Non-Profit Law

Monday, May 8, 2017

Building an Effective Nonprofit Board


Are your board members willing to invest their time, talent and financial resources for the long term?

Does your board understand its role and responsibilities?

Are your board members engaged? Do they attend meetings and serve on a committee?  Are they united for a sustained effort in cultivating donors?  

Has your board adopted legally compliant organizational documents and appropriate board policies? 

 A strong, engaged and active board is critical to the long-term success of any nonprofit organization. Often, the most challenging obstacles are in implementing a viable governing body that will be best suited to lead the organization, fulfill its mission and sustain financial viability.


The easiest place to start is by identifying skill sets among current board members. Each board member should bring a skill set or skill sets that will have an impact on the success of the nonprofit organization. This requires that each board member understand both his or her individual and collective roles in serving on the board and guiding the charitable organization in meeting its mission.
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Tuesday, July 12, 2016

Types of Tax-Exempt Organizations

What are the various kinds of tax-exempt organizations and how do they differ?

The most common types of tax-exempt organizations recognized by the Internal Revenue Code are those which meet charitable, religious, scientific, literary and other exempt status under section 501 (c)(3) of the Code.

Other tax-exempt organizations are referred to as having "life cycles," meaning that they must provide the IRS with forms, files, annual information guides, and explanations of their mission and purpose during their existence. They fall into the following categories:

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Tuesday, July 12, 2016

Acknowledging Charitable Contributions

What are the rules for acknowledging charitable contributions?

Tax exempt, nonprofit charitable organizations that engage in fundraising in Connecticut are subject to IRS regulations concerning substantiation and disclosure requirements of donations. While the onus is on donors to obtain sufficient written acknowledgment of a contribution, there are requirements applicable to nonprofits to protect the donor's tax-deduction.

Currently, federal tax law requires donors who claim a charitable contribution deduction of $250 or more to substantiate it with a "contemporaneous written acknowledgment" from the charity. Contemporaneous acknowledgment means the donor must receive it either by the date when he or she actually files a tax return or the due date of the return, whichever is earlier.

The acknowledgment must include the name of the organization, the date of the donation, the amount of the contribution or a description of non-cash contributions.

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Thursday, December 3, 2015

Eligibility Requirements of 501(c)(3) Charitable Organizations

A 501(c)(3) tax-exempt organization is a type of non-profit that is dedicated to the charitable purposes set forth in section 501(c)(3) of the Internal Revenue Code. This includes organizations whose purposes are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, or preventing cruelty to children or animals. If all requirements are met, the charity will be exempt from paying corporate income tax, although the Form 990, an informational tax return, must be filed annually.

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Tuesday, August 4, 2015

Basics of Obtaining 501(c)(3) Tax-Exempt Status

We are a charitable organization and want to be classified as a 501(c)(3) tax-exempt organization. Where do we start? 

You’ve selected the board of directors, drafted the bylaws, and successfully incorporated your organization under your state’s not-for-profit corporation laws. From there, the next – and possibly most daunting – task is submitting the necessary paperwork to the Internal Revenue Service to achieve tax-exempt status. Federal tax-exemption is necessary for exemption from local, state and federal taxes, to qualify for many types of grants, and to be eligible to receive tax-deductible donations and contributions from individuals and other charitable organizations. While filing paperwork with the IRS isn't exactly the highlight of starting a charity, the process of obtaining tax-exemption need not be stressful -– especially with the right support.

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Monday, August 3, 2015

Advice for Non-Profits Regarding Interested-Party Compensation

What is the best way to ethically handle a board discussion on compensation for our non-profit’s executive staff?

When it comes to a boardroom discussion, few topics are more uncomfortable than those involving compensation packages to executives, directors, and staff members. For one, non-profits often strive to be as fiscally careful as possible, and will work tirelessly to ensure each donated dollar is spent wisely and in line with the group’s designated purpose. Secondly, there is an inherent conflict of interest when a board member discusses and/or votes on his or her own compensation package – a concept known as “interested-party compensation.”

If your board is facing this issue, or you believe it may be an issue in the not-too-distant future, be sure to contact attorney Claudia Pollak for sound advice on state and federal non-profit laws – and save yourself from having to undo the deal in the future.

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