Nonprofit Law Matters

Category Archives: Private Foundations

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Tax Reform Affects Exempt Organizations

Posted in Charitable Gift Planning, Private Foundations, Public Charities, Religious Institutions, Revenue Generating Activities, Tax Treatment of Lobbying & Political Activities

The House Ways and Means Committee on Thursday introduced its highly anticipated tax legislation, called the Tax Cuts and Jobs Act.  The Act proposes major changes to the Internal Revenue Code, including lowering the number of tax brackets, increasing the standard income tax deduction, and repealing or limiting other deductions.  You may have read about… Continue Reading

IRS Releases Revenue Procedure 2017-53 on Foreign Public Charity Equivalence Determinations

Posted in Grantmaking & Social Investing, International Charitable Transactions & Operations, Private Foundations, Public Charities

Yesterday, September 14, 2017, the IRS released Revenue Procedure 2017-53, which international grantmakers and their tax advisors have eagerly awaited.  As background, private foundations making grants directly to foreign organizations generally must use one of two grantmaking procedures―expenditure responsibility or foreign public charity equivalency.  (The latter is known as “FPCE” for short, and also sometimes… Continue Reading

Every Nonprofit with a Website Needs to Know: New Requirements to Gain and Keep Online Copyright Infringement Liability Protections

Posted in Formation & Tax Exempt Status, Nonprofit Governance & Ethics, Private Foundations, Public Charities, Religious Institutions, Uncategorized, Unions, Associations, Clubs & Other Tax-Exempt Organizations

Does your nonprofit have a website?  Does the website include a blog that allows viewers to post comments?  Does it include a discussion forum or other online community component where people can post videos, pictures, or other text or media?  Do you have social media channels?  If your nonprofit uses this type of online outlet… Continue Reading

Nonprofits: Amplify Your Voice in the November Election with these Helpful Tips

Posted in Nonprofit Governance & Ethics, Private Foundations, Public Charities, Tax Treatment of Lobbying & Political Activities, Uncategorized, Unions, Associations, Clubs & Other Tax-Exempt Organizations

Our friends at California Association of Nonprofits have some creative tips for how nonprofits can make their voices heard on Election Day, and some resources to help.  Check it out!

Coming Changes to Federal Overtime Rules Will Affect Nonprofit Employers

Posted in Private Foundations, Public Charities, Religious Institutions, Uncategorized, Unions, Associations, Clubs & Other Tax-Exempt Organizations

The US Department of Labor has issued new regulations, effective for most employers in December 2016, that will affect how employers, including nonprofits, determine which employees are exempt from certain wage and hour rules. Since we’re not employment lawyers, these new rules fall outside of our areas of expertise, but our friends at California Association… Continue Reading

Final PRI Regulations Released

Posted in Grantmaking & Social Investing, Private Foundations, Social Enterprise

The Treasury Department and Internal Revenue Service yesterday released final regulations on private foundation program-related investments. These regulations put in final form nine examples of investments that qualify as PRIs, initially proposed by the IRS in 2012. The White House has been enthusiastic about impact investing as a tool to further social and charitable objectives,… Continue Reading

IRS Commissioner Hints at Timing for New Political Regulations, Summarizes Thousands of Public Comments

Posted in AG, IRS, FTB, & Property Tax Proceedings, Private Foundations, Public Charities, Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

We looked at IRS Commissioner John Koskinen’s written statement to the Senate Finance Committee, with attached documents, submitted with his testimony on Tuesday, October 27, at http://www.finance.senate.gov/imo/media/doc/27OCT2015Koskinen.pdf. Here’s what’s newsworthy: First, from the Commissioner’s oral testimony and from his prepared statement, the IRS and Treasury have not been intimidated by Republican calls to discontinue the… Continue Reading

Good News on the Investment Front!! California Passes AB 792, Harmonizing Investment Standards for Nonprofits in California

Posted in Charitable Gift Planning, Private Foundations, Public Charities, Religious Institutions

The stock market may be in shambles, but California charities have reason to celebrate.  Historically, charities formed as California nonprofit public benefit corporations have had to satisfy two state law investment standards:  Corp. Code Section 5240 and UPMIFA (found at Probate Code section 18501 and following).  Corp. Code Section 5240(b) provides that in making investments, a… Continue Reading

Treasury Releases Final Regulations for Private Foundations Making International Grants Using Foreign Public Charity Equivalence Determinations

Posted in Grantmaking & Social Investing, International Charitable Transactions & Operations, Private Foundations

Treasury will release tomorrow final regulations regarding private foundations and their use of a process called “foreign public charity equivalence” or “equivalency determination.” Treasury’s hope in issuing these regulations is to facilitate international grantmaking while ensuring that foundation equivalency determinations are appropriately made. Background and 2012 proposed regulations. As explained in a prior post, before… Continue Reading

IRS Clarifies Position on Private Foundation Mission-Related Investments Under Section 4944

Posted in Grantmaking & Social Investing, Private Foundations, Social Enterprise

In Notice 2015-62 issued on Tuesday, the IRS explained that a private foundation and its managers will not necessarily be penalized under Internal Revenue Code Section 4944 for a mission-related investment that does not qualify as a program-related investment (PRI) and that offers a lower return than more standard alternatives, since a foundation’s charitable purposes… Continue Reading

A Smart Pitch for Nonprofit Advocacy

Posted in Grantmaking & Social Investing, Private Foundations, Public Charities, Tax Treatment of Lobbying & Political Activities

Campion Foundation Trustee Sonya Campion recently made an intelligent pitch for private foundation directors, and their institutions, to arm themselves with knowledge about the rules governing advocacy by foundations and their grantees, and to use the powerful tools that the tax code provides for funding change.  We couldn’t agree more! Want to get started?  These free… Continue Reading

Senate Judiciary Oversight Subcommittee Hearing on IRS and Political Tax Law

Posted in Private Foundations, Public Charities, Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

I had the honor of testifying in Washington, D.C., on July 29, 2015, before the Senate Judiciary Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts, chaired by Senator Ted Cruz, about the current IRS work on developing regulations to define political campaign activity for tax-exempts.  (The picture below shows us, the witnesses, being… Continue Reading

FASB Proposes Significant Changes to Nonprofit Accounting Standards

Posted in Charitable Gift Planning, Private Foundations, Public Charities

The Financial Accounting Standards Board (“FASB”) recently issued a Proposed Accounting Standards Update (“ASU”) specific to Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954).  The ASU seeks to improve net asset classification reporting requirements, as well as require expanded information on liquidity, financial performance, and cash flow.  The full scope of proposed changes… Continue Reading

Exempt Organizations Can Redact Donor-Identifying Information From IRS Form 990, Schedule B Before Public Disclosure

Posted in Private Foundations, Public Charities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

Last week, a political-spending watchdog group sent a potentially misleading written request to many exempt organizations (they say over 100) involved in political activities, seeking copies of Form 990, Schedule B for past tax years, including filings that are more than three years old. The request does not explicitly acknowledge the exempt organizations’ right to… Continue Reading

New Domain Names Available for Nonprofits

Posted in Formation & Tax Exempt Status, International Charitable Transactions & Operations, Nonprofit Governance & Ethics, Nonprofit Structures, Relationships & Transactions, Private Foundations, Public Charities

As of May 7, 2015, nongovernmental organizations that meet certain eligibility requirements can purchase two new web domains – “.ngo” and “.ong.” Public Interest Registry, the nonprofit that manages the .org web domain, launched the new domains exclusively for nonprofits, unlike the .org domain which is available to both nonprofits and for-profits.  The new domains… Continue Reading

Mexico’s Anti-Money Laundering Law Affects U.S. Donors

Posted in Grantmaking & Social Investing, International Charitable Transactions & Operations, Private Foundations, Public Charities

A number of our clients have asked about Mexico’s Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita (Mexico’s Anti-Money Laundering statute or the “AMLL”), which became effective July 17, 2013.  The AMLL identifies specific transactions that require a Mexican entity that engages in these activities to identify and verify the identity… Continue Reading

New Year’s Treasure? AB 1712 Clarifies that Nonprofits May Claim Unclaimed Property of Certain Dissolved Affiliates in California

Posted in Nonprofit Structures, Relationships & Transactions, Private Foundations, Public Charities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

This past August, Governor Jerry Brown signed into law AB 1712, which amends the California Code of Civil Procedure to clarify that certain nonprofit organizations whose affiliates have dissolved may claim the unclaimed property of those dissolved entities under the state’s unclaimed property system. Unclaimed Property Law in California California’s Unclaimed Property Law provides a… Continue Reading

Date of Gift Rules for Charitable Contributions

Posted in Charitable Gift Planning, Private Foundations, Public Charities

The end of the year is nigh, and timing is crucial to determining the year of a donor’s income tax deduction, the value of a donor’s fluctuating asset, and the characterization of the donor’s asset as short-term or long-term.  In general, a gift is complete when the donor relinquishes control over the asset and delivers… Continue Reading

CalNonprofits Releases Report on Impact of California’s Nonprofit Sector

Posted in Grantmaking & Social Investing, Private Foundations, Public Charities, Religious Institutions, Revenue Generating Activities

On August 5, 2014, CalNonprofits, a statewide alliance of nearly 10,000 nonprofit organizations promoting the interests of California’s nonprofit sector, released a report, Causes Count: The Economic Power of California’s Nonprofit Sector, “the first report of its kind to examine the nonprofit sector’s scope, activities and economic impact” in California. If you don’t have time to… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #10 — Ottinger Foundation, The Leonard and Sophie Davis Fund, and The Woodbury Fund

Posted in Private Foundations, Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

 “[T]he proper course for the IRS is ‘to mend it, not end it.’” The comments submitted by these three family foundations (Ottinger Foundation, The Leonard and Sophie Davis Fund, and The Woodbury Fund) elegantly reflect the concerns of grantmakers that fund nonpartisan voter education, as well as charities seeking to “curb the corrupting influence of… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #14 — Funders’ Committee for Civic Participation

Posted in Private Foundations, Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“The revised proposal should apply universally to all tax categories and make clear that nonpartisan civic engagement is not considered political activity.” The Funders’ Committee for Civic Participation (FCCP), an Oregon-based coalition of grantmakers, provides a concise summary of the overarching dangers of adopting the proposed rules in their current form.  FCCP’s focus is on… Continue Reading

Proposed San Francisco Ordinance Would Impose Significant New Disclosure Obligations on Nonprofits That Interact with City Officials

Posted in Private Foundations, Public Charities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

A recent proposal by San Francisco Board of Supervisors President David Chiu would impose significant new disclosure obligations on nonprofits that have business with the City and County of San Francisco.  Apparently intended to target communications and expenditures made by or on behalf of certain developers seeking to influence public officials, the proposal in its… Continue Reading

Top 25 Comments on IRS Proposed Political Activity Rules: #24 – Council on Foundations

Posted in Private Foundations, Tax Treatment of Lobbying & Political Activities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

“At a time when the influence of big money in our election cycles has never been more pronounced, foundations and nonprofit organizations have an essential role to play in helping to educate and empower everyday citizens to make their voices heard.” The Council on Foundations represents over 1,700 different public and private foundations across the… Continue Reading

Update — Expedited Handling for Determination Letters Still Available

Posted in AG, IRS, FTB, & Property Tax Proceedings, Formation & Tax Exempt Status, Private Foundations, Public Charities, Unions, Associations, Clubs & Other Tax-Exempt Organizations

For the past few weeks, there has been some confusion over Revenue Procedure 2014-4’s apparent elimination of an expedited option for exempt-organization determination letters as discussed previously, since the subsequent Revenue Procedure 2014-9 still included the explanation from previous years about the IRS’s standards for granting expedited treatment of exempt-organization determination letters. Earlier today, the… Continue Reading