This document provides information to help non-profit organizations avoid common mistakes and prevent loss of their 501(c)(3) tax-exempt status. It outlines key areas like compliance with state and federal requirements, accountability through financial and governance policies, transparency to the public, and avoiding "danger zones" such as improper lobbying, charity gaming violations, and abuse of non-profit status through actions like excessive executive compensation. Maintaining compliance, accountability, and transparency while steering clear of legal and ethical issues can help safeguard a non-profit's important 501(c)(3) designation.

1. SafeguardingYour Organization’sNonprofit statusAvoid common mistakesPrevent loss of §501(c)(3) statusSponsored by :Indiana Nonprofit Resource NetworkLaGrange Community FoundationPresenter:Miriam Robeson,Attorney

2. Why Are We Here?Information Level – Beginning to Intermediate

3. Why Are We Here – Part 2The Horror Stories and Bad Press“Three Cups of Tea” scandal and lawsuit – fraudulent solicitation of donations based upon inaccurate book

4. Investigation of Fiesta, Sugar, and Orange Bowl games for abuse of nonprofit status and “extravagant compensation”

5. Investigation of Humane Society of the United States for excessive executive compensation

6. Medical Association of Atlanta ED pleads guilty to embezzling more than $300,000

7. Nonprofit Status of 30 credit counseling organizations revoked for failure to achieve a nonprofit purpose and for excessive executive compensationWhy We are Here – Part 3The IRSIRS increases nonprofit oversight

8. Employment Taxes

9. Executive Compensation

10. Activist Agenda

11. Compliance (Tax forms)

12. Since 2008, the IRS has added more than 100 employees to the Exempt Organizations Section

13. As of June, 2011, the IRS has “automatically revoked the nonprofit status of more than 275,000 nonprofitsKeys to Safeguarding Nonprofit StatusCompliance

14. Accountability

15. Transparency

16. Danger ZonesComplianceGovernment and other technical requirementsCompliance – State Requirements

17. Compliance – Secretary of StateCheck out IN SOS Office to verify “in good standing”

18. https://secure.in.gov/sos/online_corps/name_search.aspx

19. OR – in.gov/sos and select “business search” from the navigation menuCompliance – State Requirements

20. Compliance - Federal

21. Compliance - Employment

22. Compliance - UBIT

23. Compliance – Is your nonprofit “on the list?”IRS Publication 78 – Cumulative List of Nonprofit Organizations approved by the IRS

24. http://www.irs.gov/charities/article/0,,id=96136,00.html

25. Go to IRS website and search “Publication 78”

26. Incorporation as a State (Indiana) nonprofit does not equal IRS nonprofit - 501(c)(3) - StatusAccountability

27. Accountability - FinancialFinancial Policies

28. Financial Controls

29. Monitor appropriate use of nonprofit funds

30. Audit - reviewAccountability - Financial Governance PoliciesPolicies for –

31. Handling Money

32. Recording Money

33. Reporting MoneyAccountability - GovernanceConflict of Interest

34. Ethical StandardsAccountability - Conflicts of InterestWatchAppearance of Impropriety!

35. Accountability - Personal Benefit

36. Accountability – EthicsExecutive CompensationExempt Organizations with budgets of $100,000 or more are expected to have paid staff

37. EO’s can pay market rates to staff

38. EO’s can look to “for-profit” compensation when determining “market rates”