We would say that virtually any museum would pass muster as an educational 501c3, even if it's collection oriented. They're still educating the public on the unique contribution that collection has made. Education, which includes promotion of the arts, is VERY broadly defined.

No, that wouldn't work. Fiscal sponsors are charitable entities, so their sponsorships must support charitable causes. A 501c7 would not qualify. Also, 501c7 orgs would need to be careful about that even if it could work, as they (501c7s) are very limited in the amount of nonmember income they can generate.

Would working concession stands to raise money be considered nonmember contributions

Most people don't. Glad you watched!

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Not an unusual situation, actually. In many instances, an ED may also be an officer/director, so their leadership of board meetings would be more expected. In cases where an ED is a strictly hired position with no board seat, the board must be careful not to abdicate their responsibilities to this person. The board members are fiduciaries, not the ED. It's common in these situations for the ED to play a major role in reporting to board the current state of affairs, as it's likely the ED is the head of day-to-day management. But the board would be wise to wrest control back.

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In transactional situations like this, the answer is most likely "yes". Rent payments are often reported on Form 1099-MISC.

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We don't know the reasoning behind why the other organization is requesting a W9 from you. It is unusual. But, there's no harm in filling one out. Box 3a can be confusing, so mark "Other" and write nonprofit corporation in that line. Your box 4 exemption code should be "1". Then, just fill in your EIN number in Part I, then sign and date.

@@FoundationGroup thank you so much for your help, you’re awesome 😎

Depends. In the past, private foundations in particular were hesitant to grant money to charities that took the shortcut on 1023EZ. Their reasoning was that these organizations received 501c3 status without any real IRS scrutiny, which is more true than not. Now that the 1023EZ has been around for a full 10 years, we're not hearing much of that rhetoric anymore. As long as you qualify to file it, you shouldn't fear doing so. If you intend to rely heavily on foundation grants, you might still consider using the full process anyway.

This is where things go sideways quickly. "Stipend" is a word people use when they don't want to say the word "payroll". They do this thinking that somehow that word magically strips the transaction of any necessary treatment according to payroll tax rules. Please exercise caution here. Unless these referees and coaches are billing you for their services at a fee they determine, then they're your employees. Regardless of amount, you should be paying them via W2, not 1099.

This is more of a rabbit hole question than you might imagine. Legally, if a nonprofit becomes a for-profit, all of its assets should be distributed for charitable purposes because of the permanent dedication of assets principle. In practice, you virtually never see this. Thousands of charities lose their 501c3 status every year, usually for repeated failure to file Form 990. Those nonprofits become for-profits as of the effective date of their 501c3 revocation and none of them are called on, at least not by the IRS. At the state level, it's far more complicated. The organization is still a nonprofit corporation...and their articles of incorporation still contain the requirement for distribution at dissolution. If the organization never dissolves, then it's not an issue. But if it does dissolve without restoring 501c3 status, state law still dictates that the assets must be distributed and not taken over by the leaders of this entity.

This is the part where we said there is a LOT of misinformation. The "tax expert" you reference is no tax expert at all if that's what they're suggesting. There is no such thing as a 508 organization. Section 508(a) of the Internal Revenue Code describes how nonprofits qualify and become approved as 501(c)(3) or other 501(c) organizations. 508 is not a different type of status. Anyone that tries to sell you on the idea that there is a difference is either misinformed or intentionally lying to you. Please watch our other video about the church 501(c)(3) / 508 debate here for more details: kzfaq.info/get/bejne/l8iYetOJsJyVfH0.html

Hi! Maybe this video can help: kzfaq.info/get/bejne/l7OnjMSandmUfmw.html

We provide tax, accounting, and compliance services, plus consulting and education with those clients who utilize our other services.

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Just don't hit the thumbs up two times lol

@@alyssaharris5943 I only have 2 thumbs 👍👍

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If you have a private foundation, you can satisfy the 5% distribution requirement by giving to other charities or even individuals in need (benevolence). However, don't start handing out scholarships just yet. The IRS requires private foundations that are planning to give scholarships to get pre-approval of the plan from the IRS before you start.

Private foundations are required to give/spend at least 5% of net assets every year for charitable purposes.

Generally speaking, yes.

I wouldn't recommend it. It's not illegal, but 501c7 nonprofits have strict limits as to the amount of non-member revenue they can generate...no more than 35%. Anything that encourages non-member income generation can be somewhat risky, unless there's no way it will get close to the limit. Another thing to consider is that a 501c7 is supposed to be for the exclusive benefit of the members, so external scholarships do not advance that. Scholarships for members' kids is probably disallowed, also, as private benefit. Remember too that (in general) donations to a 501c7 are not tax deductible in the same way they are to a 501c3.

Can you clarify your question, Tonya? Not sure what you're asking.

What if it the organization unincorporated affiliate of an incorporated 501 c 7 that has a group ruling in one state but subordinate unincorporated affiliate is geographically located in another state.

Yes, it does.

We haven't done a group exemption video yet, but we'll try to get to that later this year. Thanks for the idea :) !

Sounds great. We'll add that to the list.

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This lack of understanding is exactly why it's so pervasive. People don't conceive that what they're doing is illegal, or if it is, it's not that bad. Major embezzlement is (fortunately) rather rare. But small-time theft and misappropriation of resources collectively add up to way more than anything stolen on a large scale. Again, keep in mind that this doesn't apply to most small businesses in the same way. The owner of that business can do pretty much whatever they want with business assets and money, so long as they account for it properly on their taxes. But an employee or board member of a nonprofit has no ownership stake in the organization's assets at all. Any personal use of corporate assets or money for non-business purposes is strictly forbidden. We're not talking about a working lunch. We're talking about buying food or anything else with nonprofit funds that don't have a business purpose. You cannot do that, ever. It is theft. As for the company vehicle, it can be used for business purposes. But any personal use, including commuting, requires the employee or board member to claim as income any personal use at the current IRS mileage rate. This part even applies to commercial businesses.

There's virtually nothing a church (or any other 501(c)(3)) cannot speak about in the US. The First Amendment still applies. There are restrictions, however, on political activity. For one, involvement in campaigns for public office, whether for or against a candidate, is strictly prohibited under what's known as the Johnson Amendment. We would submit that the Johnson Amendment is too strict, but it's there. 501(c)(3)s can, however, lobby for or against legislation and public policy, especially when that policy affects the mission of the organization, though it doesn't have to be limited to that. Lobbying activity can consume up to about 10% of a 501(c)(3)'s time and resources. Speaking on issues from the pulpit doesn't carry any restrictions that wouldn't apply to anyone else under the same circumstances, unless it's about a candidate for office. Hope that helps.

@@FoundationGroup thank you for responding. And thank you for your insight.

From what you describe, we would probably say, "No", to that. It's a fee-for-service arrangement with no real distinction from a commercial business. You may be facilitating education, as you suggest, but that's indirect at best. Fee for service nonprofits must have mission accomplishment be the direct result of the service being sold to not be considered a commercial-equivalent activity.