#GivingTuesday: Ideas for Your Nonprofit
Black Friday, Small Business Saturday, Sofa Sunday, Cyber Monday, and don't forget Giving Tuesday. Giving Tuesday is a global giving movement the Tuesday following Thanksgiving, which is strategically placed on the calendar when individuals and corporations focus on their holiday and year-end giving. This year alone, the movement has facilitated the donation of $177 M in 98 countries. Does your nonprofit take advantage of #GivingTuesday?
GivingTuesday.org provides several ways to make the most of the day in its toolkit for nonprofits. Here are few ideas:
Get Creative: Many nonprofits are personalizing #GivingTuesday to fit the identity and mission of the nonprofit. Examples include #GivingZooDay or #GivingShoesDay.
Matching Requests: Many donors work for companies that match donations made by employees. Encourage your donors to submit matching gift requests, which doubles the gift amount.
Matching Grants: Ask board members or sponsors to put up a matching gift. You can use this to incentivize new or larger donations or to kick off your end-of-year campaign.
Get Social and Mobile: #GivingTuesday is a great day to engage your online community and transform followers and fans into donors.
Volunteering: Organize a volunteer project for your organization. Invite donors, employees and your neighbors to get together to celebrate giving by creating a day of service.
Ideas like these along with case studies can be found online at
. There you can also discover ways for individuals, foundations and companies to get involved in the movement.
|Free Webinar: Payroll and Year-End Reporting
Date: December 7, 2017
Time: 9:00 -10:30 a.m.
As an employer, you know year-end payroll processing and reporting is a complex duty that adds to the stress of closing the books for the year. To ensure a smooth, error-free year, please join us for our Payroll and Year-End Reporting Webinar. This webinar is offered to bookkeepers, business owners and payroll professionals free of charge.
We will address compliance issues of year-end payroll processing and reporting and bring you up to date on the latest changes that affect the close of 2017 and beginning of 2018. Topics covered in the hour and a half webinar will include:
- Fringe benefits
- W-2 add backs
- ACA reporting
- Independent contractor issues
- 1099 rules and due dates
Reserve Your Spot Today.
|Nonprofit Tax Tidbits: Form 990 Schedule C
The third installment in our series on the sections of the IRS Form 990 will focus on Schedule C - Political Campaign and Lobbying Activities.
Schedule C is used by Section 501(c) organizations and Section 527 organizations to furnish additional information on political campaign activities or lobbying activities. An organization that answers "Yes" on Form 990, Part IV, Checklist of Required Schedules, line 3 (political campaign activities), line 4 (lobbying activities), or line 5 (membership dues or assessments) or on Form 990-EZ, Part V, line 46 (political campaign activities) or Part VI, line 47 (lobbying activities), must complete the appropriate parts of Schedule C. An organization that answers "Yes" on Form 990-EZ, Part V, line 35c, because it is subject to the section 6033(e) notice and reporting requirements and proxy tax, must complete Schedule C, Part III. In addition, if an organization has an ownership interest in a joint venture that conducts political campaign or lobbying activities, the organization must report its share of such activity occurring in its tax year on Schedule C.
What Are Political Campaign Activities?
Political campaign activities are those that support or oppose candidates for elective federal, state or local public office. Political expenditures consist of any direct or indirect expenditure made to support these activities, including a payment, distribution, loan, advance, deposit, or gift of money or anything of value. Political campaign activities do not include any activity to encourage participation in the electoral process, such as voter registration or voter education, provided that the activity does not directly or indirectly support or oppose any candidate.
What Are Lobbying Activities?
Lobbying activities are those intended to influence foreign, national, state or local legislation. Such activities include direct lobbying (attempting to influence the legislators) and grassroots lobbying (attempting to influence legislation by influencing the general public). Lobbying expenditures (including allocable overhead and administrative costs) are costs paid or incurred for the purpose of attempting to influence legislation.
Note: Tax-exempt nonprofit organizations categorized as a 501(c)(3) are generally permitted to perform some amount of lobbying activities (cannot be substantial) but are absolutely prohibited from engaging in political activities. Violations of the regulations controlling political and lobbying activities can result in loss of tax-exempt recognition or the incurrence of fines (in the form of excise taxes described in IRC 4955).
3 Parts of Schedule C
This section is completed by organizations that have engaged in direct or indirect political campaign activities. Completion of the various subsections of Part 1 is determined by the type of organization you are.
- Part 1-A (501(c) and 527 organizations): Requires a description of an organization's political campaign activities, the amount spent conducting those activities, and a reasonable estimate of volunteer hours used on those activities.
- Part 1-B (501(c)(3) only): Requires disclosure of any excise tax incurred during the year under section 4955 by organization or organization managers and a description of the steps taken to correct the activity that subjected it to the 4955 tax.
- Part 1-C (501(c), excluding 501(c)(3)): Requires disclosure of amounts expended by the filing organization or amounts contributed to other organizations by the filing organization for section 527 exempt function activities. Also required is specific information about the 527 political organizations to which payments were made.
This section applies only to 501(c)(3) organizations that have engaged in lobbying activities. As previously mentioned, a 501(c)(3) is precluded from devoting a substantial part of its efforts to lobbying. To clarify the definition of substantial, Congress enacted guidelines allowing eligible organizations to elect to use IRS Sec. 501(h) (by filing Form 5768 with the IRS) which details out how much an organization can spend on legislation without risking their tax exempt status:
- 20% of the first $500,000 of exempt purpose expenditures, plus
- 15% of the next $500,000, plus
- 10% of the next $500,000, plus
- 5% of any remaining expenditures (to a cap of $1,000,000 of total lobbying expenditure)
Additionally, there is a separate limitation on grassroots lobbying expenditures, which is equal to 25% of the limitation for total lobbying expenditures (up to $250,000 max).
- Part II-A: Requires disclosure of lobbying costs incurred by organizations that have a valid election under 501(h).
- Part II-B: Requires disclosure of lobbying costs incurred by organizations that have not filed for the 501(h) expenditure election and includes questions regarding the loss of 501(c)(3) status or taxes imposed because of substantial lobbying.
This section applies to 501(c)(4), 501(c)(5), and 501(c)(6) organizations that received membership dues, assessments or similar amounts as defined in Revenue Procedure 98-19. These organizations are potentially subject to Section 6033(e) Notice and Reporting Requirements and Proxy Tax which requires them to tell their members what portion of their membership dues were allocable to the political or lobbying activities of the organization. If this information is not provided, the organization is subject to a proxy tax (reported on Form 990-T).
- Part III-A: Requires organizations to answer questions to determine if the notice and reporting requirements apply. If they do, completion of Part III-B is required.
- Part III-B: Requires organizations to report the aggregate amounts of the following: dues/assessments received from members, lobbying and political expenses incurred, and the nondeductible dues amount reported to members (through timely notification) to determine if a proxy tax is owed.
If you believe you have engaged in (or plan to engage in) political or lobbying activities or have any questions regarding Schedule C of the Form 990, please contact your Hawkins Ash CPAs representative.
Author: Matt Neu, CPA
New I-9 Form: What Has Changed?
- All references to the department were updated from "Office of Special Counsel for Immigration-Related Unfair Employment Practices" to the "Immigration and Employee Rights Section."
- In the list of acceptable documents, List C (to establish employment authorization), a few items (Forms FS-545, DS-1350, and FS-240) were combined into one item.
- The Consular Report of Birth Abroad (Form FS-240) was added to the drop-down menu of Sections 2 and 3 (only if the form is completed on a computer).
- Various wording and numbering changes.
The revision date on the form is now 07/17/17 N. The form must be used as of September 18, 2017.
The changes may seem trivial, but it's very important to use the most recent form. More I-9 audits are being performed, and fines for violations are also on the rise.
Author: Debbie Denny
Starting a Nonprofit In Minnesota
Starting a Nonprofit Organization (NPO) takes a lot of work and dedication. Before the actual purpose of the Organization can be started, a lot of paperwork needs to be filled out and filed with the State of Minnesota and the Internal Revenue Service. Below are basic guidelines for starting an NPO in Minnesota.
The Minnesota Nonprofit Corporation Act governs nonprofits in the state of Minnesota. Minn. Stat. ch 317A. Nonprofits outside Minnesota should check with their state's regulations bodies.
Develop Board of Directors
First you need to find other people who believe in what the NPO's purpose is
and are willing to serve. This first group, known as the board of directors, will be responsible for writing the articles of incorporation and the initial by-laws. It is the job of the board of directors to ensure that the organization's actions follow its mission and purpose. They will also be in charge of fundraising, creating the organization's policies, and hiring staff.
Create a Name
Next, develop a name for the NPO. The NPO will want to make sure the name is unique and helps identify its purpose or distinguish it from other nonprofit organizations. The Minnesota Secretary of State's (MN SOS) Office website will have a list of names that are already reserved. There, you can also reserve the chosen name.
Write Articles of Incorporation
Next, write the articles of incorporation (Articles). These are written to minimize the financial risks of the board of directors and provide the information necessary to file for tax-exempt status if the board decides to do so. The Articles only need to be submitted once, along with a $70 filing fee. Sending a $35 re-filing fee to the Minnesota SOS can amend the Articles.
If the NPO decides to become a 501(c)(3) entity, there are additional language requirements that need to be written in the Articles before filing for the tax-exempt status from the Internal Revenue Service (IRS). There are templates and examples of the language required by the IRS at:
If the NPO decides not to apply for tax-exempt status, it can fill out a form online on the Secretary of State's Office website at:
The MN SOS only requires the Articles to include the name of the NPO, the name and address of the NPO's registered agent, a statement that it complies with the applicable chapter of the Minnesota statutes, and the incorporator's name, address and signature.
The next step is to write the NPO's By-laws. By-laws are the rules that the NPO will follow in deciding who can be a member of the NPO (including both board of directors and/or voting members), how many members there will be, and what their responsibilities will include. The by-laws also lay out what a quorum will be, when meetings will take place, who will be hired as the executive director, the cost of dues, if there are voting members, and all other aspects of duties, elections, etc. of the directors or members.
Hold First Meeting
Next, the NPO should hold the first board of directors/membership meeting to approve the Articles and by-laws, decide the fiscal year the NPO will follow, and approve the initial transactions needed to get the NPO set up, such as filing the Articles, opening a bank account, etc.
Obtain and Maintain Tax-Exempt Status
Before applying for the 501(c)(3), the NPO needs to apply for a Federal and State tax employee identification number (EIN), even if there are no employees. Once the Federal EIN is received, the NPO can apply for tax-exempt status by filing the 1023 or 1023EZ form, whichever is applicable to the NPO. The NPO will be exempt from Minnesota state income if it is granted the Federal tax-exempt status. The NPO can go to the Minnesota State Revenue website to see if they are eligible to be exempt from property and sales tax.
The NPO may also need to register as a charity with the state Attorney General's office, depending on the size of the NPO and its activities.
To maintain its status, the NPO will need to file an online annual registration with the MN SOS office. Failure to register by December 31st each year results in the dissolution of the NPO, but it can be reinstated for a $25 fee.
As well as the annual renewal of registration, the NPO will also need to file an annual Form 990, or similar, to the IRS, depending on the size of the NPO. A Charitable Organization's Annual Report Form will also need to be filed annually to the Minnesota Attorney General's Office.
Set up a filing system to keep all important records of the NPO, as some information needs to be kept permanently per the IRS retention regulations.
Starting an NPO can be a rewarding but challenging endeavor. By researching and following the guidelines found at the MN SOS and MN Council of NonProfits websites, the reward can be much greater than the challenges.
Author: Claudia Weinberger, CPA
|Client Feature: Court Appointed Special Advocates (CASA)
Court Appointed Special Advocates (CASA) of Brown County is a nonprofit organization that for 13 years has provided a voice for abused and neglected children who are under the legal protection of the court system. The organization relies heavily on volunteers who are supported by CASA staff. Volunteers are referred to as the "eyes and ears of the court" and are often the only consistent adult in a child's life while in the protection of the court.
CASA volunteers receive 30 hours of training before being sworn in by the court. A CASA volunteer visits the child weekly and submits a monthly report to the judge on the child's safety and well-being to help that judge make important decisions on the child's future.
During their visits, CASA volunteers play games and make crafts or engage in sensory activities with the children in effort to build trust and relationships. Research has shown that a child with a CASA volunteer is more likely to get help with other services, spend less time in foster care and be moved from home to home, find a safe and permanent home and do better in school.
Deb Rose, a CASA volunteer of four years, recalls the progression of a child. "I visited this young child first in a foster home, day care, school and finally at a home with a parent, which is ultimately the desired outcome." She went on to say, "Volunteering with CASA is a deeply humbling way to connect and serve the community."
In 2016, CASA of Brown County reported having 136 volunteers who served 245 children. Also in 2016, CASA of Brown County expanded services to Marinette County, about an hour north of Green Bay, WI, which currently has 21 volunteers who have served 32 children. A concert is set for December 2 to raise funds to help support the Marinette County CASA Program.
To learn about how to become a CASA volunteer or to provide support, visit
. CASA of Brown County is affiliated with the National CASA Association. To find a CASA program near you, visit