Over the past few weeks, it has been easy for the days to blur together—with schedules important for stability but also keeping our socially distant lives accordingly mundane. But tomorrow, May 5, 2020 is an important day to note, promote, and celebrate! #GivingTuesdayNow was organized, in part, as an effort to encourage donations to nonprofit organizations helping to address the immense collateral damage inflicted by COVID-19. Now.GivingTuesday.Org offers other ways to support the effort while maintaining social distancing:
Support healthcare workers by donating supplies, advocating for them, and staying home
Help out small businesses by buying gift cards or writing an online review
Combat loneliness by reaching out to a neighbor, relative, seniors or veterans
A simple-but-important step every Iowa nonprofit can and should take is to promote #GivingTuesdayNow as a part of fundraising—particularly with programs and services focused on serving populations affected by COVID-19.
Engage board members, staff, past donors, potential donors, and other stakeholders with fundraising efforts by posting #GivingTuesdayNow content and participating in the international digital conversation. Consider the many resources hosted on now.givingtuesday.org as a good starting point for content inspiration.
#GivingTuesdayNow is an important reminder that especially during this challenging time Iowans need high-functioning nonprofits now more than ever.
The mission of Gordon Fischer Law Firm is to promote and maximize charitable giving in Iowa. This is all year long—not just on #GivingTuesdayNow. GFLF is available to work with nonprofit organizations on every element of operations including but certainly not limited to:
Training of nonprofit boards and staff and educating on charitable giving tools and techniques
Employment law guidance for nonprofits including advice about hiring and firing, and drafting of policies and procedures
https://www.gordonfischerlawfirm.com/wp-content/uploads/2020/05/91596770_2932123880199632_6946808103165755392_n.png312820Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2020-05-04 18:32:402020-05-18 11:28:31Mark Your Calendar: #GivingTuesdayNow is Tomorrow
Recently I had the chance to speak with Jeff Stein the News and Program Director at News/Talk 1540 KXEL. We chatted about charitable donations to nonprofits in this age of COVID-19. Because there are so many financial challenges affecting both nonprofit organizations (and the beneficiary populations they serve) and current and prospective donors, this is a precarious, fragile time.
In preparation for the #GivingTuesdayNow global on Tuesday, give this interview a listen. It’s less than twenty minutes and will give you some solid insights into how to practice strategic charitable giving in a way that’s most useful to the nonprofit organizations you care most about during this trying time.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2020/05/Screen-Shot-2020-05-05-at-6.35.01-PM.png6901027Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2020-05-02 18:30:512020-05-18 11:28:31Listen to my Latest Radio Interview: Charitable Giving During COVID-19
Public charities and private foundations are both classified as 501(c)(3)s by the IRS. However, the different nonprofit operating structures come with different benefits, requirements, and challenges that can make navigating compliance difficult. I’ve written previously on aspects of private foundations including prohibited grants, payout requirements, and avoiding self-dealing. The best way to deal with many of the ins and outs of learning about private foundations is to deal with each individually; today let’s focus on jeopardizing investments.
Don’t Jeopardize the Foundation
Failing to exercise prudence and investing in ways that threaten the foundation’s ability to carry out its exempt purposes—called jeopardizing investment—and can result in a stiff penalty.
Many factors can contribute when determining whether or not an investment can be considered jeopardizing. At the least, a private foundation’s managers must exercise reasonable, ordinary business judgment and prudence in investing a foundation’s assets. Investments should also be made with the short and longterm financial needs of the entity in mind. This is part of baseline fiduciary duty board members must act with by closely overseeing the nonprofit’s finances.
In cases of jeopardizing investments, an excise tax of 10% is imposed on the foundation for the IRS-defined taxable period. Foundation managers can also be held personally liable and taxed up to a max of $10,000 (or 10% of the jeopardizing investment) if the “knowing, willfully, and without reasonable cause” participated in the making of the investment.
Furthermore, if the foundation does not take steps to remove an investment, an additional tax can be imposed on both the foundation and the responsible foundation managers.
High-Risk Activities: Proceed with Caution
While no category of investment is outright prohibited, a private foundation’s managers must pay close attention to high-risk activities, such as trading securities on margin, trading in commodities futures, and short selling, among others.
All of this said, this is general advice and each charitable organization is unique. I highly recommend seeking out an attorney well-versed in nonprofit law to assist with multiple aspects of the charitable organization life cycle from the formation through employee hiring through board development.
Questions? Want to make sure your private foundation is taking the right steps to avoid adverse consequences like audits and taxes on top of everything else there is to keep track of? Don’t hesitate to contact me.
Mark Your Calendar: #GivingTuesdayNow is Tomorrow
Charitable GivingOver the past few weeks, it has been easy for the days to blur together—with schedules important for stability but also keeping our socially distant lives accordingly mundane. But tomorrow, May 5, 2020 is an important day to note, promote, and celebrate! #GivingTuesdayNow was organized, in part, as an effort to encourage donations to nonprofit organizations helping to address the immense collateral damage inflicted by COVID-19. Now.GivingTuesday.Org offers other ways to support the effort while maintaining social distancing:
A simple-but-important step every Iowa nonprofit can and should take is to promote #GivingTuesdayNow as a part of fundraising—particularly with programs and services focused on serving populations affected by COVID-19.
Engage board members, staff, past donors, potential donors, and other stakeholders with fundraising efforts by posting #GivingTuesdayNow content and participating in the international digital conversation. Consider the many resources hosted on now.givingtuesday.org as a good starting point for content inspiration.
#GivingTuesdayNow is an important reminder that especially during this challenging time Iowans need high-functioning nonprofits now more than ever.
The mission of Gordon Fischer Law Firm is to promote and maximize charitable giving in Iowa. This is all year long—not just on #GivingTuesdayNow. GFLF is available to work with nonprofit organizations on every element of operations including but certainly not limited to:
Interesting in discussing your nonprofit’s operational needs? Contact me for a free consultation at 515-371-6077 or gordon@gordonfisherlawfirm.com.
Listen to my Latest Radio Interview: Charitable Giving During COVID-19
Charitable GivingRecently I had the chance to speak with Jeff Stein the News and Program Director at News/Talk 1540 KXEL. We chatted about charitable donations to nonprofits in this age of COVID-19. Because there are so many financial challenges affecting both nonprofit organizations (and the beneficiary populations they serve) and current and prospective donors, this is a precarious, fragile time.
In preparation for the #GivingTuesdayNow global on Tuesday, give this interview a listen. It’s less than twenty minutes and will give you some solid insights into how to practice strategic charitable giving in a way that’s most useful to the nonprofit organizations you care most about during this trying time.
Private Foundations: Avoid Jeopardizing Investments
NonprofitsPublic charities and private foundations are both classified as 501(c)(3)s by the IRS. However, the different nonprofit operating structures come with different benefits, requirements, and challenges that can make navigating compliance difficult. I’ve written previously on aspects of private foundations including prohibited grants, payout requirements, and avoiding self-dealing. The best way to deal with many of the ins and outs of learning about private foundations is to deal with each individually; today let’s focus on jeopardizing investments.
Don’t Jeopardize the Foundation
Failing to exercise prudence and investing in ways that threaten the foundation’s ability to carry out its exempt purposes—called jeopardizing investment—and can result in a stiff penalty.
Many factors can contribute when determining whether or not an investment can be considered jeopardizing. At the least, a private foundation’s managers must exercise reasonable, ordinary business judgment and prudence in investing a foundation’s assets. Investments should also be made with the short and longterm financial needs of the entity in mind. This is part of baseline fiduciary duty board members must act with by closely overseeing the nonprofit’s finances.
Penalty Payment
In cases of jeopardizing investments, an excise tax of 10% is imposed on the foundation for the IRS-defined taxable period. Foundation managers can also be held personally liable and taxed up to a max of $10,000 (or 10% of the jeopardizing investment) if the “knowing, willfully, and without reasonable cause” participated in the making of the investment.
Furthermore, if the foundation does not take steps to remove an investment, an additional tax can be imposed on both the foundation and the responsible foundation managers.
High-Risk Activities: Proceed with Caution
While no category of investment is outright prohibited, a private foundation’s managers must pay close attention to high-risk activities, such as trading securities on margin, trading in commodities futures, and short selling, among others.
Get the Right Advice
All of this said, this is general advice and each charitable organization is unique. I highly recommend seeking out an attorney well-versed in nonprofit law to assist with multiple aspects of the charitable organization life cycle from the formation through employee hiring through board development.
Questions? Want to make sure your private foundation is taking the right steps to avoid adverse consequences like audits and taxes on top of everything else there is to keep track of? Don’t hesitate to contact me.