Redd   e portfolio assignment #1 nmp665 core course
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  • 1. Leslie M. Redd E-Portfolio Assignment #1 Core Course
  • 2. Law, Policy & Government in Nonprofits  Nonprofits are vital to civil society.  Nonprofits are distinct from government and business.  Nonprofits and government sometime pursue different goals. Ultimately there will always be some level of interaction between nonprofits and government.
  • 3. Key Learning Objectives          The legal requirements of nonprofit organizations; The benefits of tax-exempt status; The process of developing and implementing public policy; The role of nonprofits as aggregators and advocates of the public interest visa vie the government; The role of nonprofits as providers of socially beneficial goods and services visa vie the government; The challenges faced by nonprofits when they simultaneously perform public service advocacy and provide public services using government funds; The ethical issues that can arise when 501c3 and 501c4 nonprofits deal with government entities; The questionable role of 501c4 organizations in political campaigns; and Designing effective lobbying campaigns.
  • 4. Federal, State and Local governments have regulatory requirements for nonprofit organizations. It is important that you have a good understanding of this regulatory landscape.
  • 5. The legal requirements of nonprofit organizations  Organizations get their nonprofit incorporation status from their individual states based upon their promise to serve the “public good” and to not use the operation of the nonprofit for private gain—private inurnment and/or excessive benefit.  They incorporate at the State and get state tax exemption from the individual states. Organizations get their tax-exempt status by being granted 501C3 status by the IRS at the federal level. Monitoring is done at the Federal level with the FORM 990 and various electronic database for intense scrutiny.
  • 6. Benefit of Tax Exempt Status  To retain tax-exempt status, 501c3 organizations must do three things: Refrain from engaging in any “electioneering”—any activities for or against an candidate for elected office; 2. Adhere to Lobbying rules established by government; and 3. Adhere to all federal and state reporting requirements. We focused on the federal requirement to submit the Form990. 1.
  • 7. Pubic Policy  We looked at meeting social needs  Compared the independent sector and government resources  Analyzed relationships between government and nonprofits – is it complementary, supplementary or adversarial?  Understanding public policy and its limitations and determining a framework for analysis  The various roles non-profits play as independent organizations and in relationship to the government.
  • 8. Findings from the 2010 National Survey of Nonprofit Government Contracting and Grants Elizabeth T. Boris Nonprofit as Advocates of The Public Interest and the impact of direct government funding  Sixty-eight percent reported that government not paying the full     cost of contracted services was a problem (both a big and small problem). Seventy-six percent indicated that the complexity and time required for reporting on contracts and grants was a problem. Seventy-five percent indicated that the application process was too complex and time consuming. Fifty-eight percent said that government changes to contracts and grants were a problem. Fifty-three percent said that late payments were a problem.
  • 9. Non-Profit Lobbying IRS Definition  In general, no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying). A 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status.  Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive office), or by the public in referendum, ballot initiative, constitutional amendment, or similar procedure. It does not include actions by executive, judicial, or administrative bodies.  An organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation.  Organizations may, however, involve themselves in issues of public policy without the activity being considered as lobbying. For example, organizations may conduct educational meetings, prepare and distribute educational materials, or otherwise consider public policy issues in an educational manner without jeopardizing their taxexempt status.
  • 10. 501(c) (4)  Internal Revenue Code section 501(c)(4) provides for the exemption of two very different types of organizations with their own distinct qualification requirements. They are:  Social welfare organizations: Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, and  Local associations of employees, the membership of which is limited to the employees of designated person(s) in a particular municipality, and the net earnings of which are devoted exclusively for the promotion of social welfare.
  • 11. Summary  Increased involvement with government in the areas of advocacy and service provision—historically two major areas of nonprofit activity—can/will effect the operations of a nonprofit and its ability to fulfill its mission.  The CEO/CDO need to have a good understanding of the nonprofit laws and regulations, and have to determine their optimal level of involvement with government.