Recent News & Blog / Nonprofit
Nonprofits: When are sponsorship and advertising payments subject to tax?
Sponsorship and advertising can provide a real boost to your not-for-profit’s income. However, if sponsors or advertisers receive a “substantial benefit” or if providing benefits isn’t a related business activity, you may owe unrelated business income tax (UBIT). If you’re seeking sponsors or advertisers for your nonprofit and aren’t sure what’s taxable, contact the CPA's and business tax advisors at SEK for tax tips and tax questions.
Nonprofits: Using the personal touch for last-minute fundraising
As 2023 hurtles toward Dec. 31, your not-for-profit probably is fully engrossed in last-minute fundraising. One of the most effective year-end strategies is to have board members reach out to family, friends and professional contacts. Board members should “humanize” their request with personal stories illustrating why they support your nonprofit’s mission. Contact the CPA's and business tax advisors at SEK with questions about fundraising and other tax tips.
Nonprofits: Consider these 2 issues before searching for new staffers
Despite many predictions to the contrary, U.S. employers have continued to add workers to their payrolls and the unemployment rate has remained low. Is your nonprofit among the employers that need new staffers? To make the right decision, conduct a human resources assessment. Our CPA's and business tax advisors can help your nonprofit by reviewing your finances and suggesting ways to free up cash. Contact us today for all more tax tips and financial advice.
Why your nonprofit shouldn’t operate like a for-profit business
Even nonprofits that generally play it safe can get tripped up by the commerciality doctrine. It was created to address concerns about nonprofits competing at an unfair tax advantage with for-profits. The doctrine generally says that when some otherwise exempt activities are substantially the same as those of commercial entities, a nonprofit can risk its exempt status. Risky activities include set ting prices to maximize profits, accumulating unreasonable reserves and advertising services to the public. With these exemptions and other technicalities, it can be tricky to remain compliant. Contact the CPA's and business tax advisors at SEK to help navigate you through nonprofit tax, tax tips and other financial advice.
When do 501(c)(6) organizations risk their exempt status?
Not-for-profit trade associations are organized to promote the common interests of their members. But to maintain their 501(c)(6) tax-exempt status, they must observe certain rules. Your association needs to offer services that benefit your entire group or profession as a whole, not individual members. Even when services for individuals are allowed (because they’re limited in number and scope), they can trigger unrelated business income tax. On the other hand, activities such as attempting to influence legislation relating to common business interests of members and testing and certifying products are generally acceptable. The CPAs and business tax advisors at SEK can help you navigate this process.
Nonprofits: Best practices for effective board meeting minutes
If you think the recorded minutes of your nonprofit’s board meetings are just a formality, think again. Meeting minutes can become critical documents if, for example, your organization is audited by the IRS or your directors are sued due to a board decision.
How to get the financing your nonprofit needs
Relatively high interest rates and tight lending standards are making it difficult for even for-profit businesses to apply and qualify for bank loans.
Help donors help your nonprofit with a planned gift
Most established not-for-profits are already equipped to solicit and accept planned gifts. But if your nonprofit is new to planned giving and doesn’t yet understand the long-term advantages of deferred gifts, it’s a good time to get up to speed.
Why your nonprofit’s board needs to be diverse
Ideally, a not-for-profit’s board of directors should mirror that of its community and clientele. Does yours? Identifying that your board needs more diversity is the easy part, though. Figuring out what to do about it can be more difficult.
Nonprofits: Want to boost income? Consider a for-profit subsidiary
Just because you run a not-for-profit organization doesn’t mean you can function on low or no income. Although your nonprofit’s tax-exempt status prohibits certain money-making activities, you may be able to create a for-profit subsidiary that isn’t hampered by such restrictions.