The Crisis for Nonprofit Organizations The COVID-19 crisis has crippled many organizations. As the coronavirus pandemic moves across communities, more and more nonprofit organizations are considering mergers as options to overcome challenges caused by COVID-19 and the economic downturn. While some federal relief has provided support to some nonprofit organizations, for many organizations it has not been enough. Faced with the prospect of shutting or drastically reducing operations, nonprofits — particularly those that provide overlapping or complimentary services — may consider combining as a ..read more

Loss of tax-exempt status could have disastrous consequences for a 501(c)(3) charitable nonprofit. It is helpful for members of nonprofit corporations to be familiar with the importance of tax-exempt status, and situations that put a charitable nonprofit’s tax-exemption in jeopardy. How Can a Nonprofit Lose its Tax-Exempt Status?  There are several reasons an organization’s tax-exempt status can be in jeopardy and revoked. The following are just some of the reasons an organization’s tax-exempt status may be revoked: Failure to file federal or state tax returns for 3 consecutive years ..read more

Raffle Requirements for Nonprofit Organizations in California In California, charities and certain other nonprofit organizations may conduct raffles to raise funds for beneficial or charitable purposes. This exception to the general constitutional prohibition against lotteries requires that at least 90 percent of the gross receipts from these raffles go directly to beneficial or charitable purposes in California. Which organizations qualify and how the raffles must be conducted are governed by California Penal Code section 320.5. If participants are required to purchase a ticket in order to ha ..read more

As the 2020 election draws near, it is important to remember the risks to an organization’s tax-exempt status when it comes to political campaign activities. Charitable Nonprofits May Not Engage in “Political Campaign Activity” In return for its favored tax-status, a charitable nonprofit promises the federal government that it will not engage in “political campaign activity” and if it does, IRS regulations mandate that the charitable nonprofit will lose its tax-exempt status. Similarly, the assets of a charitable nonprofit may not be provided as a campaign contribution to a candidate for publ ..read more

The California Secretary of State imposes a penalty for failure to file the Statements of Information for the following types of business entities: Corporations - annually (statement due once a year) Nonprofit Corporations - biennially (statement due once every two years) Limited Liability Companies - biennially (statement due once every two years) These forms are also known as Statement of Officer filings and can be completed online on the SOS website. Statements of Information for a limited liability company (LLC) may be filed online. Statements of Information for a corporation may ..read more

More Help for Nonprofits Facing Challenges from COVID-19 House and Senate Pass the "Protecting Nonprofits from Catastrophic Cash Flow Strain Act” This bipartisan bill would ensure that nonprofits receive Federal help for unemployment payments upfront, rather than being reimbursed later. This would also free up much needed funds to keep nonprofits running and serving Americans. What is the Catastrophic Cash Flow Strain Act? The Senate and House have unanimously passed legislation introduced by Sens. Chuck Grassley (R-Iowa), Sherrod Brown (D-Ohio), Tim Scott (R-S.C.) and Ron Wyden (D-Ore.), the ..read more

Challenges for Nonprofit Organizations Due to COVID-19 As a result of the COVID-19 pandemic, many nonprofits are experiencing increased demands for services, yet have been hindered or completely cut off from responding due to stay at home orders, revenue loss, and physical distancing. Recent reports indicate over 60% of all nonprofits report a decline in individual donations. Due to the unprecedented economic disruption caused by the coronavirus (COVID-19) pandemic, many nonprofit organizations may have to close permanently in a hurry. Even so, it’s never wise to simply close down and let the ..read more

Challenges Nonprofit Organizations are Facing Due to COVID-19 According to a recent survey by The Nonprofit Institute, as a result of COVID-19, San Diego nonprofits report a decline in donations and expect more layoffs. To download the report issued by The Nonprofit Institute, visit the University of San Diego’s webpage. As a result of the COVID-19 pandemic, many San Diego nonprofits are experiencing increased demands for services, yet have been hindered or completely cut off from responding due to stay at home orders, revenue loss, and physical distancing. In an effort to understand the impac ..read more

On Friday, March 27, 2020 Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Small Business Administration’s section of the CARES Act applies to nonprofits, with an allocation of $349 billion dollars to keep workers at small businesses and nonprofits employed amid the economic downturn and the COVID-19 pandemic. The loan amounts will be forgiven as long as: 1) The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and 2) Employee and compensation levels are maintaine ..read more

Is Your Nonprofit Organization Looking for IRS Guidance Regarding COVID-19? The IRS has established a special section on its website focused on steps to help taxpayers, businesses, including nonprofit organizations, and others affected by the coronavirus. The IRS will update the webpage as new information is available. The IRS provides various news releases and guidance regarding the coronavirus. Stimulus and Tax Breaks for Nonprofit Organizations A coalition of 30 national nonprofits and charity advocacy groups sent a letter to Congress urging lawmakers to include nonprofits in any stimulus p ..read more