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In response to the widespread media reports of nonprofit
leaders’ self-dealing, excessive compensation,
and failed governance, the IRS and state attorneys general
across the country are revamping their enforcement departments,
adding agents, and using technology to identify and
expose nonprofit abuses. The message is clear: tax exempt
laws will be enforced. In
fact, the IRS has outlined its new initiatives in
a forty page memo entitled FY 2004 Exempt Organizations
Implementing Guidelines. (http://www.irs.gov/pub/irs-tege/eowrkpln_04.pdf)
Several states, including New York, Massachusetts,
and California, are also considering legislation that
would place greater accountability on nonprofit board
members and audit committees. The Massachusetts attorney
general expects to publish annual state information
filings on the internet by 2005. This would make this
information easily accessible to the press and members
of your organization.
David can help your nonprofit
implement sound governance practices that will not
only avoid problems with your attorney general and
the IRS, but also provide great confidence to your
organization’s members and donors. Ultimately,
sound corporate practices and good governance will
attract stronger board members and donors, creating
a healthier organization.
Areas clients benefit
from legal counsel:
- Duties and responsibilities of
board of directors
- Board of director manuals
- Corporate charter and bylaws
review to ensure these documents represent actual
organizational structure and purposes
- Annual meeting issues, including
director elections
- Use of board committees and committee
structures, including audit committee
- Communication to members and
constituencies
- Incorporation filing
- Annual tax filings
- 501(c)(3) exempt status recognition
filing
- Association agreements
- Unrelated business income tax
issues
| Client
Success Story Working
with a team of leaders of a medium sized nonprofit
($8 million in annual revenues), David was able
to help implement significant organizational
change to strengthen the organization through
a difficult time of declining membership and
contributions, staff lay-offs, and restructuring.
David was intimately involved
with a complete overhaul of the organization’s
bylaws and governance, its director election
process, increased communication with the organization’s
membership to keep them abreast of ongoing changes,
and implementation of board committees to address
various organizational needs. Through the process
he advised the nonprofit’s leaders, including
its executive leadership, board, board committees,
and HR department.
The result of these
and other efforts by the nonprofit’s leadership
was a stabilization of regular membership, a
leveling of regular contributions, a special
campaign that collected over a million dollars
in 2003 and a successful 2004 campaign which
is on track to raise an additional million dollars.
Recently, the organization’s
auditors offered the highest commendation as
to how the nonprofit leadership had navigated
the organization through a difficult year. The
organization continues to build on a fresh vision
for its future.
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