has a transaction or arrangement,

b. A compensation arrangement with the Organization or with any entity or individual with which the Organization has a transaction or arrangement, or

c. A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Organization is negotiating a transaction or arrangement.

Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.

A financial interest is not necessarily a conflict of interest. Under Article III, Section 2, a person who has a financial interest may have a conflict of interest only if the appropriate governing board or committee decides that a conflict of interest exists.

Article III Procedures

1. Duty to Disclose

In connection with any actual or possible conflict of interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the directors and members of committees with governing board delegated powers considering the proposed transaction or arrangement.

2. Determining Whether a Conflict of Interest Exists

After disclosure of the financial interest and all material facts, and after any discussion with the interested person, he/she shall leave the governing board or committee meeting while the determination of a conflict of interest is discussed and voted upon. The remaining board or committee members shall decide if a conflict of interest exists.

3. Procedures for Addressing the Conflict of Interest

a.An interested person may make a presentation at the governing board or committee meeting, but after the presentation, he/she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest.

b.The chairperson of the governing board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.

c. After exercising due diligence, the governing board or committee shall determine whether the Organization can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest.

d. If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the governing board or committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in the Organization's best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination it shall make its decision as to whether to enter into the transaction or arrangement.

4. Violations of the Conflicts of Interest Policy

a. If the governing board or committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose.

b. If, after hearing the member's response and after making further investigation as warranted by the circumstances, the governing board or committee determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.

Article IV Records of Proceedings

The minutes of the governing board and all committees with board delegated powers shall contain:

a. The names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the governing boards or committee's decision as to whether a conflict of interest in fact existed.

b. The names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.

Article V Compensation

a. A voting member of the governing board who receives compensation, directly or indirectly, from the Organization for services is precluded from voting on matters pertaining to that member's compensation.

b.A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization for services is precluded from voting on matters pertaining to that member's compensation.

c. No voting member of the governing board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization, either individually or collectively, is prohibited from providing information to any committee regarding compensation. [Hospital Insert - for hospitals that complete Schedule C

d. Physicians who receive compensation from the Organization, whether directly or indirectly or as employees or independent contractors, are precluded from membership on any committee whose jurisdiction includes compensation matters. No physician, either individually or collectively, is prohibited from providing information to any committee regarding physician compensation.]

Article VI Annual Statements

Each director, principal officer and member of a committee with governing board delegated powers shall annually sign a statement which affirms such person:

a. Has received a copy of the conflicts of interest policy,

b. Has read and understands the policy,

c. Has agreed to comply with the policy, and d. Understands the Organization is charitable and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.

Article VII Periodic Reviews

To ensure the Organization operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted. The periodic reviews shall, at a minimum, include the following subjects:

a. Whether compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arm's length bargaining.

b. Whether partnerships, joint ventures, and arrangements with management organizations conform to the Organization's written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes and do not result in increment, impermissible private benefit or in an excess benefit transaction.

Article VIII Use of Outside Experts

When conducting the periodic reviews as provided for in Article VII, the Organization may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the governing board of its responsibility for ensuring periodic reviews are conducted." SummaryAll nonprofits as required by the new 990 process, must have a written conflict of interest policy and a process for managing conflicts.Some Sample Conflict of Interest Policies and Implementation Process: (this information is available to you online – I and others have consolidated the information for easy access) ·

The National Council of Nonprofits offers a sample policy at the following web site: http://www.councilofnonprofits.org/?q=conflict-ofinterest·

A sample conflict of interest policy is contained in The AICPA Audit Committee Toolkit. (American Institute of Certified Public Accountants, 2005 http://www.aicpa.org/audcommctr/toolkitsnpo/Independence_and_Related_Topics.htm·

A sample policy from the conflict of interest policy developed by the Minnesota Council of Nonprofit Organizations is from the Minnesota Attorney General's Office web site, the link below is the sample policy. http://www.ag.state.mn.us/pdf/charities/ConflictInterestPolicy.pdf

KBLX Weekend Tip - Can Nonprofits 501C3s Lobby, Impact Legislation?


Lenora Williams: Posted on Saturday, September 29, 2012 8:09 AM

KBLX Weekend Tip - Can Nonprofits 501C3s Lobby, Impact Legislation?

A small amount of Nonprofit Lobbying Activities are acceptable but Substantial Lobbying Activity is not

In general, no organization, including a church, may qualify for NONPROFIT 501(c)(3) status if a substantial part of its activities is attempting to influence legislation - which is commonly known as lobbying

501(c)(3)organizations may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status AND possible penalty PAYMENTs

http://www.irs.gov/pub/irs-pdf/p4221pc.pdf

Political Campaign Intervention (pages 5 - 9)

Additional notes from the IRS.Gov websites:

http://www.irs.gov/pub/irs-pdf/p1828.pdf

For Churches and other religious organizations ( Pages 7-13)

"Measuring Lobbying ActivitySubstantial part test. Whether a church’s or religious organization’s attempts to influence legislation constitute a substantial part of its overall activities is determined on the basis of all the pertinent facts and circumstances in each case. The IRS considers a variety of factors,including the time devoted (by both compensated andvolunteer workers) and the expenditures devoted by theorganization to the activity, when determining whether the lobbying activity is substantial." according to the IRS.Gov publication p1828 http://www.irs.gov/pub/irs-pdf/p1828.pdf

"A church or religious organization that conducts excessive lobbying activity in any taxable year may lose its tax-exempt status,resulting in all of its income being subject to tax." according to the IRS.Gov publication p1828

http://www.irs.gov/pub/irs-pdf/p1828.pdf

KBLX 102.9 FM radio Weekend Nonprofit Tip! What are WhistleBlowers and Do they exist in the Nonprofit world?


Lenora Williams: Posted on Saturday, September 22, 2012 8:37 AM

KBLX 102.9 FM radio Weekend Nonprofit Tip! What are whistle blowers and Do they exist in the Nonprofit world?

Weekend Nonprofit Pointers!

Who are Whistle Blowers? on KBLX 102.9 FM radio Sat, September 22 at any of the following times (central time) 9:59 am, 11:27 am, 12:26 pm or 1:25 pm.

Twitter hashtag #nonprofit411

facebook page: WilliamsLLpostnonprofitcorner

Whistle Blowers

Who are Whistle Blowers for Nonprofits?

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Nonprofits must be compliant with government laws to avoid prosecution – Since the Enron scandal the government has hired more watchdogs to protect public funds and insiders who report suspicious activity/Whistle Blowers are being heavily protected by the government. In 2004 the Nonprofit Integrity Act was enacted in the State of California, requiring that nonprofits have stronger State and federal reporting requirements. The Federal Office of the Inspector General has developed 7 elements of a strong nonprofit compliance Program

Please read my BLOG Post (on this website in the BLOG section) on the 7 elements of a strong nonprofit compliance Program

KBLX 102.9 FM radio Weekend Nonprofit Tip! Starting a Nonprofit


Lenora Williams: Posted on Saturday, September 15, 2012 6:44 AM

KBLX 102.9 FM radio Weekend Nonprofit Tip! Starting a Nonprofit

Weekend Nonprofit Pointers!

What do you need to start a Nonprofit? on KBLX 102.9 FM radio Sat, September 15 at any of the following times (central time) 10:58 am, 11:57 am, 1:29 pm or 2:58 pm.

Twitter hashtag #nonprofit411

facebook page: WilliamsLLpostnonprofitcorner

The cost for starting a nonprofit in California –

The costs range from approximately $500 to $1,500.

What are the steps for filing?

You must file for a Name, your Articles of Incorporation, create an Employer Information Number, Complete a federal application Form 1023 and a State of California application form 3500. Write your Bylaws, rules for how the the Nonprofit will managed or governed.

How long will it take?

Anywhere from 3 months to 1 year, if everything is completed correctly.

KBLX Weekend Tip - Why Nonprofit Board of Directors?


Lenora Williams: Posted on Saturday, September 08, 2012 7:18 AM

Nonprofit Board of Directors

Nonprofits are not privately owned.

While the nonprofit may be your personal mission, your ideas have to be shared by others and those individuals have to help you manage your nonprofit.

Hence the creation of a Board of Directors and odd number of multi-talented individuals who create a group that will help you push the nonprofit forward.

The selection of Board members is a critical process for your organization. Nonprofit board members should be powerful movers and shakers in the community. They need to be in line with the agency’s vision, understand the agency’s finances and have as a mission to raise funds for the organization: For more information tweet me @nonprofit 411 or call me at (510) 469-6264

KBLX Weekend Info Tip - Saturday, 8/25 between 10 am- 2:30 pm


Lenora Williams: Posted on Saturday, August 25, 2012 10:24 AM

Check out KBLX 102.9 FM Radio for My Nonprofit Weekend Tips - This weekend's Nonprofit Info Tip,Saturday,August 25. This Tip is on the "Integrity Act" - government filing requirements for nonprofit organizations (I talked about it last week but the spot did not air last week - read my Integrity Act Blog). You can hear the information in the morning or early afternoon, the information will stream on the KBLX website.

Check it out and let me know your thoughts;

Twitter @nonprofit411

write on my facebook page; WilliamsLLpostnonprofitcorner

email me: [email protected]

call (510) 469-6264

KBLX 102.9 FM Radio Nonprofit Info Interview Aug 18 & 19, 2012


Posted on Saturday, August 18, 2012 2:29 AM

KBLX 102.9 FM Radio Nonprofit Info Interview August 18 & 19, 2012

Download the KBLX 102.9 application for free and listen to the interview on Nonprofits on Saturday, August 18, 2012 at 5:30 AM Central Time and Sunday, August 19, 2012 at 7:30 AM Central time.

Interview with KBLX radio host Nikki Thomas on Nonprofit Start-Up, Sustainability and response to general questions.

Send us your questions and your feedback:

twitter @nonprofit411

Like our facebook page - WilliamsLLPostNonprofitCorner

Make a comment on our Blogs or email us at [email protected]

KBLX Weekend Nonprofit Tip Fiscal Sponsors[Sponsorships


Lenora Williams: Posted on Friday, July 15, 2011 1:43 AM

KBLX 102.9 FM Radio (Northern California) Weekend Nonprofit Tip Fiscal Sponsors[Sponsorships

Fiscal Agents and Fiscal Sponsorships

When a charity corporation manages all or a portion of the funds for a community organization that conducts a charitable program but has not completed the full process of becoming a 501c3 (or like nonprofit corporation), that organization can choose to use a fiscal agent/fiscal sponsor, the purpose of a fiscal agent/fiscal sponsor is to allow the community organization without the 501c3 status to collect grants and donations from its supporters and have its supporters receive tax write offs for their contributions.

Is this legal? Yes

There are nonprofit corporations whose sole mission is to act as a fiscal agent/fiscal sponsor for a temporary period while the community organization is in the process of applying for its 501c3, before the new community based organization obtains its own tax exemption. Of course, the nonprofit organizations acting as fiscal agent/fiscal sponsor can charge a fee of upwards of 15% of the non tax exempt community based organization’s revenue to provide their service.

KBLX Weekend Tip! Bridge Loan Funding continued...


Lenora Williams: Posted on Friday, August 10, 2012 11:37 PM

KBLX Weekend Tip! Bridge Loan Funding continued...

Bridge Loan Funding

Emergency Gap funding, Bridge Loans are available for nonprofits in need of short term lending. Bridge Loans are made on a short-term basis in anticipation of guaranteed permanent or long-term funding. They are usually loans made against contract receivables or capital campaign pledges, and they are expected to be repaid as the receivables or pledges are collected. Nonprofit bridge loans usually have low interest.

Line of Credit

It is very important while you are in good standing with your finances with your bank that you implement a Line of Credit. Establish the Line of Credit in healthy financial times and you will be able to weather the bad times with access to the Line of Credit which acts as Bridge Loan funds. Be sure to pay down the line of credit with unrestricted funds (see my Blog on the definition of Unrestricted funds). Renew your Line of Credit annually. Try to establish the largest amount available for the Line of Credit to allow for a good business credit rating. CAUTION - Remember a Line of Credit is not to be used routinely. The purpose is for a “Rainy Day” but as soon as the rain stops and the sun shines, the Line of Credit needs to be restored/repaid. The Line of Credit does 2 things: 1) Creates a strong financial portfolio if used correctly and 2) Gives the nonprofit access to emergency gap funding

KBLX Weekend Tip - Nonprofit Resources for Bridge Loans


Lenora Williams: Posted on Saturday, August 13, 2011 7:51 PM

A SHORT List of a few BRIDGE LOAN Funders:

· CDIF – Community Development financial institution funds http://www.cdfifund.gov/index.asp

· NAF – Nonprofit Assistance Fund http://www.nonprofitsassistancefund.org/index.php?src=

· Bridge Loan Financing for affordable housing (website with page 2 list of bridge loan funders) http://www.sahfnet.org/library/eastwind.pdf (see page 2)

· The Community Foundation of Greater Atlanta http://www.cfgreateratlanta.org/Grants-Support/Nonprofit-Loan-Fund.aspx

· FCNY - http://www.fcny.org/fcny/core/cfl/#cash flow

· Bridge way Capital - http://www.bridgewaycapital.org/pages/nonprofit-loans

· New York City Nonprofit Assistance - http://www.nyc.gov/html/nonprofit/html/initiatives/initiatives.shtml

· Broadway Federal Bank - http://www.broadwayfederalbank.com/nonprofit.htm

· NCG – Northern California Grant makers http://www.ncg.org/s_ncg/sec.asp?CID=11371&DID=25870

· LA Arts Loan Fund - http://www.cciarts.org/laartsloan.htm

· City First Bank of DC - http://www.cityfirstbank.com/products services/business lending/tabid/1508/Default.aspx

The Nonprofit Integrity Act of 2004


Lenora Williams: Posted on Sunday, August 05, 2012 9:33 AM

Nonprofit Integrity Act of 2004

The Nonprofit Integrity Act of 2004 signed into law by Gov Schwarzenegger became effective January 1, 2005. The Act requires nonprofits to have annual audits and creates new State and Federal annual form filing. Scandals in the nonprofit sector received considerable media attention and prompted state and federal legislators to seek reforms like the Integrity Act to improve the accountability of directors and trustees of public funds and to strengthen the oversight of charitable organizations fundraising campaigns.

The Nonprofit Integrity Act requires nonprofits place on file with federal and state agencies the following; articles of incorporation, bylaws, Names and addresses of all directors, officers and trustees, annual accounting period, Statement of activities in California, the first date the business began, and a Copy of the IRS determination letter. This information must be on file with the Attorney General’s Registry of Charitable Trusts.

Lenora Williams - KBLX Weekend Nonprofit Tips


Lenora Williams: Posted on Saturday, July 28, 2012 6:46 AM

Check out Lenora Williams your Nonprofit Guru on KBLX 102.9 FM radio in the Bay Area- Weekend mornings Saturday and Sunday between 7 am - 10 am bringing you tips on how to sustain healthy nonprofit organizations

Office of Inspector General (OIG) 7 Elements of a Compliance Program


Posted on Monday, November 14, 2011 1:10 AM

OIG 7 Elements of a Corporate Compliance Program

Comprehensive compliance programs at a minimum should include the following seven elements:

1. Written standards of conduct, as well as written policies and procedures

2. Designation of a Chief Compliance Officer and/or Corporate Compliance Committee

3. Effective education and training programs

4. Hotline to receive complaints and to protect whistle blowers from retaliation

5. System to respond to allegations of improper and/or illegal activities and the enforcement of appropriate disciplinary action

6. Audits to monitor compliance

7. Investigation and remediation of identified systemic problems and the development of policies

Read .... OIG compliance guideline; http://oig.hhs.gov/fraud/complianceguidance.asp

Whistle Blower Nonprofit Info


Lenora Williams: Posted on Saturday, July 21, 2012 7:01 AM

Whistle Blower Nonprofit Information

Whistle Blower Protection:

In keeping with the policy of maintaining the highest standards of conduct and ethics, NONPROFITS will investigate any suspected fraudulent or dishonest use or misuse of NONPROFITS’s resources or property by staff, board members,consultants, or volunteers.

Staff,board members, consultants, and volunteers are encouraged to report suspected fraudulent or dishonest conduct (i.e., to act as “whistleblower”), pursuant to the procedures set forth below.

Reporting

A person’s concerns about possible fraudulent or dishonest use or misuse of resources or property should be reported to his or her supervisor or, if suspected by a volunteer, to the staff member supporting the volunteer’s work immediately upon discovery of the facts giving rise to the individual’s concern. If, for any reason, a person finds it difficult to report his or her concerns to a supervisor or staff member supporting the volunteer’s work, the person should report the concerns directly to the CEO/President/Executive Director or designee. Alternately, to facilitate reporting of suspected violations where the reporter wishes to remain anonymous, a written statement may be submitted to one of the individuals listed above.

Anyone reporting a concern must act in good faith and have reasonable grounds for believing the information disclosed indicates significant fraudulent or dishonest conduct, as defined below. Allegations that are knowingly false or made with reckless disregard for their truth or falsity, that prove to be unsubstantiated, and that prove to have been made maliciously, recklessly, or with the foreknowledge that the allegations are false, will be viewed as serious disciplinary offense and may result in discipline, up to and including termination of employment or voluntary services.

Definitions

Baseless Allegations

Allegations made with reckless disregard for their truth or falsity. Individuals making such allegations may be subject to disciplinary action by NONPROFITS, and/or legal claims by individuals accused of such conduct.

Fraudulent or dishonest Conduct

A deliberate act or failure to act with the intention of obtaining an unauthorized benefit - Examples of such conduct include, but are not limited to:

.Forgery or alteration of documents

.Unauthorized alteration or manipulation of computer files

.Fraudulent financial reporting

.Pursuit of a benefit or advantage in violation of NONPROFITS’s "Conflict of Interest Policy"

.Misappropriation or misuse of NONPROFITS resources, such as funds, supplies, or other assets

.Authorizing or receiving compensation for goods not received or services not performed

.Authorizing or receiving compensation for hours not worked

Whistle blower

An employee, consultant, or volunteer who informs a supervisor or the CEO/President/executive director about an activity relating to NONPROFITS which that person believes to be fraudulent or dishonest.

Rights and Responsibilities

Supervisors

Supervisors are required to report suspected fraudulent or dishonest conduct to the CEO/President/executive director or designee. Reasonable care should be taken in dealing with suspected misconduct to avoid

.Baseless allegations

.Premature notice to persons suspected of misconduct and/or disclosure of suspected misconduct to others not involved with the investigation

.Violations of a person’s rights under law

Due to the important yet sensitive nature of the suspected violations, effective professional follow-up is critical. Supervisors, while appropriately concerned about “getting to the bottom” of such issues, should not in any circumstances perform any investigative or other follow-up steps on their own. Accordingly, supervisor who becomes aware of suspected misconduct

. Should not contact the person suspected to further investigate the matter or demand restitution

. Should not discuss the case with attorneys, the media, or anyone other than the CEO/President/executive director

. Should confer with appropriate personnel before contacting law enforcement.

Investigation

All relevant matters, including suspected but unproved matters, will be reviewed and analyzed, with documentation of the receipt, retention, investigation, and treatment of the complaint. Appropriate corrective action will be taken, if necessary, and findings will be communicated to the reporting person and his or her supervisor. Investigations may warrant investigation by independent persons such as auditors and/or attorneys.

Whistle Blower Protection

NONPROFITS will protect whistle blowers as defined below:

. All nonprofits must prohibit retaliation against any employee or volunteer who, in good faith,reports a concern or participates in an investigation pursuant to this policy. all nonprofits must use their best efforts to protect whistle blowers against retaliation. Whistle blowing complaints will be handled with sensitivity,discretion, and confidentiality to the extent allowed by the circumstances and the law. Generally, this means that whistle blower complaints will only be shared with those who have a need to know so that

nonprofits can conduct an effective investigation; determine what action to take based on the results of any such investigation, and in appropriate cases, with law enforcement personnel. (Should disciplinary or legal action be taken against a person or persons as a result of a whistle blower complaint, such persons may also have the right to know the identity of the whistle blower.)

.Employees, consultants, and volunteers of NONPROFITS may not retaliate against a whistle blower for informing management about an activity which that person believes to be fraudulent or dishonest with the intent or effect of adversely affecting the terms or conditions of the whistleblower’s employment, including but not limited to, threats of physical harm, loss of job, punitive work assignments, or impact on salary or fees. Whistle blowers who believe that they have been retaliated against may file a written complaint with the CEO/President/executive director. Any complaint of retaliation will be promptly investigated and appropriate corrective measures taken if allegations of retaliation are substantiated. This protection from retaliation is not intended to prohibit supervisors from taking action, including disciplinary action, in the usual scope of their duties and based on valid performance-related factors.

.Whistle blowers must be cautious to avoid baseless allegations

990 IRS Nonprofit Form Info


Lenora Williams: Posted on Saturday, July 21, 2012 6:21 AM

990 Tax form requirements for Nonprofits

Every year as a nonprofit, unless your revenue is less than $25,000 you are responsible for filing a tax form 990 with IRS

There are large penalties for not filing on time, the penalties can range from$25 - $100/day depending on your gross receipts (to a maximum of $10,000 or 5percent of its gross receipts for the year, whichever is less)

All nonprofits with revenue exceeding $25,000 must file their form 990 – On the 15th day of the month, 5 months after the close of their fiscal year.

Forexample, if your fiscal year is;

January 1st thru December 31st you must file your 990 by May 15 or

If your fiscal year is July 1st thru June 30th you must file your 990 by November 15

Extensions:

You can request and be given two (2) - Three (3) month extensions for a total of Six (6) months

The IRS 2011 form 990 can be found here -

http://www.irs.gov/pub/irs-pdf/f990.pdf

Cash is King - Why nonprofits should have reserves


Lenora Williams: Posted on Thursday, June 02, 2011 11:53 PM

Cash is King - Why nonprofits should have reserves

What are reserves?

They are funds available for use by the organization at the discretion of the board of directors (i.e. unrestricted dollars, cash). These funds are usually invested in a very conservative manner i.e. money market accounts, government bonds, etc. The investments usually have low interest rates in exchange for the ability to liquidate the investments at any time.

Why do nonprofits need reserves?

In the nonprofit world there is always the balancing act of managing the operating income and the expenses. Our current economy pushes the envelope by creating more and more funding uncertainty. Whether funding cuts are expected or unexpected reserves provide a necessary cushion for survival.

Reserves also allow organizations to build strong credit ratings. Similar to our personal credit scores, nonprofits build favorable financing scores for growth and expansion based on their financial statements which reflect their cash on hand, their reserves .

How do you build reserves?

Through unrestricted funds, which are usually generated by; general donations with no strings attached, foundation funds that are for the general purpose of supporting the organization and fund raising events. You can not build reserves by using restricted grant funds like government funds; federal, state, county and city. If you have unspent restricted grant funds they must be returned to the funder or a request must be made to expand the grant time line.

KBLX 102.9 Nonprofit Weekend Tip! How many Nonprofit Board Members are required to sit on the Board?


Lenora Williams: Posted on Saturday, June 22, 2013 7:42 PM

How many members on a board?

There is no agreement on the perfect size for a board.

It is a good practice to have a minimum of 3 different persons serving on your Nonprofit Board at all times But An active, involved board made up of committed people from the community is essential.

Under California law, Less than half of the board of directors of Nonprofit Board can be employees.

Can you be a CEO and a Board member? Yes

Best practice is that organizations NOT have any employees serve on the board TO Avoid confusing the issues of authority and supervision.  

Nonprofit Exhibit Discount CLOSED BY KBLX STAFF - STAY TUNNED FOR THE HOODIE AWARD CELEBRATION - there will be AIR TIME SPECIALS FOR NONPROFITS - Look for the upcoming Blog!!!


KBLX Oakland Jazz Festival Saturday July 21, 2012

Dunsmuir Estates

Oakland, California

As a NONPROFIT sponsor CLIENT will receive:

—

Name inclusion in 10x pre-recorded promotional announcements

— Logo and linking URL on the KBLX Oakland Jazz Festival web page

— Signage display in prime location throughout the venue (up to 3 banners)

— Exhibit space, table and chairs for merchandising opportunities

— 2x Live “thank you” mentions at the event

July 21, 2012, Saturday

Special Exhibit Discount forNonprofits who say they saw this ad on

Lenora Williams website Blog:

http://www.WilliamsLLNonprofitcorner.com

For Nonprofit discounted exhibit space contact Maria at

(415) 546-8414 and give her my name Lenora Williams 

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