Nonprofit Law: A Roundup of Recent Legal Commentary

For your reference, a roundup of legal advisories regarding the new IRS Form 990, unpaid internships, employment matters, fundraising, lobbying, and other issues and concerns particular to nonprofit organizations: 

Recent Developments for Exempt Organizations, Including 2011 Year in Review (Ropes & Gray LLP)

“Looking ahead, the IRS Exempt Organizations division recently released its annual work plan outlining activities it intends to focus on in 2012. In addition to continuing various general projects, the division’s activities will center around three main areas: implementing new legislation, incorporating data from the redesigned Form 990 into various compliance initiatives and continuing collaborative projects with other IRS divisions and external stakeholders.” Read the full update»

IRS Releases New Form 990 (King & Spalding)

“The IRS has released the final Form 990 for 2011, the return filed by tax-exempt organizations, which includes some significant changes regarding reporting of investment partnership assets and foreign investments.” Read the full update»

IRS Releases Revised Form 990 With Changes Affecting Joint Ventures, Compensation and Hospitals (Foley Hoag LLP)

“Most organizations that are exempt from federal income tax under section 501(a) of the Internal Revenue Code must file an annual information return or submit an annual electronic notice. Generally, an organization’s gross receipts and total assets determine which filing the organization must make, although different filing criteria apply to certain organizations…” Read the full update»

All About UBIT: What Nonprofit Leaders Need to Know (Venable LLP)

“Organization recognized as exempt does not pay income tax on income received by organization… If the income received is unrelated business income (UBI or UBTI), subject to taxation; organization must report and pay tax at corporate rate.” Read the full presentation»

The ABCs of Nonprofit Organization General Counsel Issues (Fox Rothschild)

“In order to provide your board members with answers, empower them by creating a board manual, which offers a practical approach to providing information to board members. Work with your board chair to assess which documents should be readily available to your board members, which documents are needed and which are not.” Read the full update»

Unpaid Internships At Non-Profits Or Arranged By Schools (Fisher & Phillips LLP)

“Non-profit organizations permitting internships, and entities considering participating in student internships, should not simply assume clear-sailing where the risk of FLSA claims is concerned. For one thing, it is unlikely that USDOL sees such unpaid internships as being ‘generally permissible’ in each situation, or for non-profits of every kind, or for all school-sponsored arrangements.  Even USDOL does not consider the Fact Sheet to be an authoritative or binding official position.” Read the full update»

Nonprofit Directors and Trustees – Should Board Service Pay (Ellis Carter)

“Trustee compensation is a sensitive topic in the philanthropic world. Many people believe that board members should serve out of a sense of giving back to their community. However, the philanthropic world is diverse and there are many positions that require extraordinary talent and an extraordinary time commitment to lead them. Nonprofit organizations are also increasingly complex and subject to complex rules and that make significant demands on that talent.” Read the full update»

How Nonprofits Can Avoid the Legal Pitfalls of Telecommuting Employees (Venable LLP)

“… technological advances, when combined with the growing concerns over gasoline prices and work-life balance, make telecommuting a very attractive option for many nonprofits and their employees. Of course, federal and state labor laws still apply to the telecommuting employee.  Whether a nonprofit should, or in some cases must, permit telecommuting depends upon an analysis of the unique issues that telecommuting raises under federal and state law.” Read the full update»

Legal Considerations when Engaging Volunteers (Ellis Carter)

“A nonprofit organization needs to be cognizant of the fact that it can be held liable for the wrongdoing of an employee or volunteer. Under the doctrine of ‘respondeat superior,’ an employer is responsible for torts committed by an employee while the employee is acting in the course and scope of his or her employment. Arizona courts have acknowledged that volunteers may also be considered servants or agents for a principal under doctrine of respondeat superior.” Read the full update»

How Nonprofits Can Raise Money and Awareness through Promotional Campaigns without Raising Legal Risks (Venable LLP)

“Assess whether fundraising campaign is worthwhile in light of compliance costs/burden. Further, determine whether the campaign will not only help achieve financial goals, but will also effectively promote your organization’s brand.” Read the full update»

A Guide to Political and Lobbying Activities – Updated: February 2012 (K&L Gates LLP)

“Our latest edition significantly updates the Guide to Political and Lobbying Activities to include a new Chapter V highlighting the limits on political and lobbying activity by public charities organized and operating under Section 501(c)(3) of the Internal Revenue Code.” Read the full update»

HHS Gives Non-Profit Employers with Religious Objections An Additional Year to Cover Birth Control (Davis, Brown, Koehn, Shors & Roberts, P.C.)

Last August HHS revised the definition of preventative care that non-grandfathered plans must cover without cost-sharing to include all FDA approved forms of birth control… On Friday HHS announced that it was giving non-profit employers who currently do not cover birth control because of religious objections an additional year to comply with the new definition of preventative care services.” Read the full update»

State and Local Developments

Charitable Solicitation and Commercial Co-Venturer Red Flags: Insights for Charities and Marketers from the NY Attorney General (Venable LLP)

“In November 2011, it was widely reported that the New York Attorney General (the ‘NY AG’) had opened an investigation into the cause-related marketing efforts of ‘pink ribbon’ charities.  As part of its examination, the NY AG sent comprehensive questionnaires to at least 40 charities and 130 companies asking for detailed information specific to activities in which the sale of a product or service is advertised to benefit a charitable cause.  Venable has since obtained a redacted copy of a typical questionnaire sent to companies involved in cause-related marketing related to breast cancer.” Read the full update»

New Philadelphia Lobbying Law: Implications for Nonprofit Organizations (Schnader Harrison Segal & Lewis LLP)

“Philadelphia’s new lobbying law took effect on January 3, 2012. Incorporated into the Philadelphia Code as Chapter 20-1200, the law’s reach is not limited to professional lobbyists and lobbying firms. In fact, the law’s definition of lobbying includes activities frequently engaged in by many nonprofit organizations. Under the new law, lobbying generally occurs whenever a communication is made in an effort to influence legislative or administrative action.” Read the full update»

NY AG’s Initiatives to Strengthen and Revitalize New York Nonprofits (Venable LLP)

“On February 16, 2012, New York Attorney General Eric Schneiderman launched a comprehensive plan to reform and revitalize New York’s nonprofit sector… Attorney General Schneiderman described this initiative as the ‘most significant reform effort in decades,’ which will include legislation to eliminate outdated and costly regulatory burdens on nonprofits; strengthen oversight and accountability; and grant the New York Attorney General’s office specific authority to challenge improper self-dealing at nonprofits.” Read the full update»

Charitable Giving Initiative Under Consideration by Massachusetts Legislature (Foley Hoag LLP)

“A proposed law under consideration in Massachusetts may make it easier for Massachusetts residents to financially support their favorite charity. For charitable organizations that have seen declining levels of donations over the past few years, the proposed law might create a new avenue through which needed funds could be made available.” Read the full update»

New Pennsylvania Rules Require Immediate Appeals in Matters Involving Trusts, Charities, and Other Proceedings Heard by Pennsylvania Orphans’ Courts (Schnader Harrison Segal & Lewis LLP)

“On February 13, 2012, new amendments to the Pennsylvania Rules of Appellate Procedure took effect and made substantial changes to the right to appeal from orders entered by Pennsylvania’s Orphans’ Courts. The Orphans’ Court Divisions of the Pennsylvania Courts of Common Pleas have jurisdiction in a wide variety of domestic relations matters, including adoptions, custody of minors, and guardianships. They also have broad jurisdiction over matters involving nonprofit corporations, public charities, trusts, and decedents’ estates.” Read the full update»

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