Is it Time to Hire a CFO?

Let’s face it: Most not-for-profits are founded on a passionate belief in service. This does not always include a passion for numbers. To fill this gap in financial expertise, not-for-profits often hire chief financial officers (CFOs). However, do all not-for-profits — including small organizations — need one? CFO defined Generally, the CFO (or “director of […]

What Do You Know about Form 990? Board Review Can Benefit Not-For-Profit Governance

Most board members know — or should know — that the not-for-profit organization they serve files an annual Form 990 information return with the IRS. However, not every board member knows that they can, and should, review the form before it is submitted. Read on to learn why such board reviews are important and how […]

Charge It! Credit Card Issues for Not-For-Profits

Credit cards are a common part of doing day-to-day business for most not-for-profits these days. Donors typically use credit cards to make contributions, whether one-offs or recurring, and employees often rely on the cards when procuring supplies and services or traveling on behalf of their organizations. Some not-for-profits have, or have considered, so-called “affinity cards” […]

Classifying Workers as Employees or Independent Contractors: When Bringing Back Workers, Follow the Rules

Part of your not-for-profit organization’s entrance into the “new normal” not-for-profit world may involve rehiring workers — and perhaps hiring some new replacements. For tax obligation purposes, you will be required to classify those workers as employees or independent contractors (ICs). Sizing up Independent Contractor benefits Treating a worker as an independent contractor (IC) rather […]

Federal Appropriations Bill Provides Some Tax Changes for Exempt Organizations

On December 20, the Further Consolidated Appropriations Act, 2020 (H.R. 1865) was signed into law. It includes a number of tax-related items, two of which directly affect exempt organizations.

Deduct Now, Donate Later: Donor-Advised Funds Offer Significant Benefits

Taxpayers who are planning to make significant charitable donations should keep a donor-advised fund (DAF) in mind as an option. These funds offer many of the tax and estate planning benefits of private foundations, but at just a fraction of the cost. This article explains how a DAF works and its benefits, such as the ability to deduct DAF contributions immediately but make gifts to charities later. A Sidebar discusses how private foundations can offer important advantages for those who can afford them.

Pros and Cons of the For-Profit Subsidiary

In the wake of a drop in public grants and private donations, for-profit endeavors can have a magnetic appeal as not-for-profit organizations look for new revenue streams. But there are a number of factors that a not-for-profit should consider before taking on the significant cost and responsibility of operating a for-profit company. This blog details some incentives and drawbacks of for-profit subsidiaries.

Buyer Beware: UBIT Can Take a Bite Out of Alternative Investments

The uncertain economy and turbulent financial markets of recent years have led some not-for-profit organizations to turn to alternative investments. While these investments may hold the potential of higher returns, they also come with the risk of unrelated business income tax (UBIT). Even in the absence of tax liability, alternative investments can involve significant filing requirements.

What is UBIT?

One of the most attractive aspects of a not-for-profit organization is the ability to operate and produce income which is not subject to taxation. While this is generally the rule, there are situations where activities conducted by an organization can generate unrelated business taxable income. This post focuses on the definition of unrelated business income tax (UBIT) and what activities may trigger UBIT.

How to Define Business Transactions with Interested Persons

The redesign of Form 990 a few years back ushered in a wave of new reporting, most of which focused on transparency, governance and recordkeeping. One of the new schedules created from the redesign was Schedule L, Transactions with Interested Persons. The purpose of this schedule was to allow the IRS and the public to gain visibility into the dealings that organizations have with those close to the organization.

Charitable Aspects of the Fiscal Cliff Deal

A fiscal cliff deal finally materialized on January 2 with the passage of the American Taxpayer Relief Act of 2012. The legislation included a handful of new tax provisions as well as a significant number of tax extenders previously scheduled to expire either in 2011 or 2012. A few of these provisions and extenders will more than likely have a direct effect on charitable organizations and their fundraising efforts, including the reinstatement of the Pease limitation and the extension of the qualified charitable IRA distribution.

VOW to Hire a Veteran

Having just recently celebrated both Memorial Day and Independence Day, it seems like an appropriate time to discuss the government’s initiative to help employ veterans of the Armed Forces while incentivizing employers at the same time.

BINGO! What now?

In the current state of the economy, organizations are trying new and unique ways such as holding gaming activities including bingo, raffles, or card games either as stand-alone activities or as part of larger special events to draw in contributors. Gaming activities, however, come with a number of specific rules surrounding filing and withholding requirements that organizations need to be aware of prior to hosting these events.

Use It Or Lose It

The IRS recently issued a listing of approximately 275,000 organizations that have automatically lost their tax-exempt status due to non-filing of required annual reports for three consecutive years. This inclusive list represents organizations of all sizes and exemption types that had a filing requirement but did not file the required returns or notices for the 2007, 2008, and 2009 tax years.

Not-For-Profit Group Newsletter – Fall 2021

ORBA’s Not-For-Profit Newsletter provides four best practices for successful virtual events and covers the latest trends in employee philanthropic behavior.

Not-For-Profit Group Newsletter – Spring 2021

ORBA’s Not-For-Profit Newsletter details why not-for-profit organizations should track restricted contributions, spotlights surprise COVID relief audits and covers industry job market recovery.

Not-For-Profit Group Newsletter – Winter 2020

Our Not-For-Profit Group’s Winter 2020 newsletter discusses trends in the not-for-profit industry and tax changes regarding transportation benefits.

Not-For-Profit Group Newsletter — Summer 2016

ORBA’s Not-For-Profit Group Newsletter is a quarterly publication focused on effective not-for-profit organization management. The Summer 2016 issue includes two articles: “When Investment Income Counts as UBI” and “Newsbits: Summer 2016.’”

Illinois Exempts Transportation and Parking Benefits From Taxation for Not-for-Profit Organizations

Last month, Illinois Governor J.B. Pritzker signed SB1257 into law enacting changes, in part, to the state’s Income Tax Act.  A portion of the bill was aimed specifically at the state’s numerous not-for-profit organizations in an attempt to relieve additional burdens placed on them as a result of the Federal Tax Cuts & Jobs Act of 2017 (TCJA).  For tax years beginning on or after January 1, 2019, organizations subject to federal unrelated business income (UBI) taxation on expenses paid for certain qualified transportation fringes will no longer also be subject to taxation in Illinois on these expenses.

UBTI Guidance for Not-for-Profits Regarding Parking Expenses for Qualified Transportation Fringes

On December 10, 2018, the IRS released Notice 2018-99 to provide interim guidance on determining the amount of nondeductible parking expenses relating to qualified transportation fringes (QTF). A recent ORBA client alert IRS Provides Interim Guidance on Parking Expenses for Qualified Transportation Fringes,” discusses the details of the notice as it relates to for-profit companies.

IRS Provides Interim Guidance on Parking Expenses for Qualified Transportation Fringes

On December 10, 2018, the IRS released Notice 2018-99 to provide interim guidance on determining the amount of nondeductible parking expenses relating to qualified transportation fringes (QTF). The deductibility, or lack thereof, of QTFs was one of the changes to the tax code coming out of the recent Tax Cuts and Jobs Act.