To view the accompanying webinar, visit: https://www.financialpoise.com/financialpoisewebinars/view-webinar/?id=253875254&slides=9tLnzIBjoDZE6c Not every organization exists to benefit its owners. Learn the basics of mission-driven organizations – not-for-profits – so you can start one or serve one as an advisor, volunteer, director or employee. In this webinar we cover the key differences between for-profit and not-for-profit organizations, including their capitalization, taxation and governance, and provide tips for assuring continued tax-exemption and continued operations.

1. Representing a Not-For-Profit
SERIES: ONE HOUR LAW SCHOOL 2.0
TELL MEWHAT I NEEDTO KNOW
Premiere Date: 12/14/2017
This webinar is sponsored by: EisnerAmper
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MODERATOR
Robert Sieland Adtalem Global Education, Chicago
PANELISTS
Kate Harmon Elliott Greenleaf,Wilmington DE
Michelle Huhnke Sugar Felsenthal Grais & Hammer, Chicago
Amy Schiffman GivingTreeAssociates, Chicago
MEET THE FACULTY

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ABOUT THIS WEBINAR
Not every organization exists to benefit its owners. Learn the basics of mission-driven
organizations – not-for-profits – so you can start one or serve one as an advisor,
volunteer, director or employee. In this webinar we cover the key differences between
for-profit and not-for-profit organizations, including their capitalization, taxation and
governance, and provide tips for assuring continued tax-exemption and continued
operations.

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ABOUT THIS SERIES
Looking for a practical introduction to some of the issues facing business people and businesses of all
sizes?
In this program, you’ll learn (1) the obligations and key considerations with regard to data privacy and
security, both as a consumer and a vendor; (2) considerations for safe use of copyrighted material in
advertising, earned media, and professional communications; (3) basics for establishing, maintaining, and
minimizing liability with respect to employee benefits plans; and (4) establishing and maintaining non-
profit organizations.
Each episode is delivered in Plain English understandable to business owners and executives without
much background in these areas. Yet, each episode is proven to be valuable to seasoned professionals. As
with all Financial PoiseWebinars, each episode in the series brings you into engaging, sometimes
humorous, conversations designed to entertain as it teaches.
And, as with all Financial PoiseWebinars, each episode in the series is designed to be viewed
independently of the other episodes, so that participants will enhance their knowledge of this area
whether they attend one, some, or all of the episodes.

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EPISODES IN THIS SERIES
EPISODE #1 Data Privacy & Security -101 9/25/2017
EPISODE #2 Using Copyrighted MaterialWithout 10/26/2017
Violating Copyright Law: The Fair Use Doctrine
EPISODE #3 Employee Benefit Law for the Non-Expert 11/16/2017
EPISODE #4 Representing a Not-For-Profit 12/14/2017
Dates shown are premiere dates;all webinars will be available on
demand after premiere date

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11. Background: Types of Tax-Exempt Organizations
29 types of organizations exempt from tax under Section 501(c)
• 501(c)(3) charities: only one that provides a tax deduction to a
donor
• 501(c)(4): social welfare orgs
• 501(c)(6): business leagues and trade orgs
• 501(c)(7): social/recreation clubs
• 501(c)(8): fraternal benefit societies
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12. Background:
Types of 501(c)(3) Organizations
• 3 general categories
ü Public Charities
ü Private Foundations
ü Hybrids
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13. Public Charities
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• Public institutions
• Publicly supported
üHigher deductibility limits
üLess regulated

14. Private Foundations
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• Funded and governed by single donor
or family
• Lower deductibility limits
• Heavily regulated

15. Private Foundations (Cont’d)
• 2% excise tax on net investment income
• Distribution of 5% of net asset value required
• No self-dealing: transactions with donors strictly limited
• Limit on business holdings
• “Jeopardizing investments” prohibited
• Types of grants or distributions limited
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16. Percentage Limitations And Reduction Rules
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Cash Long-term
capital gain
property
Tangible
personal
property (if
long-term)
STCG or
ordinary
income
property
Public charity FMV FMV, unless
election is
made to
deduct basis
up to 50% of
AGI
FMV if
charity
employs in
related use
Basis
Private
foundation
FMV Basis unless
qualified
appreciated
stock, then
FMV
Basis Basis
50% 30% 20%

17. Formation of a Non-Profit
• Creature of state law
• Generally formed as a corporation
• Advantages to forming non-profits
• Formation of a non-profit does not automatically confer or guarantee exempt status
• Generally required forms include
ü Articles of incorporation
ü Bylaws
• Best practices also include
ü Conflict of interest policy
ü Detailed narrative
ü Budget
ü Specialized schedules
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18. Membership Issues
• Often makes governance unworkable – difficulty of seating a
quorum
• But, can offer a powerful check on the Board
• Very common in social clubs and business leagues
• Can be non-voting – more honorary
• Can be used for control in complex structure – members of EO 2
are designated by the Board of EO 1
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19. Registration Requirements
• Change from state to state
• E.g.,Arizona has no requirement
• E.g., Illinois requires initial registration
ü Plus fundraiser registration
ü Plus campaign registration
• Unified Registration Statement
ü Not universally accepted
• State by state addenda/schedules
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20. When Are You Fundraising?
• Donations from initial board could be ignored
ü Friends and family?
ü Opening balance on registration sometimes queried
• Extremely broad definition: direct or indirect request for a contribution for
charitable purposes
ü Mail, radio, print ads, ticket sales, telephone, in-person, etc.
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21. Online Fundraising
• Charleston Principles govern charitable solicitations on the
internet; non-binding.
ü See
http://www.afpnet.org/ResourceCenter/ArticleDetail.cfm?ItemNumb
er=3309
ü Generally, if a charity has a passive “donate here” button, that alone
doesn’t require registration in donor’s state
ü If charity responds and follows up, asks for more, the charity has now
solicited
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22. Form 990: Transparent Report Regarding
Governance and Tax Compliance
Form 990:
• Extensive reporting on governance issues; how does the charity
operate?
• Extensive reporting of salaries of all “ODTKEs”
• Reporting of financials: overhead and fundraising costs compared
to amounts spent on charitable mission
• Publicly available to donors, the public and the media
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23. Audited Financial Statements
Sometimes required by state law:
• Often required for large organizations, e.g., organizations with
annual income greater than $500,000
• Sometimes required as part of charitable registration process at
the state level
Otherwise, it depends
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24. Duties of Boards of Directors
• Board bears the responsibility for the financial health and
programmatic effectiveness of the non-profit corporation
• It should be representative of the various constituencies and
stakeholders with various needed talents (marketing, financial
management, legal, etc.)
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25. Board of Directors
• Fiduciary Duties
ü Care
o Directors must take care in their work
• Loyalty
ü To the organization, staff, board
ü Working for the organization’s mission and benefit
• Obedience
ü Ensuring that the organization obeys the laws, including tax laws,
regulations, employment laws, etc.
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26. Board of Directors (Cont’d)
• Independence is Key
ü Depends on relationship between director and organization
ü Organization should have its own definition of independence based upon
organization’s unique qualities
ü An independent director may have a conflict around a particular
transaction but still retain her independent status
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27. Director Independence; Inurement Concerns
• Independence is Key
ü Depends on relationship between director and organization
ü Organization should have its own definition of independence based upon
organization’s unique qualities
ü An independent director may have a conflict around a particular
transaction but still retain her independent status
• Prohibition on Inurement
ü Prohibition of inurement of earnings of non-profits
ü Any unjust enrichment, whether out of gross or net earnings, can
constitute inurement
ü Can refer to anyone having a personal and private interest in the activities
of the organization but is generally focused on insiders
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28. Director Liabilities
• Personal liability of individual directors
ü Generally protected by limited liability once the non-profit incorporates
in accordance with state law
ü Some exceptions do apply
ü Insurance may be available for limited exceptions
ü Unpaid taxes are a big issue for directors and insurance may not cover
them
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29. Role Of The Non-Profit Board
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01
03
02
04
RELATIONSHIP
BUILDING
FUNDRAISING
FISCAL OVERSIGHT
VISION
MISSION
PLANNING
E.D. SUPPORT &
EVALUATION

30. Sample Board/Committee Organizational Chart
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Board of
Directors
Executive
Committee
Governance Finance Fundraising
Marketing/
Outreach/
Recruitment

31. The Board’s Role in Fundraising
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1 3
Partner with staff Help identify, qualify,
cultivate prospects
Make own commitment
4
Open doors, introduce, warm hand-off
5
Ask for
gifts
6 7
Assist with renewal process
2
Develop and approve
strategic goals and financial
targets

32. The Board’s Role in Fundraising (Cont’d)
• In successful non-profit campaigns:
ü 30-60% comes from board members and their connections or outreach.
ü 100% participation = powerful signal to donors that the org. has vitality
and the confidence and enthusiasm of its board
• The dedication of board members and other key volunteers is often a primary
indicator of success.
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33. Leadership & Training
• Job Descriptions
• Board SelfAssessment
• Board Composition
• Who “Staffs” the Committees?
• TrainingTopics/Opportunities
• Recruitment & Succession Planning
• Committee on trusteeship/board development
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34. Optimal Director Profile
• Board Recruitment Goal
ü Strategically Composed
ü Highly Engaged
ü High Performing
• Attributes and Competencies
ü AND not OR
ü Must Have – 100%
ü Very Important – 40% to 75%
ü Helpful – One or two individuals
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35. Board Recruitment - Where Are You?
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CHECKLIST
Take it a level up
Right people doing the right things
Training and support
Right people doing the wrong things
Reboot, refresh, recruit
Wrong people
Starts with board and top staff
Culture of philanthropy?

36. ABOUT THE FACULTY
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ROBERT SIELAND
robert.sieland@adtalem.com
Robert Sieland is Associate General Counsel, Corporate & Securities, at Adtalem Global Education
(NYSE:ATGE), a global provider of educational services. Rob serves as lead counsel for all of corporate and
securities matters, including corporate governance, securities reporting and mergers and acquisitions. Prior to
joining Adtalem, Rob was an associate at Schiff Hardin LLP and McDermott Will & Emery LLP where he
represented public and private companies, including private equity firms and their portfolio companies, in
connection with mergers and acquisitions transactions, securities offerings, bank financings and corporate
governance matters.

37. ABOUT THE FACULTY
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KATE HARMON
khh@elliottgreenleaf.com
Kate Harmon is a Senior Associate at Elliott Greenleaf, P.C. in Wilmington, DE. Kate has extensive
experience litigating in Delaware’s various state and federal Courts from case inception through trial
and concentrates her practice in the areas of complex commercial litigation, bankruptcy litigation,
entity formation, non-profit representation, insurance coverage disputes, compliance and intellectual
property. She is familiar with the formation of various types of entities and local licensing
requirements.
Kate has a broad range of litigation experience, including: products liability, construction defect, post-
confirmation of bankruptcy trusts, insurance coverage disputes, contract disputes and execution of and
collection on judgments. She has presented on numerous topics including all phases of litigation and
various theories of liability. Kate serves on the Executive Committee of the Delaware State Bar
Association and the Richard S. Rodney Inn of Court and is a participant in the 2016 Class of the Next
Generation of the National Conference of Bankruptcy Judges.

38. ABOUT THE FACULTY
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MICHELLE HUHNKE
mhuhnke@sfgh.com
Michelle M. Huhnke is a partner with the Chicago law firm of Sugar Felsenthal Grais & Hammer
LLP. She focuses her practice on estate planning, charitable planning, and wealth preservation. She
works with clients and their families to develop estate plans that address varied family circumstances in
a caring, detailed way and include efficient estate, gift and generation-skipping tax planning.
Michelle also represents charities and their donors. She advises clients on structuring charitable gifts in
order to foster family philanthropy and maximize income, estate, and gift tax benefits. She also
counsels charitable foundations and public charities on governance and business transactions.
Michelle writes and lectures frequently on tax-exempt organizations and estate planning issues. She
has also taught Trusts and Estates at the University of Chicago Law School, and is a former Chair of the
Estate Planning Committee of the Taxation Section of the D.C. Bar.

39. ABOUT THE FACULTY
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AMY SCHIFFMAN
amy@givingtreeassociates.com
Since founding Giving Tree Associates, Amy has helped her clients raise tens of millions of dollars via public
and private funding sources. As a principal, Amy manages annual, capital and endowment campaigns,
facilitates board leadership development and solicitation training workshops, builds strategic plans, develops
communication strategies, and recruits professional leadership.
Amy has worked in nonprofit management for over 20 years. Prior to co-founding Giving Tree Associates,
Amy served as Director of Development at Ida Crown Jewish Academy, Director of Development and
Communications at Jewish Council for Youth Services, held several positions with United Jewish
Communities, and her career began at Jewish Federation of Metropolitan Chicago as Director of Campus
Campaigns for The Hillels of Illinois.
Amy received her Bachelor’s in Psychology from the University of Illinois Urbana-Champaign and Master’s in
Social Work with a Certificate in Jewish Communal Service from the University of Pennsylvania School of
Social Work and Gratz College.

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