Do you need expert advise in the Non-Profit & Pro Bono space? We can help your organization with any of the following:

• Incorporation
• Tax-exempt applications for 501(c) status / Form 1023
• Charitable solicitation regulations
• State and federal annual tax filings
• Charitable gifts and fundraising
• Contracts
• Unrelated business income tax
• Internal governance and board composition
• Employment and volunteer relations
• Intellectual property, including trademarks and copyrights
• Partnerships with other non-profits
• Lobbying and political activities
• Real estate
• Donor relations

Six Issues to avoid with your non-profit- what you need to know before you get started:

1. Conflict of Interest Policies

The federal law requires nonprofit organizations to have a written conflict of interest policy and thoughtfully doing so can protect you. Adopting a policy that prohibits a variety of conflicts of interest will show that your organization is doing everything it can to avoid impropriety. We help draft policies and procedures to mitigate against potential conflicts of interest. 

2. Independent Contractors

AB5 resulted in the California court requiring the strict, three-pronged ABC test to be used as a way to determine independent contractor classification. Before hiring anyone in your nonprofit, you must use the ABC test to avoid fines for unfiled W-2 forms, penalties of wages and taxes, and even criminal penalties. 

3. Unpaid Internships

There are many issues with “hiring” interns or volunteers. Letting an intern know in advance that the position is unpaid and that their experience will be solely for educational purposes is the first step to staying compliant. For the safety of your organization, it might even be best to refer to them as volunteers. 

4. Lobbying

The IRS recognizes that advocacy is an important activity for nonprofits and lobbying is a subset of that. Therefore, it will take into consideration the context of the situation before incurring penalties. For example, an organization whose main purpose is to raise awareness about the rights of homeless veterans may hold educational meetings or distribute pamphlets with helpful facts without the actions violating the tax code. 

5. Misuse of Funds

Charitable organizations heavily rely on the support of donors to continue outreach and keep operations afloat. These donations have strings attached though and are designated as restricted and unrestricted. Restricted funds have stipulations and can only be used for purposes that the donor explicitly allows. The IRS takes violations of restricted funds very seriously and will do more than just revoke the tax-exemption status. 

6. Fundraising

Attracting the attention of third-party advocates is a great way to expand your cause’s reach and leverage more support. However, it is very important that nonprofits be selective about which organizations they partner with and accept support from. Allowing unrelated third-party funders to hold fundraisers or affiliate their name with yours can be a detriment to both your reputation and your financial stability. Ensure that the organizations that you partner with for your fundraising efforts are reputable, trustworthy, and willing to follow federal and state fundraising laws and regulations.