Public Confidence in Nonprofits Varies

According to a survey conducted by the Chronicle of Philanthropy — which is the first survey to measure public confidence in charities in almost ten years — approximately 70% of Americans have a fair, but not particularly high, level of confidence in charities. More than 80% responded that charities do a “very good” or “somewhat good” job helping people.

However, a significant number of respondents expressed their concern regarding how charities manage their finances. One-third of those surveyed said charities do a “not too good” or “not at all good” job of spending money in a wise fashion, and 41% said their administrators are compensated too highly. Notably, one in two said that, when deciding which organization to donate money to, that it’s “very important” if charities spend a low amount on salaries, administration and fundraising. Additionally, 34% said that this spending characteristic is “somewhat important.”

When completing your organization’s Form 990 or drafting your annual report, these survey results should be seriously considered.

Pro Bono Marketing Marathons Offered to Charities

There may be a new resource for nonprofits requiring help with their advertising, marketing and communications work. CreateAthon, a nonprofit based in Richmond, VA, recruits creative professionals, as well as students in the communicating arts field, to serve nonprofits using a 24-hour marathon format known as CreateAthon Events.

At each of these events, teams of 20 to 240 “creatives” provide pro bono services needed by up to twelve nonprofits to fulfill their missions. Nonprofits that wish to participate can apply to the companies and colleges that host the events three to four months in advance. CreateAthon aims to deliver $100 million in free marketing services to charities by the year 2020.

The IRS Definition of “Interested Persons”

Nonprofits that are required to file Schedule L, “Transactions with Interested Persons,” with their Form 990 or 990-EZ, should make sure that they fully understand the definition of the term “interested person.” Since 2015 is only the second year that the IRS’s new approach to the definition of “interested persons” applies, there may still be some confusion among nonprofits regarding the changes.

Previous to 2014, each part of the schedule had its own definition of the term. The definition hasn’t changed — an “interested person” remains a disqualified person under Section 4958, the provision addressing the tax on excess benefit transactions.

For Parts II-IV, the definition now includes the organization’s founder and his or her family members; major contributors, as well as their family members; and 35% controlled entities of creators, founders, substantial contributors, or any of their family members.

If you should need more information on how your organization should report transactions on Schedule L, contact your CPA.

© 2016

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