Exempt Org. Resource Blog

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ExemptOrgResource.com is an online resource for information and insight on the unique legal issues impacting nonprofit organizations. The blog is designed to keep the nonprofit, tax-exempt organization community up-to-date on legal developments, changing regulations and good practices.

Department of Education Rescinds Obama-Era Title IX Guidance in Advance of New Rulemaking

This morning, the Office for Civil Rights of the Department of Education issued a “Dear Colleague” letter rescinding the Obama administration’s school sexual assault guidance.  The Department also issued a new set of Questions and Answers on Campus Sexual Misconduct.  The new guidance follows a speech delivered by Secretary of Education Betsy DeVos earlier this month in which Secretary DeVos announced a formal rulemaking process regarding the process colleges and universities must follow with respect to Title IX-related complaints.  We recommend that educational organizations review this new guidance.

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A Minute Guide to Minutes

Among the many elements of corporate housekeeping and compliance that demand the time and attention of directors and officers (and staff), minutes often seem like a burden.  No one doubts that minutes matter.  A well-documented board meeting creates an important historical record that can guide future deliberations and may prove useful during Board disagreements, litigation, Attorney General investigations, other governmental enforcement actions, or an audit by the IRS.  However, clients often nervously ask whether there is a legal standard regarding how much detail minutes should contain. 

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President Trump’s New Johnson Amendment Executive Order: Is the Bark Worse than the Bite?

Earlier this week we reported on proposed bills regarding the repeal or modification of the “Johnson Amendment” which established the absolute prohibition on political campaign activity by 501(c)(3) charitable organizations.  On May 4, President Trump issued an executive order, “Promoting Free Speech and Religious Liberty,” which, among other things, addresses enforcement of the prohibition by the Internal Revenue Service (IRS).

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Update on Johnson Amendment Repeal Bills

During his presidential campaign, President Trump promised to repeal the “Johnson Amendment” which established the absolute prohibition on political campaign activity by 501(c)(3) charitable organizations.  After his inauguration, President Trump promised to “destroy” the amendment (specifically with respect to churches), and three bills have been introduced in the 115th Congress to modify the prohibition or eliminate it completely for all 501(c)(3) charitable organizations.

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EOs and EOs: Exempt Organizations and Presidential Executive Orders

In the twelve days since his inauguration, President Donald Trump has issued a flurry of executive orders relating to, among other things, the proposed repeal of the Affordable Care Act, the construction of oil pipelines, the building of a wall on the Mexican border, and immigration restrictions.  These executive orders have begun the process of fulfilling many of the promises President Trump made during the campaign, and it seems likely that additional executive orders will continue to be issued.

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Proposed Legislation Would Allow Limited Political Campaign Activity for Charitable Organizations

Recently, we wrote about the absolute prohibition on political campaign activity by 501(c)(3) charitable organizations, and the importance of managing the use of social media to avoid violating these rules.  This prohibition has gained national attention during the 2016 election cycle, with Donald Trump vowing to repeal the “Johnson Amendment,” so named because then-senator Lyndon B....
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Trending Now: Political Activities and Social Media

The 2016 U.S. presidential campaign has reached a fevered pitch, with a little over a month remaining before Election Day.  After Monday’s debate between Hillary Clinton and Donald Trump, the stakes are high and the American public is turning to social media to express powerful emotions ranging from excitement to exhaustion, and to support their chosen candidate (or oppose the other).  

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Fall into the GAAP: New Not-for-Profit Financial Reporting Standards Issued

As we previously reported, in April 2015 the Financial Accounting Standards Board (“FASB”) circulated a series of proposed changes to generally accepted accounting principles applicable to certain not-for-profit entities in order to provide clearer information to donors, creditors, and other users of financial statements.  On August 18, FASB issued the related accounting standards update.

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Keep Calm and Carry On: Philanthropy After Brexit

On June 23, the people of the United Kingdom voted to leave the European Union.  The decision to leave—commonly known as “Brexit”—has dominated headlines, rattled financial markets, and triggered political uncertainty in the United Kingdom and throughout the world.  Although the United Kingdom has not yet formally initiated the two-year process to leave the European Union, political, financial, and legal experts are actively working to determine Brexit’s short- and long-term implications.

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New Website Brings History of Giving to Life

On April 27, National Philanthropic Trust, a public charity dedicated to providing philanthropic expertise to donors, foundations and financial institutions, launched a website on the History of Modern Philanthropy.

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IRS Withdraws Controversial Proposed Regulations

The people have spoken. After receiving widespread criticism, the Internal Revenue Service (“IRS”) has withdrawn proposed regulations regarding the substantiation of charitable contributions.  

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Thanks But No Thanks: Proposed Charitable Gift Substantiation Regulations Receive a Critical Response

On September 18, the Department of the Treasury and Internal Revenue Service (the “IRS”) proposed regulations relating to the substantiation of charitable contributions made to Section 501(c)(3) organizations.  If approved, the proposed regulations would expand the ways in which charities can acknowledge donations.  Under the current regulations, charities must provide a contemporaneous written acknowledgement to donors who contribute $250 or more stating (i) the amount of cash and a description of any property other than cash contributed; (ii) whether any goods or services were provided by the organization in consideration of the contribution; and (iii) a description and good faith estimate of the value of any goods or services provided.  This acknowledgement is routinely provided as part of the “thank you’s” sent out by charities for contributions they receive, including those that fall below the $250 threshold.

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Mind the GAAP: Financial Reporting Impact of New Accounting Standards for Not-for-Profits

In April of this year, the Financial Accounting Standards Board (“FASB”) circulated a series of proposed changes to generally accepted accounting principles (“GAAP”) applicable to certain not-for-profits.  These changes, which are intended to provide clearer information to donors, creditors, and other users of financial statements, may have a significant impact on not-for-profit financial reporting (which has remained largely unchanged for nearly twenty years) and will, among other things, (i) impact the reporting of operating performance in an entity’s statement of activities and related metrics in the statement of cash flows, (ii) require the use of the direct method for preparing the statement of cash flows, and (iii) modify the reporting disclosure of net assets and “underwater” endowments.

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New York Not-For-Profit Board Chair Requirement Delayed Again

One of the more contentious requirements imposed by the New York Non-Profit Revitalization Act is the new Section 713(f) of the Not-for-Profit Corporation Law, which states that no employee of a not-for-profit organization can serve as Board chair or hold any title with similar responsibilities.  Implementation of Section 713(f) previously was delayed until January 1, 2016, and on October 26, Governor Andrew Cuomo signed into law a bill which delays the effective date, for another year, until January 1, 2017.  According to the memorandum accompanying the bill, the delay is necessary because “the Legislature requires more time to study the impact of this prohibition on not-for-profit organizations.”

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Federal Government and New York State Issue New Guidance on Title IX

Today, more than ever before, higher education lawyers are focusing their attention on issues of sexual harassment and sexual assault under Title IX of the Educational Amendments of 1972.  Title IX protects people from sex discrimination in educational programs and activities at institutions that receive federal financial assistance.  

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Federal Court Upholds New York Donor Disclosure Requirement

A federal district court in New York has upheld the New York Attorney General’s policy requiring registered charities to disclose the names, addresses and total contributions of their major donors.  This is the second federal court to rule on this issue, after the United States Court of Appeals for the Ninth Circuit upheld a similar requirement by California’s Attorney General in May in a suit brought by the Center for Competitive Politics, a 501(c)(3) public charity.

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What’s in a Name? Defining Fundraising Models for Nonprofits

An article in the Stanford Social Innovation Review suggests that the language non-profits use to describe their operations fails to adequately and efficiently convey the complexity of their work.  For-profits rely on a large vocabulary to describe their business models.  

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White House Announces MRI/PRI Guidance with a Focus on Climate Change and the Environment

On June 16, 2015, the White House issued a press release highlighting private sector commitments and a series of executive actions related to investment in clean energy innovation.  The release coincided with yesterday’s clean energy investment summit, at which Vice President Joe Biden described more than $4 billion of independent commitments by major foundations, institutional investors, and other long-term investors to fund climate change solutions, including innovative technologies with the potential to reduce carbon pollution.

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Attorney General Issues Audit Committee Guidance

The New York Attorney General has issued guidance about the audit oversight requirements under the Non-Profit Revitalization Act.  The AG’s Guidance—issued without fanfare by the Charities Bureau on February 24—will be of interest to most charities that are required to register to conduct charitable solicitations in New York.

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