Regulation of Nonprofit Organizations

THE ATTORNEY GENERAL IS RESPONSIBLE FOR THE REGULATION OF NONPROFIT ORGANIZATIONS The California Attorney General is responsible for the regulation of nonprofit organizations for public policy reasons.  The Attorney General represents all the public beneficiaries of charity, who cannot sue in their own right.  Therefore, all charities must register with the Attorney General and the Attorney General’s Registry of Charitable Trusts maintains public files and financial reports for all charities registered in California.  The Attorney General has the power to oversee the operations of Public Benefit Corporations. The Attorney General’s Charitable Trust Section has investigative audit powers and may bring [...]

Regulation of Nonprofit Organizations2020-03-22T12:59:08-07:00

Nonprofit Public Benefit Corporation

WHAT ARE MEMBERS OF THE NONPROFIT PUBLIC BENEFIT CORPORATION? Membership for a Nonprofit Public Benefit Corporation is optional.  The reasons for providing membership in a nonprofit include: (1) Attract funds through membership, or (2) Establish support in the community.  However, many administrative burdens are associated with forming a membership organization and it is more common for a nonprofit to not have members.   If the nonprofit includes membership, the Bylaws must address the controlling provisions for membership such as qualifications, method of selection, expulsion, dues and fees, notice and frequency of meetings, the number required for a quorum to make decisions, [...]

Nonprofit Public Benefit Corporation2020-03-20T22:42:39-07:00

How Does A Nonprofit Organization Maintain Tax Exempt Status?

TAX EXEMPT STATUS Annual financial reports must be submitted to the IRS and the California Franchise Tax Board to maintain a nonprofit organization's tax exempt status.  The board of directors should review the corporation’s annual IRS and State filings before submitted.  Often, the nonprofit will retain an independent accountant to conduct a review of the organization’s financial statements and issue a report to the board of directors, which is a less expensive alternative to obtaining a complete audit.  The nonprofit should hire a professional accountant to help implement a fiscal management system, addressing issues such as dual-signature requirement on bank [...]

How Does A Nonprofit Organization Maintain Tax Exempt Status?2020-03-13T22:31:50-07:00

Can A Nonprofit Organization Be Taxed?

CAN A NONPROFIT ORGANIZATION BE TAXED ON UNRELATED BUSINESS INCOME? Nonprofit organization often retain an Attorney to provide an opinion on whether the corporation will be engaging in unrelated business activities that may be taxable.   To note, the activities of a nonprofit organization can still be considered charitable even though they generate profits. However, the primary purpose must be charitable and not income generation.  A for-profit business generates income on a regular basis; whereas, a non-profit organization engages in fundraising not on a regular basis. Factors that are considered in determining if the organization is charitable include:  How the income [...]

Can A Nonprofit Organization Be Taxed?2020-03-13T22:11:14-07:00

How Does A Nonprofit Obtain Tax Exemption Status?

TAX EXEMPTION STATUS The major benefit of charitable nonprofit organizations is that they may qualify for exemption from Federal and State income tax.  In addition, corporate donors may deduct contributions to organizations that are exempt under section 501(c)(3) of the Internal Revenue Code from their personal Federal income tax.  A tax professional must be retained by the nonprofit because of the complexities involved. The process for obtaining tax-exempt status is separate from the incorporation process.    FEDERAL INCOME TAX EXEMPTION Section 501(c)(3) of the Internal Revenue Code, which is codified in Title 26 of the United States Code, states that the [...]

How Does A Nonprofit Obtain Tax Exemption Status?2020-03-13T21:55:47-07:00

Nonprofit Public Benefit Corporation

https://youtu.be/zg7u3Q_sj4U WHAT IS A NONPROFIT PUBLIC BENEFIT CORPORATION? A Nonprofit Public Benefit Corporation must be formed for public or charitable purposes and cannot be formed for private gain of any individual.  Public benefit purposes include organizations such as childcare centers, shelters for homeless people, community health care clinics, museums, hospitals, schools, performing arts groups, conservation groups, and affordable housing groups.   The Public Benefit Corporation is legally restricted in that all its assets must be irrevocably dedicated to charitable, scientific, or educational purposes.  In this sense, the nonprofit corporation is owned by the public. No private individual can claim ownership [...]

Nonprofit Public Benefit Corporation2020-03-09T12:49:40-07:00