August 2007 No. 32Table of ContentsNonprofits that don’t pay taxes |
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Nonprofit employees are just as subject to payroll taxes as anyone else, but the federal General Accounting Office (GAO) reports that at least 55,000 tax-exempt groups were not paying them. On top of that, 1,200 of that group were getting more than $14 Billion in grants from federal agencies.
This situation will not likely continue if Congress has a say. A House committee wants the US Treasury Department to “combat these abuses without placing unreasonable burdens on the vast majority of charities that are playing by the rules,” The Chronicle of Philanthropy says. The most common forms of abuse are:
The Independent Sector said Congress should build on the momentum generated by its adoption of the recommendations from the Panel on the Nonprofit Sector and now:
We’ll have to wait to see what Congress does.
Having enough money, for today and tomorrow, is the top concern of Hoosier nonprofits. Really, you say. Duh! But now you can quote a university study to make this point. Nonprofit Capacity Assessment: Indiana Charities 2007 documents how even well-established nonprofits face “significant challenges across the board,” writes Kirsten Grønbjerg, well-known researcher with Indiana University’s Center on Philanthropy. Here are the report’s main points:
Here are ways that funders (aka United Ways) can help improve the effectiveness of Hoosier nonprofits:
See www.indiana.edu/~nonprof/results/npcapacity.html for possible hints on what your United Way can do.
The IU Center on Philanthropy can give a focused sketch of the philanthropic community in your hometown’s area, for a small price. For example, the Ball Brothers Foundation and the Indianapolis Foundation helped fund two studies of the six-counties around Muncie. They described the types of nonprofits, their revenues, expenses, use of volunteers, and demographics. Another zeroed in on nonprofit staff, where they work, what they do, what they get paid, and growth trends. Take a look at both reports—
www.indiana.edu/~nonprof/results/
npsurvey/inscommuncie.pdf www.indiana.edu/~nonprof/results/
inemploy/muncieempl05.pdf
—and see if it’s worth exploring this kind of picture of your region. Don’t wait for the next census. Contact Kirsten Grønbjerg at kgronbj@indiana.edu now.
Reporting on your nonprofit’s year to the Internal Revenue Service (IRS) will become different in the future, compared to the past 25 years. The changes will likely go into effect for calendar 2008 with reports due in 2009, but it’s not too soon to get ready. Here are the changes being reviewed now that will apply to nonprofits with at least $25,000 in annual income:
And be careful: nonprofits with less than $25K income already must file a Form 990-N for 2007, with a few exceptions. You can get a copy of the likely new 990 at www.irs.gov/charities/article/0,,id=171216,00.html and respond to these proposed alterations by September 14 by email to Form990Revision@iar.gov.
The United States leads the world in the amount of government foreign aid—$28Billion in 2005 (the most recent data). Yet that amount is only 2/10th percent of the nation’s gross national income, far behind the leading Scandinavian countries that give nearly 1%. Total aid to the developing world comes to $107B.
Yet, American private giving more than triples USA government foreign aid, and our private lending and investment is 2.5 times as much, according to the Hudson Institute’s The Index of Global Philanthropy. Here’s the makeup of U.S. private assistance to other countries in 2005:
| Source of U.S. Philanthropic Aid | Amount |
% |
| Individual remittances | $61.7B |
65% |
| Private & Voluntary organizations | $16.2B |
17% |
| Religious Organizations | $5.4B |
6% |
| Corporations | $5.1B |
5% |
| Universities & Colleges | $4.6B |
5% |
| Foundations | $2.2B |
2% |
| Total | $95.2B |
100% |
"Individual remittances” are amounts sent home by migrants living in the USA to their native countries. This “outpaced both government aid and private capital flows to poor countries,” Hudson reports.
Interim execs. As Baby Boomers increasingly leave top nonprofit posts—75% likely by 2010—to undertake long-awaited retirement projects, more and more charities are enticing them to become short-term “in-between” CEOs to help them plot strategic directions and fix internal problems or external relations, reports CompassPoint Nonprofit Services. Don’t be surprised if you have pay a little more for this “fill-in” help.
If no will, there’s no way. Half of Americans told The Nonprofit Times that they neither have a will nor have included a charity in it as a beneficiary. Yet, if they’ve been involved as a volunteer, they are more likely to make a planned gift, regardless of age, income bracket, or racial/ethnic group. Get the details at www.nptimes.com/07June/June%201%20Special%20Report.pdf.
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