Many states require any nonprofit organization that plans to solicit donations for a charitable purpose within the state to register with the state (and pay a filing fee) for consumer protection purposes prior to soliciting donations. A “charitable” purpose is generally defined much more broadly for these purposes than it is for federal income tax purposes. Although this can become onerous and expensive for organizations that solicit donations in multiple jurisdictions, ... Keep Reading »
Raffles and other Games of Chance
Fundraising is a core component of most tax exempt organizations’ revenue generation efforts. Raffles and similar games of chance are often employed by tax exempt organizations as fundraising tools. However, if a tax exempt organization is going to conduct games of chance – including raffles – in any state, it needs to consult that state’s laws to ensure it is not violating the state’s gaming laws. Many tax exempt organizations are unaware ... Keep Reading »
Sharing Expenses
The economic climate of the last few years has caused tax exempt organizations to deliver their services and manage their expenses with greater creativity and efficiency. One way to keep costs down is to share employees, office space, or administrative resources with another organization, whether nonprofit or for-profit. Obviously, if the other organization is for-profit, the issue of private benefit arises (and possibly the issue of private inurement if the for-profit ... Keep Reading »
Are your Workers Employees or Independent Contractors?
Tax exempt organizations face the same worker classification issues as for-profit organizations. When an individual performs services for a tax exempt organization on his or her own (not through another organization) and is compensated for such services, that individual is acting as an employee or an independent contractor with respect to the tax exempt organization. Proper classification of a service provider as an employee or an independent contractor is very important ... Keep Reading »