501c3 Compliance
From Makers Local 256
Contents
Taxes
501c3 Organizations must file the 990-N postcard in order to retain their 501c3 Status.
Generating Income
- Being paid to advertise
- http://www.rurdev.usda.gov/rbs/ezec/toolbox/501c3factsheet.html
- Many organizations keep their members informed with a regular newsletter or via the website, and help defray the costs by accepting paid advertising. Unfortunately, the IRS considers this advertising income to be unrelated to exempt purposes, and therefore taxable. Up to $1,000 in unrelated income can be earned without having to pay tax, but an organization that receives at least $1,000 in advertising or other unrelated receipts must file Form 990-T, and pay any tax due.
- Selling Organization's Property
Earmarking Funds
- See this article for details: http://en.allexperts.com/q/Nonprofit-Law-2266/2010/4/earmarked-funds-individual-project.htm
- Funds may be earmarked by the donor and the association can make every attempt to honor the earmarking, however the use of all funds remains with the association.
- Association should never earmark funds as being for a person, only for a cause \ project.
- https://www.501c3.org/misappropriating-nonprofit-funds/
- If we tell the public we're raising money for a specific cause and they donate towards it, the money is permanently earmarked for that cause.
- A 501c3 can put a donation clause in any fund raiser saying they retain the right to reallocate funds.
- If an individual donates, and declares it is for a specific cause, the money is not permanently earmarked, it's up to the charity what happens to the money.
- If we tell the public we're raising money for a specific cause and they donate towards it, the money is permanently earmarked for that cause.
Supporting Economic Development
- http://www.nonprofitlawblog.com/economic-development-as-a-501c3-activity/
- https://www.irs.gov/pub/irs-wd/0614030.pdf
Notes for Donors
These are notes that Donors may be interested in, but do not effect the organization. It's the tax payer's responsibility to accurately assign a dollar value for any item they are claiming as a charitable contribution on their taxes
- Must have a receipt for any item, for any value
- IRS may reject an item valued +$500 if it doesn't have a qualified appraisal document with it. LINK
