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How do I start a nonprofit? |
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Has your question already been answered? Find out below. 1.
How do I start a nonprofit?
Here are some suggestions from the SC Association of Nonprofit Organizations. Five Alternatives to Starting a Nonprofit Study the list of nonprofits already active in the same area and join their efforts as a volunteer, a board member or even as staff. Click here to search SCANPO's on-line membership directory. Analyze the list of nonprofits already active in the same area, identify the three most compatible with your ideas and meet them to explore creating a special project or initiative - and negotiate your involvement. Explore the list of national organizations in the area of your interest and see if a local chapter is needed in your geographic area. If your effort will be quite local and small, consider forming an unincorporated association or club - have meetings and activities but skip the reporting requirements (an option for groups with an annual budget of under $25,000). If you are considering creation of a group to finance activities or needs of others (scholarships, family emergency funds for a specific population, etc.) explore sponsorship of the fund by a community foundation or other organization. If you still think starting a nonprofit is for you, check out these helpful tips. Clarify your mission, goals and exactly whom you would like to serve. Talk with as many people as you can to find out what other groups are already doing in related areas. Work with them if you possibly can rather than creating a new organization. In the current financial climate, you will find it difficult to garner support or raise funds if you duplicate or significantly overlap the goals or services of existing organizations. If you are sure a new organization is really needed, the next step is to establish a board of directors of at least 5-7 people. Be sure each board member understands the legal and financial responsibilities of a nonprofit board member (see #4 below and Ten Basic Responsibilities of Nonprofit Boards, available from BoardSource. Members of the S.C. Association of Nonprofit Organizations (SCANPO) may receive discounts on BoardSource publications. Contact the SC Association of Nonprofit Organizations for more information, 803/929-0399. Review Nonprofits 101: A Guide for Staff and Board Members of New and Smaller Charitable [501(c)(3)] Nonprofits. This publication, which covers the legal requirements for South Carolina nonprofits including such issues as legal and financial responsibilities, is available for review in the SCANPO office or members may purchase a hard copy for $90 plus shipping, CD-ROM $85 plus shipping, and the electronic version for only $80. Nonmembers pay a little more on each. You may also want to read How to Form A Nonprofit Corporation by Anthony Mancuso ($39.95 + $4 shipping, Nolo Press in California, 800/992-6656, fax 415/548 5902). Define your organization's purpose and create your bylaws. Reviewing bylaws of several existing organizations may be helpful, but remember that organizations' structures and purposes vary. What may be appropriate for one organization might not be for yours. A useful reference available in your local library is Nonprofit Corporations, Organizations, and Associations (6th ed.) by Howard L. Oleck. In addition, Securing Your Organization's Future by Michael Seltzer ($24.95 + $4.50 shipping, Foundation Center, 800/424-9836, fax 212/807-3677) is an excellent resource and includes helpful worksheets. How to Form A Nonprofit Corporation by Anthony Mancuso ($39.95 + $4 shipping, Nolo Press in California, 800/992-6656, fax 415/548 5902) includes fill in the blank bylaws on computer disk. Incorporate in South Carolina by filing Articles of Incorporation with the Secretary of State. Call 803/734-2158 for forms and fee information. The fee to incorporate as a nonprofit corporation is $25. Get a Federal Employer Tax Identification Number even if you do not have employees. The number is used by the IRS to track reports and your 1023 tax exempt application. You can get it on the Internet at: www.irs.ustreas.gov, or call: 800/829-3676 to get it by mail or go to your local IRS office. Apply for tax exemption as a 501(c)(3) nonprofit. This is needed before you can receive grants or tax-deductible contributions. Call the IRS (877/829-5500, 800/829- 3676 or 800/829-1040) for Form 1023 and the packet that goes with it. You can also get the forms on the IRS's web site at www.irs.ustreas.gov. The process takes 3-24 months. It is recommended that a lawyer and/or CPA who are knowledgeable about nonprofit tax law review your bylaws and application for tax-exemption before final submission. You might ask established nonprofits in your area for their recommendations or call SCANPO for referrals. Certain retail sales by nonprofits are exempt from sales tax. Some (but very few) items purchased by nonprofits are also exempt such as food for feeding the homeless. Once you receive your tax exempt status from the IRS, then apply to the S.C. Department of Revenue for exemption from state sales tax for items you are going to sell. Call the S.C. Department of Revenue at 803/898 5788 to request application #ST387 and to get more information. You can also get the forms on the Internet at www.dor.state.sc.us. Apply for local property tax exemption on real property or vehicles by contacting Ronald Cassels, 803/898-5473 at the S.C. Department of Revenue. Should your nonprofit qualify for an exemption from property tax your local county tax office will be notified. As you proceed, be sure to check with an attorney or CPA who is knowledgeable about nonprofit accounting about other needed financial documents and filings. If you plan to solicit contributions you must file a registration statement each year with the Secretary of State. It costs $50 annually to register. If you raise more than $20,000 or receive contributions from 10 or more people you must register. You also have to file a financial report with the Secretary of State within four and one-half months after the close of your fiscal year. Other resources for nonprofits: The South Carolina State Library maintains an extensive collection of publications designed to help nonprofit organizations locate grant funding from corporate foundations and government entities. The Grants Research Collection may accessed at the Anderson and Charleston County Libraries and the State Library in Columbia. Karen McMullen is the reference librarian in charge of this collection; she may be reached at 803/734-8666. The S.C. Association of Nonprofit Organizations (SCANPO) offers training in the basics of nonprofit management. Two seminars “Nonprofit 101” and “Navigating the Nonprofit Regulatory Maze” could be helpful to newer nonprofits. Call SCANPO for more information, 803/929-0399. UPDATED FOR 2007! Nonprofits 101: A Guide for Staff and Board Members of New and Smaller Charitable [501(c)(3)] Nonprofits Available in hard-copy, CD-ROM or electronic format.. CD-ROM and electronic formats have active, updated hyperlinks, so they're much more user-friendly and up-to-date than the booklet. How to Incorporate in South Carolina Federal forms and filings- Information for tax-exempt organizations Applying for tax-exemption Filing Requirements Fundraising Registration- Labyrinth Inc. South Carolina Requirements Unified Registration Statement Nonprofit Issues IRS Exempt Organizations Division http://www.irs.gov/charities/charitable/index.html The EO website includes a step-by-step explanation of the Application Process. Applying for 501(c)(3) Tax-Exempt Status http://www.irs.gov/pub/irs-pdf/p4220.pdf This IRS Publication 4220 presents general guidelines for organizations that seek tax-exempt status from federal income tax under section 501(c)(3) of the IRC. Compliance Guide for 501(c)(3) Tax-Exempt Organizations This IRS Publication 4221 presents general compliance guidelines for recordkeeping, reporting, and disclosure requirements that apply to organizations that have tax-exempt status from federal income tax under section 501(c)(3) of the IRC. 2.
What are the elements of a strategic plan?
Adapted from Strategic Planning for Nonprofit Organizations, by Michael Allison and Jude Kaye
A strategic plan should communicate an organization's mission and vision of the future, its goals and its methods for pursuing those goals. Given this, the following outline serves as a good basis for what should be included in your strategic plan:
Introduction by the President of the Board I. Executive Summary II. Mission Statement and Vision Statement III. Organizational Profile and History IV. Strategic Issues and Core Values V. Program Goals and Objectives VI. Management/ Operations Goals and Objectives VII. Appendices (optional) 3.
Q. Does our organization have a conflict of interest?
Further explained: "I have a board member who is a construction A. Yes, you have a conflict of interest and yes it's possible that you can contract with a board member to do work for the organization. There is nothing to stop a contractor board member from giving an organization on whose board she sits a good deal. A conflict of interest means that someone is on both sides of the transaction. Here, the board member would be both a purchaser and seller of services. So, there is a conflict of interest. The S.C. Nonprofit Corporations Act allows the Board or a Board committee to approve a conflict of interest transaction with a director if "the material facts of the transaction and the director’s interest are disclosed or known to the board or committee of the board" and "the directors approving the transaction in good faith reasonably believe that the transaction is fair to the corporation." You could also have such a transaction approved by the Attorney General or the circuit court for Richland County. S.C. Code of Laws Section 33 31 831at http://www.scstatehouse.net/code/t33c031.doc The IRS addresses these issues under the prohibitions on private inurement--the transfer of assets dedicated to a public purpose to private persons--and excess benefits transfers. The IRS regulations on excess benefits transfers are substantially more restrictive than state law. As Bruce R. Hopkins notes in The Law of Intermediate Sanctions (p. 100), “The question in the intermediate sanctions setting is whether the benefits flowing to the [insider] as a result of a transaction with an applicable tax-exempt organization were greater than those accruing to the organization.” The prohibition on excess benefits transfers applies to a much broader group of persons–anyone in a position to exercise substantial influence over the organization and their families and entities in which those persons own more than a 35 percent interest. Membership in this group includes anyone who fit this description in the previous five (5) years. So, they may apply to a former board member as well. You should have all such transactions reviewed and approved by an independent group (the board, a board committee or an independent committee) with no involvement by conflicted persons based upon comparability data that ensures the reasonableness of the terms and price. The decision-making body must approve the contract without discussion or voting participation by the person whose compensation is being approved or any other member with a conflict of interest. However, that person may answer questions that will help the decision-making body in its later deliberations. And you should thoroughly document your processes and the bases for decisions. This all sounds nearly overwhelming. That is why it is important to hire legal counsel experienced in tax-exempt law when looking to enter into a significant transaction with any person or entity with a relationship with your organization. In the end, however, you protect yourself with good, ethical management. You enter into transactions (including employment compensation arrangements) based upon sound research and an understanding of market prices. You don't steer business to your board, family or donors without regard to price or quality. You don't hire their incompetent children or drunken spouses. You exclude interested parties from decision-making (both discussions and voting). And, you document how and why you made your decisions. If you do that, you're fine. The IRS has authority to levy severe penalties on both the person receiving the excess benefit transfer and board members who knowingly approve it. So, a board should seek competent legal guidance before entering into something as significant as a construction contract with a board member. u have the burden of proving that a transaction did not involve an excess benefit. However, that burden can be shifted if the body that made the decision to approve the transaction followed the safe harbor procedures outlined by the IRS. (See Steven T. Miller, Director Exempt Organizations, IRS, "Rebuttable Presumption Procedure is Key to Easy Intermediate Sanctions Compliance” ( http://www.irs.gov/pub/irs-tege/m4958a2.pdf )). Resources: Bruce R. Hopkins, The Law of Intermediate Sanctions: A Guide for Nonprofits (John Wiley & Sons, Inc., 2003) 4.
Should my organization pay a fundraising professional based on a percentage-based compensation?
(The answer is reprinted with permission from the Association of Fundraising Professionals) A. AFP Standard No. 16 of Professional Practice regarding percentage compensation states: Q. What does this standard mean? A. It means that an AFP member or any other person subscribing to the AFP Code of Ethical Principles may not accept any compensation that is based on a percentage of charitable funds raised. For the purpose of this standard, charitable funds are those defined by and subject to government regulations, or as reported on government reporting forms as contributions, gifts, grants, or similar amounts received. Q. What are examples of acceptable compensation and examples of compensation that is not acceptable? A. Acceptable forms of compensation include: Examples of unacceptable compensation practices include:
Q. What is the purpose of this standard? A. There are two primary principles underlying this standard:
For more information on this topic follow the AFP website link: For a copy of the AFP CODE OF ETHICS-PDF Document, follow this link:
5.
How should my nonprofit respond to a request for information under Freedom of Information (FOIA)?
Most nonprofit organizations are not subject to disclosure under the Freedom of What does the IRS require nonprofits to disclose? IRS Disclosure Requirements state what documents must be disclosed. The disclosed tax documents are the exempt organization's exemption application and its three most recently filed annual information returns. An exemption application includes the Form 1023 (for organizations recognized exempt under § 501(c)(3)), Form 1024 (for organizations recognized exempt under most other paragraphs of § 501(c)), or the letter submitted under the paragraphs for which no form is prescribed, together with supporting documents and any letter or document issued by the IRS concerning the application. The information returns are the Form 990 , Return of Organization Exempt From Income Tax, Form 990-EZ , Short Form Return of Organization Exempt From Income Tax, Form 990-PF, Return of Private Foundation, Form 990-BL , What is the tax-exempt organization to do? In response to a written or in-person request by an individual at the principal office of the organization, and if such organization regularly maintains one or more regional or district offices having three or more employees, at each such regional or district office, a copy of the covered tax documents shall be provided to the requester. If the request for copies is made in person, the request will generally be honored on the day of the request; if the request is written, then the organization usually has thirty days to respond. (A request that is faxed, e-mailed or sent by private courier is considered a written request.) The organization may want to charge reasonable copying costs and the actual cost of postage before providing the copies. The law permits this. But, the organization must provide timely notice of the approximate cost and acceptable form of payment, which must include cash and money order (in the case of an in-person request) and certified check, money order, and personal check or credit card, in the case of a written request. What does the IRS consider to be a reasonable charge for copying costs? A tax-exempt organization may charge a reasonable fee for providing copies, which is defined as the amount charged by the IRS for providing copies. Currently, that amount is $1.00 for the first page and .15 for each subsequent page. An organization may require payment before it provides copies, but must advise requesters of the total cost of the copies requested if adequate payment is not included with the request. What are the penalties for failure to comply with the disclosure requirements, and who must pay them? Responsible persons of a tax-exempt organization who fail to provide the documents as required may be subject to a penalty of $20 per day for as long as the failure continues. There is a maximum penalty of $10,000 for each failure to provide a copy of an annual information return. There is no maximum penalty for the failure to provide a copy of an exemption application. IRS FAQ’s on Public Disclosure visit http://www.irs.ustreas.gov/charities/article/0,,id=96430,00.html#4 6.
How should nonprofits choose and use a consultant?
The following article is an excellent resource for nonprofit organizations looking to utilize the services of a consultant. Nonprofit Consultants: How to Choose Them, How to Use Them So you think you need a consultant? Maybe your board has asked you to create a strategic plan for the next three years. Perhaps you just received a grant for a new computer system and don’t know how to allocate the money, or your funder wants a rigorous evaluation of your program. Do you need more support and action from your board? If you are like many nonprofit organizations, you might simply know that something is preventing your organization from being as strong and successful as you envision it—but you don’t know what that something is. Once you have decided you are in the market for consulting services, the questions come fast and furious. What kind of consultant? Where do I find the best one? How can I possibly pay for it? What happens when the consultant shows up? In the face of these questions, the potential for confusion, frustration, and inertia is enormous. Relax! There are ten simple steps you can follow to minimize the mystery and reap great rewards. Step 1: Understand who consultants are and what they do. • Management consultants. They typically help you examine specific functions within your organization, from the high-level strategic planning, fund development, and governance issues to the minute details of accounting, technology, space planning, and other operations. • Organizational development (OD) consultants. They look at less tangible but equally important aspects of an organization, including interpersonal dynamics and human relationships. • Program consultants. They offer expertise in a specific program area such as mental health advocacy, community housing development, or arts education. Program consultants can help with program design, evaluation, and assessment. • Technical specialists. They bring a professional skill to your organization that can’t be met in-house. Step 2: Determine whether a consultant can help you. • You have a problem or tasks that seems too technical, too specific, or beyond the capacity of your staff. Consider hiring a consultant with the special skills or expertise to take it on. • Your organization has the know-how but not the staff or time. Consultants can be used very effectively on an ad hoc basis to expand your organization’s capabilities. • Your problem requires the consensus and cooperation of your board and staff. An objective and neutral consultant can facilitate the process by soliciting input from diverse stakeholders and finding common ground. • You don’t know what your problem is. A consultant can help you conduct a comprehensive assessment to zero in on the problems that need attention. Step 3: Frame the problem. Step 4: Develop a request for proposal (RFP). Keep your RFP as short as possible to avoid scaring away good candidates who are too busy to wade through ponderous prose: Three to five pages is ideal. If yours is longer, edit it. At a minimum, the RFP should include: 1. A summary paragraph describing who you are and what you are looking for. 2. A brief paragraph about your organization—its mission, history, and current situation. 3. Your statement of need, developed in Step 3 above. 4. Details about the engagement, including time frame and financial constraints. 5. Desired outcomes and deliverables. 6. The desired format of the proposal, including the due date. 7. How and when the proposals will be evaluated. 8. Your contact information. Step 5: Select the right consultant. 1. Referrals. Not surprisingly, most organizations find their consultants through colleagues’ recommendations. So get on the phone, go to an association or community meeting, and start asking people you trust for names of good consultants. 2. Management support organizations and state nonprofit associations. Many communities have a management support organization (MSO), a nonprofit resource center, a United Way agency, or a branch of the Executive Service Corps. These groups are dedicated to helping nonprofits access resources and build capacity. CAN publishes the Nonprofit Yellow Pages Resource Directory, which lists nonprofit consultants. It’s available on the CAN website (www.CAnonprofits.org). 3. Your funders. Many foundations now have in-house technical assistance providers, retain outside consultants to help their grantees, or will refer independent consultants if asked. 4. Large national firms. Some consulting firms allow their consultants to do pro bono or low-cost work for a nonprofit organization. While a cold call may not yield much, you should take advantage of any connections you have through your staff, board, or clients to access this high-quality help (See sidebar on page 5). 5. Online and print directories. Your local MSO or public library should have the major printed consultant directories. If you are a proficient Web surfer, you can also hunt for potential consultants online. Use these sources as a last resort or as a means of rounding out your list of referrals. Step 6: Agree on the work to be done. If your contract or letter of agreement is a separate document from the proposal, it should describe the following, at a minimum: 1. Work to be done. 2. Timelines for deliverables. 3. Who will carry out the consulting work. 4. Details about fees and expenses, including the timing and proper procedure for invoicing and payment. 5. The person within your organization who is responsible for managing the consulting project and approving expenses and invoices. 6. A termination clause permitting either party to terminate the consulting relationship with reasonable notice and payment for work completed to date. This last item is particularly important, both for you and your consultant. If the timeline, deliverables, or even daily interactions are not proceeding as planned, the problem must be addressed at once. If it remains troublesome, do not continue spending your money on a relationship that isn’t working: terminate the contract immediately. CAN or your local MSO can often help you resolve such conflicts – or decide when to bow out gracefully. Step 7: Work effectively with the consultant during the engagement. • Prepare your staff. Most people get a little nervous when a consultant shows up, since consultants usually mean change. Spend time before the engagement explaining the project to your staff, including the problem statement, your objectives, the specifics of the proposal, and what is expected of each staff member. • Clarify the role, status and authority of the consultant. You, your consultant and your staff should have a clear understanding of the consultant’s role in the organization. To whom does the consultant “report”? Where will the consultant sit when onsite? Can he or she ask support staff for administrative help? • Take responsibility for the project. Successful consulting engagements cannot be one-sided. As a client, you need to provide context and direction for the project and make important decisions along the way. The consultant is there to help you solve your problem, not to tackle it alone. • Stick to the terms of the contract. It is tempting, once the consultant shows up, to expand the scope of the project or ask her to take on additional work. Resist this impulse. You will compromise the quality of her work, and you may damage a helpful relationship. Also, added work can result in a new workplan and increased fees! • Give the consultant what she needs to be productive. Your money will be best spent if you prepare for the consultant’s arrival and help her to be productive. Assemble any existing data or other resources that pertain to the project. If the consultant needs a phone or printer when onsite, make one available. If she needs access to your board or clients, facilitate that connection. Step 8: Wrap up the engagement. 1. Approve the consultant’s final report or recommendations, including an implementation plan. 2. Present the report and implementation plans to your staff, board, and other key players. Determine the organization’s course of action given the outcome of the project, and secure the board’s commitment to that course. 3. Clarify next steps with the consultant. Will there be follow-up work? Is the consultant available for hourly consultation as you implement her recommendations? Have all working papers from the project been transferred to your staff? Have all borrowed materials been returned? 4. Make sure all the terms of the contract and/or proposal have been met before approving final payment to the consultant. 5. Bring explicit and symbolic closure to the project. This can be as simple as an e-mail announcement or as elaborate as a celebration luncheon for everyone involved, complete with certificates of participation or other mementos. Step 9: Implement the results and recommendations. 1. If you have not already done so (as outlined in Step 8), secure commitment from your board and staff to go forward with the recommendations and implementation plan. 2. Use the implementation plan to create a detailed work plan with time frames, quantitative and qualitative evaluation measures, and division of responsibilities. 3. Establish a system for tracking the progress of implementation, and incorporate progress reports into staff and board meetings as appropriate. 4. Provide support for ongoing trouble-shooting and refinement of the implementation process. If necessary, write a reminder in your calendar every week or month to focus on implementation. Step 10: Evaluate the consultant and the project results. A Final Note Bringing a new face and new perspective into your organization to tackle a difficult or persistent problem can be daunting. With significant expenses involved, it can also feel like a risky move that might yield minimal returns. On the other hand, some organizational challenges simply cannot be overcome without outside help. If you think a consultant can add real value and insight in your quest for change, these ten steps should help you find and work with the best consultant for your specific needs. Good luck!
7.
What is UBIT (Unrelated Business Income Tax)?
Unrelated Business Income Tax (UBIT) is the tax paid on income generated from a trade or business activity that is unrelated to an organizations exempt purpose. Why are organizations that are supposed to be exempt subject to this tax? The primary objective of the unrelated business income tax is to eliminate a source of unfair competition by placing the unrelated business activities of exempt organizations on the same tax basis as that of for-profit enterprise. Therefore, the primary purpose of the unrelated business income tax provision is not to prevent competition for revenues between nonprofit and for-profit organizations, but to place such competition on equal footing from a tax standpoint. How do I know what income is subject to UBIT? Three factors or tests of how the income is generated must be met: 1) Non profit organization conducts a trade or business, Factor #1: Trade or Business: Factor #2: Not Substantially Related to the Nonprofit Purpose: Factor #3: Regularly Carried On: Factors determining if an activity is "regularly carried on": • Frequency of the activity. There are some exceptions to unrelated trade or business classification. They are: • Volunteers are performing substantially all the work of the trade or business. To learn more visit: “A Few Bites of UBIT” http://www.ncnonprofits.org/faq/ubit.pdf Urban Institute: http://www.urban.org/UploadedPDF/philanthropy_3.pdf (The information provided is not intended as legal or financial advice. Please see an appropriate professional for advice related to this topic) 8.
Is there a new mileage rate for 2004?
The IRS has announced that the standard business mileage rate for transportation expenses paid or incurred beginning The mileage rate allowances for 2003 and 2004 are as follows: Type of Use: 2003 Rate 2004 Rate Business Use of a Vehicle 36 cents/mile 37.5 cents/mile Charitable Use of a Vehicle 14 cents/mile 14 cents/mile Medical or Moving Use of a Vehicle 12 cents/mile 14 cents/mile The standard mileage rates for business, medical and moving purposes are based on an annual study of the fixed and variable costs of operating an automobile. The primary reason for the mileage rate increases is the rise in fuel prices during the study period, which ended on To learn more visit http://www.irs.gov/newsroom/article/0%2C%2Cid=114320%2C00.html 9.
What basic information do nonprofits need to know about filing the Form 990?
A: Nonprofits must file annual "information returns using Federal Form 990 ("Return of Organizations Exempt from Income Tax") or Form 990EZ. The form is a compilation of financial information, program activities, names of board members, and other basic information. Form 990EZ is a shortened version of Form 990 for smaller organizations. Schedule A, a component of Form 990, compiles sources of financial support and the salaries of highest-paid employees. Since form 990 is a public document, anyone may obtain a copy of your Form 990. Nonprofit organizations with total annual receipts "normally" over $25,000 must file Form 990 each year. If gross annual receipts are between $25,000 and $100,000, AND if your assets are less than $250,000, Form 990EZ may be filed instead. Form 990 is due 4 1/2 months after the close of your fiscal year. For example, if your fiscal year ends on June 30, Form 990 is due on November 15. If your fiscal year ends on December 31, Form 990 is due on May 15. The IRS will accept a Form 990 that has been postmarked on the due date. The fine for filing a late or incomplete form is $20/day up to the lesser of $10,000 or 5% of gross receipts. For organizations with gross receipts of more than $1 million in the year, the penalty is increased to $100/day to a maximum of $50,000. Your board can be held responsible for paying the fines which accrue for late or incomplete forms. Copies of blank 990s, and samples of completed ones, can be downloaded in several formats from the IRS website at http://www.irs.gov/bus_info/eo/eo-tkit.html It is expected that the IRS will make e-filing of the Form 990 available early this year. SCANPO will keep you posted on the opportunity to file your 2003 Form 990 electronically. 10.
What is SCANPO’s new on-line consultant database?
Q. What is SCANPO’s new on-line consultant database? Q. What type of consultants are included? A. An organization should commit proper resources to obtain carefully-chosen professional assistance, when needed. The observations and assistance of an outside professional can also mean savings and efficiency for an organization in the long run. Q. Does SCANPO refer consultants to nonprofit organizations? A. Yes, nonprofit organizations can call the SCANPO Nonprofit Hotline (800-438-8508) and speak with SCANPO staff to determine the nonprofit organizations specific needs and match those needs with the most appropriate consultant(s). **SCANPO makes no representation, recommendation or endorsement of the consultants or businesses listed in the on-line database. Some consultants or businesses may answer simple questions for free; however, others may charge for their services. Q. What should I do if I provide professional services and would like to be listed in the database? A. You can complete an on-line Application for Consideration at www.scanpo.org. If you have additional questions regarding the on-line consultant database or would like a referral for a consultant, facilitator, or trainer, please contact Joy Young, Director of Technical Assistance at 803-929-0399 or e-mail joy@scanpo.org. 11.
What types of insurance should my organization consider?
You have life, health, and property insurance. Each is very important to protect you in your personal life. In the same way your personal insurance covers you and your property, your organization needs insurance to? As you consider insurance, think about the risks that are involved in not being insured or under-insured. You need to know where your organization is exposed to risks. Is it from staff, events, theft, fire, natural disasters, work-place safety, vehicles, or computer/web site security? Depending on the type of events or services your organization engages, you may need all, some, or other types of insurance that are not listed. Evaluate your organizations needs and review the list below to determine the type of insurance your organization might consider. SCANPO offers its members discounted rates on D & O Liability insurance through Marsh Advantage 12.
What contributions donated to nonprofits should be accounted for?
Nonprofits which qualify for tax exempt status under section 501(c)(3) of the Internal Revenue Code are entitled to receive contributions that are tax deductible to the donor. Since this is unique to the nonprofit sector, there are no equivalent procedures for handling contributions in for-profit accounting. Special procedures have been established for handling the following types of contributions: • Special Events and Membership Dues: People who pay to attend fundraisers (such as dinners, auctions, fashion shows, bake sales, etc.) often receive a tangible benefit in return (a meal, a performance, etc.) Similarly, membership dues may entitle individuals to use facilities, receive services, etc. The portion of the special event charge or membership dues which represents the fair market value of the benefit received is not tax deductible to the donor. Some minimal benefits are excluded from this rule. • Pledges: (Promises to Give) In 1993, the Financial Accounting Standards Board (FASB) issued the Statement of Financial Accounting Standards No. 116, Accounting for Contributions Received and Contributions Made. This Statement sets down firm guidelines for pledge accounting, requiring that legally enforceable, unconditional pledges be recorded in the accounting records. An unconditional pledge is one which is not contingent on some uncertain future event, such as a matching grant from another donor. 13.
Since I don’t have gross receipts of over $25,000, do I have to worry about the IRS Form 990?
You should never worry about completing the IRS form 990. However, many organizations see it as a relief to learn that IRS Form 990 is not required when gross receipts are less than $25,000. However, you should consider filing a blank form 990 than not to file at all. Here’s why: Don’t worry, be happy! 14.
Can volunteers receive tax deductions?
Adapted from Volunteers may not deduct the value of their time spent volunteering, however, they can deduct related out-of-pocket expenses such as phone calls, postage, and transportation costs. If a volunteer uses their car to travel to and from their volunteer commitments, they can deduct the actual cost of gas and oil as well as parking fees and tolls. They can also claim other incidental expenses, such as the cost of cleaning a volunteer uniform. If a volunteer is required to travel away from home overnight, they can deduct lodging costs and a portion of the amount spent on meals—as long as there is no "significant amount of personal pleasure, recreation or vacation" to the trip. These out-of-pocket expenses are categorized as cash contributions and should be entered as such on the volunteer's tax return. For additional information on volunteers and volunteer management, try these websites: VolunteerToday.com: http://www.volunteertoday.com/internet.html Energize: www.energizeinc.com 15.
Can my board meet via e-mail or telephone or vote via telephone?
A budgetary crunch, lack of time, or scheduling difficulties may make holding “virtual” meetings seem like a good idea. While your organizations by-laws govern how your board operates, special consideration should be given to the pros and cons of conducting business via the internet or telephone. Please see the link below to an opinion on the matter, questions and answers, and a link to the South Carolina Code of Laws. Since the information provided is general, your board should seek legal advice before switching to electronic meetings. Quote on technology: “Computers are magnificent tools for the realization of our dreams, but no machine can replace the human spark of spirit, compassion, love, and understanding. “ - Louis Gerstner, CEO, IBM Electronic Board Meeting Q&A SC Code of Laws--Regular and special meetings. Electronic Meetings | ||||||||||||||||||
