Blockchain Applications in the Nonprofit Sector: Part III – Decentralized Autonomous Organizations
CharityLawyer Blog
by Ellis Carter
2d ago
This is Part III of a four-part series about blockchain technology in the nonprofit sector. In this Part, we cover decentralized autonomous organizations and how they might operate as nonprofits. Part I of this series introduced blockchain technology generally. Part II examined smart contracts. Part IV will discuss cryptocurrencies. What is a Decentralized Autonomous Organization? A Decentralized Autonomous Organization (“DAO”) is a blockchain-based organization deployed as a smart contract on top of an existing blockchain network. The key feature of DAOs is that they operate by decentralized ..read more
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Blockchain Applications in the Nonprofit Sector: Part IV – Cryptocurrencies
CharityLawyer Blog
by Hazel Herber
2d ago
This is Part IV of a four-part series about applications of blockchain technology in the nonprofit sector. Part I of this series introduced blockchain technology generally. Part II examined smart contracts. Part III discussed decentralized autonomous organizations. In this final Part, we discuss how cryptocurrencies may reinvent nonprofit fundraising, charitable investing, and international philanthropy. What is Cryptocurrency? Cryptocurrency, or “crypto”, is a digital form of currency. Its name is derived from the word cryptography, which underpins all blockchain technology. Cryptocurrency is ..read more
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Blockchain Applications in the Nonprofit Sector: Part II – Smart Contracts
CharityLawyer Blog
by Hazel Herber
2d ago
            This is Part II of a four-part series covering blockchain technology in the world of nonprofits. In this Part, we discuss smart contracts and how they might apply to nonprofits. Part I of this series introduced blockchain technology generally. Part III will cover decentralized autonomous organizations. Part IV will discuss cryptocurrencies. What is a Smart Contract? Smart contracts are computer-coded, self-executing agreements. Smart contracts can be used either as the entire agreement between parties, or as a complement to a t ..read more
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How Should Your Nonprofit Set the Compensation of its Executives? 
CharityLawyer Blog
by Ellis Carter
1w ago
An organization is entitled to tax-exempt status under Section 501(c)(3) provided that it is organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes. In addition, no part of the net earnings of the organization may inure to the benefit of any private shareholder or individual. Simply put, a tax-exempt organization may receive its status only to the extent that there are no gains to any private individual outside of a fair market value exchange. This means, nonprofits cannot pay unreasonable compensation.&n ..read more
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Unrelated Business Income Tax: Volunteer Labor Exclusion
CharityLawyer Blog
by Ellis Carter
2M ago
 As its name suggests, unrelated business income tax (“UBIT”) is an excise tax on exempt organization’s unrelated business income. Generally, the IRS will tax trade or business activity which does not substantially relate to an organization’s exempt purposes. However, Internal Revenue Code § 513(a)(1) excludes from UBIT unrelated trade or business activity which is performed without compensation (the “Volunteer Labor Exception”). When Does the Volunteer Labor Exception Apply? The Volunteer Labor Exception (VLE) to UBIT applies when the exempt organization carries on an unrelated acti ..read more
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“Friends of” Organizations
CharityLawyer Blog
by Hazel Herber
2M ago
U.S. donors commonly seek to support foreign charities aiding in international causes. Although donors may make contributions directly to charities outside the United States, they will not be able to take advantage of the tax deductions permitted when donating to domestic 501(c)(3) charities. Accordingly, foreign charities often wish to establish a domestic 501(c)(3) “Friends of” organization to access donations from generous supporters in the U.S. What is a “Friends of” Organization? A “Friends of” organization is a domestic 501(c)(3) organization setup by a supporters of a foreign charity fo ..read more
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How to Start a Nonprofit in Arizona
CharityLawyer Blog
by Hazel Herber
2M ago
So you think you want to start a nonprofit in Arizona? Our firm receives many calls weekly from people who want to start a nonprofit in Arizona, and we have even published a more general start-up guide. Here, we provide an overview of the legal documents and mechanics required to start a nonprofit in Arizona and apply for tax exemption for it. Finally, we discuss the tasks necessary to maintain the Arizona nonprofit corporation. I.  Select the Entity. Arizona founders have four entity options when starting an Arizona nonprofit: 1) form a nonprofit corporation; 2) form a charita ..read more
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Public Inspection  – Exempt Organization Tax Records 
CharityLawyer Blog
by Ellis Carter
3M ago
Tax-exempt organizations must allow timely public inspection of their last three annual information returns and their exemption application or risk steep penalties. Many nonprofits are caught off guard when they receive their first request. Below is a summary of what must be provided and when and what may be withheld. Documents Exempt Organizations Must Disclose Specifically, tax-exempt organizations must make the following forms available for public inspection: Form 1023 Form 1023-EZ Form 1024 Form 1024-A Form 990 Form 990-EZ  Form 990-PF  Form 990-T  Form 990-BL  Form 10 ..read more
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Trademark Protection For Nonprofits
CharityLawyer Blog
by Ellis Carter
3M ago
Trademark protection is vital for nonprofits as most do not sell goods or services. Rather, they trade on their public goodwill and reputation to convince the public to give them money in exchange for a promise to use it to pursue their mission. A trademark protects a good or service unique to your organization. You can trademark a word, phrase, slogan, symbol, design, or even sound used to identify your distinct product. Most often, nonprofits will trademark their name, program names, and logos. As your nonprofit grows it becomes increasingly more important to protect your brand thr ..read more
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Tax-Exempt Political Organizations
CharityLawyer Blog
by Ellis Carter
3M ago
Midterm elections are ramping up in the United States which means tax-exempt political organizations and their activities will once again be in the spotlight. Political organizations are unique organizations which operate under both federal tax and election law. Because of the overlap, rules governing political organizations can be convoluted and hard to digest. A political organization is a party, committee, association, fund, or other organization organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures to influence the selecti ..read more
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