May 2008
May 09, 2008
IRS Updates Rules on Dislosing Business Activities
The Internal Revenue Service has updated its guidelines that explain how charities must make public their Form 990-T filings, which list business activities not directly related to charity’s mission.
As part of the Pension Protection Act of 2006, charities that file the Form 990-T must now make their filings available for public inspection.
New IRS reporting guidelines released this week clarify the rules behind this requirement. Most notably, the guidelines say nonprofits must make filings available for three years after their filing date. The requirement applies to all Form 990-T filings made after August 17, 2006.
The tax agency’s guidelines also state that charities do not have to provide supporting documents and attachments that do not relate to the imposition of unrelated business income tax.
As a result, nonprofit groups do not have to make public Form 5471 (Information return of U.S. persons with respect to certain foreign corporations), Form 8886 (Reportable Transaction Disclosure Statement), and Form 8913 (Credit for federal telephone excise tax paid).
May 08, 2008
A Project to Create More Hillary Clintons
Despite Sen. Hillary Clinton’s historic run for the presidency, women are greatly underrepresented in the U.S. political system – -a scenario the White House Project is attempting to change.
Marie Wilson, the group’s president, told a session at a Council on Foundations conference about her group’s efforts to train women across the country to run for political office, calling it an example of nonpartisan political activity that is permitted under the tax code governing charities.
The United States ranks 71st in the world in the percentage of women serving in parliament (here, the House of Representatives). “It is not really a representative democracy,” said Ms. Wilson.
Ms. Wilson, who headed the Ms. Foundation for almost two decades before starting the White House Project in 1998, said many of the women who received grants from the foundation were creating innovative social programs that focused on HIV/AIDS, health care, small loans, and promoting a “living wage.”
“That’s the government in exile,” she thought, and wanted to find a way to give them more power. The White House Project, in New York, has trained 1,700 women over the past three years in the mechanics of running for office, touching on campaigning, communications, and fund raising, Ms. Wilson said.
But it has found the most effective way to persuade them to become candidates is to give them examples of other women who have made that leap — for example, by showing a documentary about Shirley Chisholm, a black congresswoman who ran for the Democratic presidential nomination in 1972. Many women are reluctant to step forward because they see so few other politicians who look like them, she said.
In that sense, she said, Senator Clinton has inspired more women to want to try politics, showing “you can get to the highest level.”
May 07, 2008
IRS Filing Deadline Is Fast Approaching for Small Charities
Next week comes the first annual deadline for the smallest nonprofit groups to comply with a new federal requirement to file annual information with the Internal Revenue Service, and a group of accountants in Connecticut want to make sure organizations are ready.
New tax law requires nonprofits groups with $25,000 or less in annual revenue to file the new Form 990-N informational tax return by the 15th day of the fifth month after the end of a fiscal year. For those operating on a calendar year, for example, the deadline would be May 15.
Previously, small groups were exempt from filing any returns with the IRS. To inform them of the new requirement, the IRS sent out 650,000 letters last year, and posted an online question-and-answer page meant to help organizations comply.
But Adam P. Cohen, a West Hartford accountant, thinks more ought to be done to get the word out about the new rule and to teach organizations how to file. So, in conjunction with the Connecticut Society of CPAs and a local group that offers pro-bono accounting services, Mr. Cohen has publicized information about the Forms 990-N, and is running free clinics this week to assist in their preparation.
Charity officials can visit the clinics on Friday afternoon at any of three libraries around the state to learn how to file the online Forms 990-N, also known as “e-postcards.”
The form requires only basic information, such as the name of a principal officer, a mailing address, and confirmation that gross receipts total less than $25,000. Still, some charity observers worry that many small organizations may be intimidated by the federal forms, and that many more may not even be aware they exist.
If an organization fails to file the Form 990-N three years in a row, the IRS will automatically revoke its tax-exempt status.
“My suspicion is that there are many micro-nonprofit groups that don’t know about the requirement,” Mr. Cohen says. “You might have the checkbook for your kid’s soccer league, but the information about your responsibilities has not reached you.”
— Debra E. Blum
May 03, 2008
Spreading Innovative Solutions to Society's Problems
A new project Public Innovators, seeks to build stronger ties between government officials and social entrepreneurs.
The premise is that people from both worlds have a lot to share with each other.
Social entrepreneurs have developed creative new approaches to many of the pressing problems that government officials are trying to solve in areas like education, health care, and poverty. Government, in turn, has the resources that social entrepreneurs need to expand the reach of their programs and create systemic change.
“What social entrepreneurs are really doing is they’re responding to market failures, not unlike a regular entrepreneur responds to market opportunities,” says Andrew Wolk, chief executive of Root Cause, the Cambridge, Mass., nonprofit group behind Public Innovators. “They are trying to do that by creating transformative, innovative solutions that are sustainable.”
Together with the Aspen Institute, a Washington think tank, Root Cause has published a report that discusses how government agencies could use their influence – and grant dollars – to encourage more innovative approaches to solving social problems.
Among the report’s recommendations: Government agencies should give nonprofit groups greater latitude in how they spend government grants to encourage creativity, but at the same time, set performance standards and publish results.
Over the next 18 months, Root Cause and Aspen plan to hold a series of meetings in cities nationwide to discuss how government officials and social entrepreneurs can do a better job of collaborating. Those discussions will be followed by a conference for government officials to come together to share lessons learned about working with social entrepreneurs.
May 01, 2008
How the Next President Plans to Help Young People
America’s Promise has asked the three presidential candidates about their views on children’s issues and how they were personally affected by the organization’s five promises to today’s young people — providing caring adults, safe places, a healthy start, effective education, and opportunities to help others.
The politicians’ video responses have been posted on the group’s Web site. While short on detail, the videos offer some insight to the three’s priorities.
Sen. Hilary Clinton, a Democrat from New York, cites her experience working with the Children’s Defense Fund and supporting children’s health care.
Sen. John McCain, Republican from Arizona, says his generation was lucky to have parents who were able to fulfill the five promises with their children, but today’s young people face more obstacles.
Sen, Barack Obama, Democrat from Illinois, discusses his dedication to his daughters and how the last promise — giving children the opportunity to aid others — is perhaps the most important.
To learn more about how the senators stand on other nonprofit issues, read The Chronicle’s campaign coverage.
— Ian Wilhelm