Vol. 1, No. 1 • September 2018
A monthly collection of articles (synopses and references) that may be of interest to those interested in the work of NPOs. Please refer to the full article for complete information on the subject.
Topic/Issue:Volunteering Boosts Morale, Loyalty
Source:New Jersey Business
Reference/URL:August 2018 issue, page 20
Synopsis: Cites Deloitte’s 2017 Volunteerism study which found that 90% ofAmericans believe that companies that provide volunteer opportunities to their employees offer a better work environment than those who don’t.
Topic/Issue:Decipher the Form 990 Sections on Compensation Reporting
Source:Bowman & Co, LLP/”Giving Back—A Not for Profit Newsletter”
Synopsis:When filingForm 990 with the IRS, not-for-profit organizations must provide a great deal of information about the compensation of officers, directors, trustees, key employees and others. This includes base compensation, bonuses/incentives, current year payments earned in a prior year, severance payments, longevity of service awards and other reportable compensation. Article contains a rundown of what is required.
Topic/Issue: The Battle Over Donor-Advised Funds: Does the Field Need More Regulation?
Synopsis:NPQis doing something different in this issue—offering up three features from the summer 2018 edition of the Nonprofit Quarterly, each looking at the need for the review of donor-advised funds. Two are written by well-known advocates for regulation of this rapidly expanding field of philanthropy—Dean Zerbe (“DAF Reform—A Chance to Provide a Real Benefit to Working Charities”) and Ray Madoff (“Three Simple Steps to Protect Charities and American Taxpayers from the Rise of Donor-Advised Funds”)—and one is written by NPQeditor-in-chief Ruth McCambridge. This last one—“Do Donor-Advised Funds Require Regulatory Attention?”—lays out NPQ’s own current policy position, which is informed not only by the other two but also by numerous other examinations of and debates about the field. It is also prompted in part by the rapid growth of this field of philanthropy. This cluster of articles is meant to spark further discussion and unified action in the terms of a combination of external and self-regulation, and NPQwelcome additional contributions to the conversation.
Topic/Issue: Tax “Parity” Between Nonprofit and For-Profit Businesses?
Reference/URL:Excerpt from National Council of Nonprofits’ endorsement letterof H.R. 6037, the Nonprofits Support Act, sponsored by Representative Michael Conaway (R-TX))
Synopsis:Reportedly, the new tax on nonprofit expenses was imposed to ensure “parity” between for-profits and nonprofits in regard to qualified transportation benefits. This article suggests that this rationale is flawed at its core. Under prior law, for-profit employerspaid taxes on profits at a higher tax rate and could deduct their expenses for providing transportation benefits to their employees. Of course, if they had no profits, they paid no taxes. The tax deduction was an inducement for those employers to provide the employee benefit. The Tax Cuts and Jobs Act dramatically lowered the taxes that for-profit businesses will now pay, and, as a minor reduction in the cost of the overall tax legislation, repealed the deductibility of the costs of the transportation benefits. Nonprofit employers, on the other hand, never had a deduction for these expenses and, importantly, never provided transportation benefits to gain a tax deduction. Rather, nonprofits have always provided transportation benefits to attract and retain workers, while helping to reduce traffic and air pollution. Nonprofits received little, if any, gains under the Tax Cuts and Jobs Act and yet are now subject to a new tax on transportation benefits in the name of “parity.” Now nonprofits will be forced to pay taxes even when they lose money. The authors consider the “parity” argument a “false equivalency,” and believe that repeal is appropriate.