The New 990
Completing the first major overhaul in a generation of the informational return that most charities must file with the federal government, the Internal Revenue Service released this week final instructions for the redesigned Form 990.
The IRS modified some language in the instructions, including tinkering with the definition of a “key employee” to limit the number of executives whose compensation must be reported.
Read more from The Chronicle of Philanthropy. And in all cases, consult your organization’s tax advisor or attorney to see how/if these changes will effect you.
The Art and Science of Philanthropy
The following is reprinted by permission from the June Donors’ Newsletter, a resource for donors and their advisors on overseas giving to Israel, published by Donor Associates in Israel.
“Though philanthropy often is - and should be - an emotional expression of personal values, donors must be cool-headed and thoughtful in their giving strategies.”
-Peter Frumkin
Strategic Giving: The Art & Science of Philanthropy
What criteria should a philanthropist use when considering support for a nonprofit organization?
Historically, overseas donors’ giving to Israel was a matter of the heart. They gave in an emotional response to the miracle of the State of Israel and a bond with the Jewish people. Their commitment was based on their identification, shared values, passion, and desire to forge a personal connection with the Zionist enterprise.
Over the past two decades, however, donors have been moving away from automatic giving to Israel, and toward a model that might be considered more “business-like.” For these, generally younger, philanthropists, giving also includes an element of the mind. Their involvement is somewhat akin to making a financial investment where planning, structure, procedures, measurement, monitoring, accountability, evaluation, effectiveness, and efficiency are essential tools in measuring the worthiness of a particular philanthropic investment. (more…)
Can-Span Update
New provisions to the FTC’s CAN-SPAM law will take affect on July 7, 2008.
The long-awaited final rule should provide email marketers some relief, particularly if they use multiple advertiser mailings or forward-to-a-friend campaigns. The new rule, in contrast to the FTC’s earlier proposed rule, does provide clear guidance to marketers but allows them some greater measure of flexibility in structuring and implementing their campaigns.
For specifics on how these changes might effect your organization, click here.
What the IRS Wants to Know About Your Non-profit
The increased emphasis on scrutiny of nonprofit governance by the IRS is evident from the fact that the newly revised Form 990 has several questions about governance prominent on the first page.
For example, Part 1 now requires an organization to enter the number of voting members who serve on the governing board and the number of independent voting members.
Among other questions on governance found within the revised 990:
- Whether there are existing familial or business relationships among officers, directors, trustees or key employees.
- Whether the organization delegates any management duties to a management company or other person.
- Whether the organization has local chapters, branches or affiliates, and if so, whether there are written policies and procedures governing their activities.
- Whether any significant changes were made to the organizational documents since the prior Form 990 was filed.
- Whether the organization became aware during the year of a material diversion of the organization’s assets.
- Whether the board was provided with a copy of Form 990 and how the board reviewed the form.
Please note: This post is intended as a general discussion of Federal tax compliance issues and not as advice or a professional opinion. They do not create any relationship between the reader and eJewish Philanthropy. We suggest you seek independent professional advice to act on any item discussed in this post.
In The News
Some links of interest over the past few days…
from our Jewish world:
Dame Vivien Duffield: ‘You’re lucky if you have one good relationship’
the woman behind one of the most progressive foundations in the UK; a major current initiative, the new Jewish Community Centre in London.
There are two strands to the small but powerfully built Dame Vivien Duffield: her fabled ability to raise money and her even greater enthusiasm for giving it away.
In a lifetime’s rampant philanthropy, she has parted with an estimated £176 ($350.) million from her various foundations and is still distributing £6 million a year.
SEVERAL ISRAELI organizations and institutions have begun marketing the concept of philanthropy. Aside from wanting to promote the idea of giving for the greater good, some of these organizations are marketing their own raison d’etre or their pet projects. Israel is marketing the development of the Negev and actively looking for foreign and local investors. If the Negev is to become the southern hub of Israeli hi-tech, it has to be able to include qualified personnel as the human assets in its marketing strategies. Moreover it has to provide adequate education facilities for people living in the area to want to stay there to study.
and from the business side:
Causes Reports On Its First Year - $2.5 Million For 20,000 Charities And NonProfits
Causes, a Facebook and MySpace application that promotes viral donations of time and money to charities and nonprofits, launched a year ago. They’ve now released statistics today on their usage and donation numbers for that first year.
The company says they’ve registered 12 million users who are now supporting more than 80,000 non-profit causes worldwide. $2.5 million has been raised for 19,445 different 501(c)(3) charitable organizations. Facebook reports 60,000 daily users of the application, and MySpace reports 25,000.
New IRS Rules Help Donors Vet Charities
Revised Tax Form Will Make Nonprofits Reveal More About How They Spend
Tax Exemptions of Charities Face New Challenges
Authorities from the local tax assessor to members of Congress are increasingly challenging the tax-exempt status of nonprofit institutions…
One issue is the growing confusion over what constitutes a charity at a time when nonprofit groups look more like businesses, charging fees and selling products and services to raise money, and state and local governments are under financial pressure because of lower tax revenues.
