Source: https://www.wtplaw.com/practices/nonprofit-organizations-and-associations
Timestamp: 2019-04-24 10:46:16+00:00

Document:
Charitable Solicitation and Fundraising: Including all aspects of raising revenues – e.g., planned giving, corporate and institutional giving, donor clubs, special events, licensing, paid advertising, direct mail, on-line giving and workplace giving programs – as well as meeting state and local charitable solicitation registration and reporting requirements.
Entity Formation: Including drafting documents necessary to form nonprofit organizations under state law, requesting recognition of federal tax-exempt status, determination of public charity or private foundation status and qualification for exemption from various state taxes and state charitable solicitation registrations.
Governance / Fiduciary Duties: Including the role of members, boards of directors, committees, officers, managers, employees and agents; legislative reform proposals and suggested “best practices” guidelines; fiduciary responsibilities and issues related to indemnification and insurance coverage; and development of effective bylaws and policies.
Joint Ventures and Subsidiaries: Including joint venture and entrepreneurial opportunities, and creation of related and affiliated tax-exempt entity structures.
Labor and Employment Matters: Including personnel policies, employee benefit plans, employment contracts and separation agreements, as well as representing clients on EEOC and similar discrimination matters and in Workers' Compensation, unemployment, and immigration proceedings.
Lobbying, Campaign Finance and Government Ethics Compliance: Advising on, among other things, federal and state laws and regulations, 501(h) elections, registration and reporting obligations, representation before federal and state regulators, and allocation of lobbying expenses between related organizations.
Membership Programs: Including the tax consequences of providing benefits to members and on issues related to membership publications, special events and convention planning, and licensing trademarks for membership identification programs.
Corporate Finance and Transactions: Including a comprehensive range of commercial, financial and transactional issues, such as formation, capital raising, mergers and acquisitions, recapitalizations and reorganizations, corporate succession planning and liquidity events.
Tax-Exempt Status Recognition: Including obtaining and maintaining recognition of tax-exempt status at the federal and state levels, as well as representation of nonprofit organizations before the Internal Revenue Service, state taxing authorities and other governmental agencies.
Unrelated Business Income Analysis: Including matters connected with the unrelated business income tax, such as in connection with real estate transactions, fundraising efforts, website activities and social entrepreneurship efforts.
Lawyers for Nonprofit Organizations, Professional and Trade Associations, Certification and Accreditation Bodies, Churches, Fire Departments, Political Organizations, Hospitals, Colleges, Retirement Communities, and other tax-exempt entities.
More and more associations are moving toward the automatic renewal model for their membership dues.
In 1996 the tax law was changed to provide an “intermediate sanction” for certain exempt organizations which engage in “excess benefit” transactions. Prior to that time, loss of exempt status was the only penalty the IRS could impose on organizations that were not operated exclusively for exempt purposes. The “intermediate sanction” created by Congress was a new tax, intended to be less severe than a revocation of exempt status.
It’s not if, but when: Events beyond your control will disrupt your meeting. To minimize your association’s risk, be sure your contracts and insurance are in order, and take practical steps to fend off preventable problems.
A good contract forms the basis for your collaboration with a consultant. Follow these do’s and don’ts to improve the likelihood of a good working relationship and results that meet your association’s needs.
The District of Columbia has established a new requirement for nonprofit organizations to renew their DC tax exemptions every five years. If you received an exemption in 2014 or an earlier year, you can expect to receive a renewal notice in 2019 if you have not received one already.
On November 23, 2018, the European Data Protection Board (the “EDPB”) published the Guidelines 3/2018 on the territorial scope of the GDPR (Article 3) (adopted on November 16), which are open to public comments until January 18, 2019. As the EDPB announced in its news release, the purpose of the Guidelines is to help provide a common interpretation of the territorial scope of the GDPR and clarify the GDPR’s application in various situations, in particular where the data controller or processor is established outside of the EU.
In the new Revenue Procedure 2018-15, the IRS has indicated that it will generally no longer require a new tax exemption application from a Section 501(c) organization that changes its form or place of organization. This change will make it easier for an association or other nonprofit corporation to take advantage of the benefits of re-incorporating in a state that is either more convenient or a state that may have more favorable laws governing nonprofit corporations.
On June 21, 2018, the U.S. Supreme Court in South Dakota v. Wayfair, Inc., upheld a South Dakota statute requiring out-of-state sellers of goods to collect and remit sales tax if they have significant business in South Dakota, thus rejecting the long-standing physical presence requirement that prohibited many states from collecting sales taxes on goods sold to residents of their states. South Dakota v. Wayfair, Inc., 201 L. Ed. 2d 403 (2018). Forty-one states, two U.S. Territories and the District of Columbia asked the Supreme Court to uphold the South Dakota statute, which suggests that several other states may enact similar statutes in the future or move to enforce existing ones.
The Tax Cuts and Jobs Act created Section 4960 of the Internal Revenue Code that imposes a new 21% excise tax on certain tax-exempt entities (including any organization exempt under Section 501(c), (d), 401(a) or 115) on (i) the annual compensation (including benefits and deferred compensation) paid to its five (or more) highest-paid employees in excess of $1,000,000 and (ii) excess parachute payments paid to the same class of employees.
The Tax Cuts and Jobs Act (the “Act”) that went into effect on January 1, 2018 significantly impacts nonprofit organizations. The Act changes how unrelated business income to calculate UBIT must be calculated, requires employer paid excise tax on annual compensation in excess of $1 Million and on excess parachute payments paid to certain employees, and alters the tax treatment of employer paid expenses for transportation, parking expenses and athletic facilities. We have addressed those changes in other articles in our Newsletter. In this article, we will discuss how the Act gives rise to possible changes in charitable giving, establishes new tax withholding tables for employees and assesses an excise tax on certain university endowments. The Act did not, however, repeal the Johnson Amendment, which was on the table for elimination in earlier versions of the Act.
The Tax Cuts and Jobs Act was signed into law on December 22, 2017, and went into effect for taxable years starting January 1, 2018. Among its many changes to the tax code are certain provisions prohibiting tax exempt organizations from deducting expenses for certain fringe benefits provided to their employees. The change puts tax exempt organizations on a level playing field with for-profit entities with regard to certain employee benefits.
The Tax Cuts and Jobs Act that became effective on January 1, 2018, brought sweeping changes to the way organizations calculate and report federal taxes. Organizations exempt from federal tax were not spared from these changes. One change that could result in significant unrelated business income tax (“UBIT”) and/or operational burdens on exempt organizations is the change in the manner in which exempt organizations must calculate certain taxable income and the resulting UBIT.
Does your association have more retirement plan participants than it does full-time staff? If so, you have a fiduciary duty to find former employees who are owed benefits—and the Department of Labor is paying increased attention to who is meeting it.
The General Data Protection Regulation (GDPR) is a privacy regulation of the European Union designed to give individuals control over their personal data. The GDPR protects the privacy of individuals regardless of their nationality when their data is collected when they are located in the European Union, Iceland, Liechtenstein or Norway (EEA). For example, the personal data of an organization’s employee, independent contractor, or volunteer located in the EEA may be protected by the GDPR even if that individual is a U.S. citizen and resident.
Don’t let your association’s severance policy lead you into legal trouble. Consider these three important questions when designing a pay and benefits package for outgoing employees.
Consider this: An association employee attends the annual membership meeting. There is alcohol. A member becomes flirtatious with the employee and before anyone steps in, gropes her. Your organization cannot be held liable for conduct of a member, over whom you have no control, right?
What about this? A director makes comments at board meetings regarding his homophobic views. You have a staff member who attends these meetings who is gay. You can’t be liable for the board member’s conduct, right?
Most people are surprised to learn that one of the biggest risks for claims against associations involve employment practices. These range from the initial hiring decision to the final termination of employment, and include everything in between. These risks need to be identified and managed. Insurance coverage also is needed to protect against possible claims.
We previously discussed the differences between deferred compensation plans for tax-exempt employers, in particular; the tax attributes of Internal Revenue code Section 457(b) and 457(f) plans. However; participation in 457(b) and 457(f) programs is limited to a "select group of management or other highly compensated employees" and those arrangements generally serve as a supplement to the retirement programs available for all employees.
On the campaign trail, now President Trump spoke of getting tough on immigration violators – both those unlawfully present in the U.S. and the employers who facilitate their presence here by hiring undocumented workers. Many articles followed as to precisely what this get tough attitude would mean with respect to worksite enforcement, including I-9 compliance, as well as to those employers who currently employ work authorized aliens in lawful status.
"One has a moral responsibility to disobey unjust laws,” Martin Luther King Jr. once said. But what if there are two laws – one federal, and one state – that are on opposite sides of the legal spectrum? Which one is “unjust”? Which one should we “disobey”? That is the dilemma presently facing this nation where a majority of the states now permit the possession and use of marijuana for either recreational, or medical purposes; whereas, under federal law, it remains a crime.
It is no secret that working parents sometimes struggle to balance family obligations with work commitments. While federal law provides time off for working parents for the birth or adoption of a child, the time off is unpaid. U.S. laws have been slow to provide parents paid leave for the birth or adoption of a child; however, there is new hope. The first budget proposed by the current administration proposes paid parental leave for up to six weeks for mothers and fathers for the birth or adoption of a child. If adopted, this would be the first paid parental leave law in the United States. Even if the law is not passed, now is a good time to review your association’s policies to make your association attractive to working parents, as well as help improve productivity of current employees.
Can Your Journal Protect Its Peer Reviewers?
Although associations that publish scholarly journals rely on confidentiality to ensure the integrity of their peer review system, the law has yet to definitively protect peer reviewers' identities and comments. Here's a brief look at where the courts stand on the issue.
Now that China’s new overseas NGO law is in effect, nongovernmental organizations operating there have a new set of requirements to comply with. While many provisions of the law remain fuzzy, several first steps for associations have become clear.
A CEO's departure, whether planned or unexpected, inevitably disrupts the routine workings of staff and volunteer leaders. But the path to new executive leadership will be smoother if a solid succession plan is in place, addressing key legal issues from employment law and contracts to the board's role.
Even the best families have problems, and that reality extends to relationships between associations and their chapters. Although tensions can arise in a variety of areas, from governance to public policy, most can be cured with clear communication.
Yogi Berra once said, "If you don't know where you are going, you'll end up someplace else." While his words may seem misplaced, the sentiment is not: Everyone needs a plan. This principle applies not only to individuals, but perhaps more importantly, to organizations. Without it, employees do not have a definitive roadmap from their employer, articulating their true purpose and course, nor, consequently, do they know how their individual role contributes to the company's mission and performance.
2017 is sure to bring more changes on the political law front. In February, President Trump repeated his support for overturning the “Johnson Amendment” – a long-standing provision in the tax code that strictly prohibits churches and other Section 501(c)(3) charitable organizations from engaging in any political campaign activities. If the law is changed, individuals and organizations may be able to support entities engaging in political speech with tax deductible deductions. At the same time, the administration is also considering an executive order to loosen political restriction on churches. These changes could make religious organizations new vehicles for supporting and opposing candidates in 2018 and beyond.
What Do New Marijuana Laws Mean for the Workplace?
Federal law conflicts with some state laws regarding marijuana usage, so here's a cheat sheet for association HR departments wanting to comply.
Effective October 1, 2016, all employers in Montgomery County, Maryland with one or more employees are required to provide employees with paid sick and safe leave. All employees must earn one hour of paid leave for every 30 hours an employee works in Montgomery County, up to 56 hours a year. Employers with 5 or more employees must provide paid sick and safe leave; whereas, employers with less than 5 employees must provide 32 hours of paid sick and safe leave, as well as 24 hours of unpaid sick and safe leave per year.
Preventing and responding to cyberattacks has become one of an association's highest priorities. The first step is to understand the risks and then implement the policies and procedures you need to keep your data safe. Here's what the law requires.
Contracts are an integral part of operations, as associations regularly enter into contracts for leases, office equipment, independent contractor services, website design, hotel and convention centers, and many more. In some instances, the contract is a simple, straight-forward document that’s easy to understand and clearly sets forth the obligations of both parties. In other instances, the contract may be dozens of pages long and written in a way that leaves execs confused and uncertain. When faced with the latter scenario, it’s easy to assume that all the details discussed with the other party are represented in the contract.
Form 990-Schedule B: Can states demand your confidential donor information - even if they do not need and cannot protect this information?
In the case of California, a federal judge recently ruled NO! The Court held that requiring nonprofits to file their confidential Schedule B donor information in order to register to solicit contributions unduly burdened First Amendment rights and was unconstitutional “as-applied” to the organization that challenged this requirement.
When advising associations on employment policies, I’m often asked, “How long should the probationary period be?” My answer:“It really doesn’t matter,” followed by, “. . . so long as it is actually utilized.” Whether a probationary period is 30 days or 6 months, whatever period is adequate to demonstrate skill acquisition and work habits, the most important issue is whether the employer actually uses the time to review the work and make a reasoned go or no-go forward employment decision. Another comment I hear when defending termination cases is, “That employee should have been terminated long ago.” Typically, the deficiencies leading to termination were observed when the individual was a new employee. Often employers create probationary periods, yet fail to reap the intended benefit.
All employers are required to complete a Form I-9 for newly hired employees to verify the employee’s identity and eligibility to work in the United States. Failure to complete the Form I-9 can result in severe penalties against the employer. To help make this process more efficient, the United States Citizenship and Immigration Services (USCIS) has proposed a new “smart” version of the Form I-9 in an attempt to reduce user error and make the form easier to complete.
Act Now on Privacy and Cybersecurity Issues!
There is no question that the newest and biggest liability risk for associations arises from online activities. It’s not a question of ‘if’ your association will suffer a data security breach, but ‘when.’ Savvy association execs and operational professionals will get ready now for the inevitable breach – whether from a pernicious hack, phishing, or just a lost staff computer or personal device. In fact, the laws of several states – which apply if the association has personally identifiable information (“PII”) of any residents from those states – mandate that holders of such information have in effect a written information security plan/policy (“WISP”) to protect such information NOW!
On April 28th, 2016, the Standing Committee of the National People’s Congress (NPC) of the People’s Republic of China (PRC) approved the PRC Law on the Management of the Activities of Overseas NGOs within Mainland China. The NPC’s approval followed a third round of review and revision by the NPC Law Committee, which included substantial changes and clarifications compared to the second draft that was released in May 2015.
The proliferation of cellphones means that nonprofits can communicate with their members and donors anywhere, anytime. But the law protects consumers from unwanted "robocalls" and text messages on their mobile phones. Nonprofits need to know the rules before they implement a cellphone communication strategy.
The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) created the new IRS section 506. This section requires social welfare organizations (those claiming exemption under § 501(c)(4)) to provide notice to the IRS of their existence no later than 60 days after their formation.
The PATH Act requires social welfare organizations that were in existence on or before December 18, 2015 to notify the IRS of their existence by June 15, 2016 unless they had submitted an IRS Form 1024 or Form 990 prior to December 18, 2015.
From standing and ad hoc committees to task forces and advisory councils, a board accomplishes its work through a variety of smaller groups. Associations need to regularly evaluate their existing committee structure and be ready to adjust it based on the organization’s changing governance needs.
Proper classification of employees is critical to avoid potential liability for unpaid overtime.
If that did not get your attention, then consider this: In addition to unpaid overtime, misclassification of employees can result in liquidated damages, equitable relief, and reimbursement of attorneys' fees. Classification is particularly important now, in light of the proposed changes to the Fair Labor Standards Act.
Your association will be hacked. Are you ready?
You often hear lawyers talking about risk -- potential legal and other problems that can arise for an association. Well, there is one new risk that isn’t just a possibility: Your association will suffer a cybersecurity breach at some point in the future, and you’d better be ready.
More associations are instituting automatic membership dues renewal programs, where members’ credit cards are stored and charged periodically. While this payment structure is very appealing to many associations, certain legal issues should be carefully considered before proceeding.
Intellectual property is a crucial asset for any association. This includes content developed for members and constituents as well as the value associated with the association's brand and promotion of that brand. Intellectual property rights and laws vary by country, so it is important for all associations to take protective measures and learn the laws and regulations of their target markets before going global.
Many association employees may think that cybersecurity is a matter to be handled only by the IT staff. CFOs, however, know that nothing could be further from the truth as cybersecurity is not just an IT issue, it is also a money issue. For instance an association that falls victim to a cybersecurity breach may spend thousands of dollars to repair its compromised computer system, may expend significant funds providing notification to those whose information was released, and be forced to pay even larger sums of money to defend or settle law suits initiated by those whose personal information was compromised.
On September 8, 2015, the Department of Justice issued technical assistance on testing accommodations under the ADA. The document covers who is entitled to testing accommodations, what types of testing accommodations are required, what documentation may be required of the individual requesting the accommodations, prohibited flagging policies, and how test scores for those receiving accommodations should be reported.
The IRS recently issued a proposed regulation regarding the reporting of charitable donations. Under the current law, taxpayers who donate $250 or more to a charitable organization must obtain a written receipt from the charitable organization in order to claim a charitable deduction, and the receipt must contain specified information.
There have been several recent changes in D.C. significantly affecting wages, employer notice requirements, and records maintenance as well as changes providing more protection to pregnant employees.
Retirement programs for employees of tax exempt associations are similar in many ways to retirement programs sponsored by a for-profit business enterprise. Both types of organizations may offer generally all of their employees qualified retirement plans (401(k) plans for both, 403(b) plans only for tax exempts) and deferred compensation plans for a “select group of management or other highly compensated employees.” However, the tax treatment of deferred compensation arrangements is where the similarities between tax exempt and for-profit organizations end.
The work of certification organizations provides invaluable benefit to those they serve, as well as the general public, by helping to set performance and competency standards for those in specific professions and motivating certificants to increase their personal knowledge in a particular practice area. Unfortunately, the activity of certification organizations also puts them at considerable risk for legal claims due to the organization’s self-regulation of its constituents. This is especially true in the areas of antitrust and due process. Additionally, today’s business environment has become extremely litigious, and certification organizations are susceptible to defending against legal claims initiated by allegedly aggrieved employees or third parties that were harmed by one of the certification organization’s certificants. Because there is no way for certification organizations to prevent an employee or third party from suing the organization, these organizations must ensure they have the proper insurance to protect against liability for a wide variety of claims.
On March 24, 2015, the United States Court of Appeals for the Fourth Circuit issued a published opinion in Professional Massage Training Center, Incorporated (PMTC) v. Accreditation Alliance of Career Schools and Colleges, d/b/a Accrediting Commission of Career Schools and Colleges (ACCSC), in which PMTC filed a civil lawsuit against ACCSC for alleged violation of due process after ACCSC denied PMTC’s application to renew its accreditation. As further explained below, the Fourth Circuit’s ruling is significant for both accreditation and certification organizations, as it affirms judicial deference to decision making by credentialing bodies. The opinion is available online.
It’s not uncommon for an association’s corporate governance to become stale, a relic of the past, perhaps from the days of the association’s founding or from the last time the governance was overhauled two or three decades ago. The governance structure that was perfect for the association in the 1950’s or 1970’s is not necessarily the right one for 2014 or 2020. And yet many association leaders are reluctant to tackle corporate governance issues.
Over the last few years, cyber attacks on businesses have become a regular occurrence. The banking, retail, gaming and health care industries have all fallen victim to cyber attacks. The news media has been replete with stories about for-profit businesses experiencing security lapses or breaches by hackers, but nonprofit certification programs can also be targeted.
On an almost daily basis, we hear about a high profile company falling victim to a cyber-attack. While the news media has been replete with stories about high profile, for-profit businesses falling victim to computer hackers, nonprofit associations are now also a prime target for cyber criminals.
A Brief Overview of Maryland's New Law, "Charitable Enforcement and Protection of Charitable Assets"
In 2014, Title 6.5, entitled “Protection of Charitable Assets,” was added to the Business Regulation Article of the Annotated Code of Maryland. This new law went into effect on June 1, 2014.
The new title relates to “charitable assets” that are given, received or held for a “charitable purpose,” and both terms are defined broadly. The statute provides that the Maryland Attorney General represents the public with regard to the protection of charitable assets.
Beginning January 1, 2015, a nonprofit organization that was incorporated in California will no longer be able to have ex officio directors who do not have voting rights.
While it is tempting for a professional association to tell its members not to “poach” each others’ customers, doing so violates federal antitrust law.
Is Your Sick Leave Policy in Compliance with District of Columbia Law?
In November 2008, the District of Columbia enacted the Accrued Sick and Safe Leave Act of 2008 (“ASSLA”) which requires employers to provide paid sick leave to employees, as well as safe leave for absences related to domestic violence or sexual abuse. Effective March 2014, ASSLA was amended by the Earned Sick and Safe Leave Amendment Act of 2013 which broadens the employees covered under ASSLA, provides for additional recordkeeping, and includes stronger remedies for violations of the law.
Are You Complying with Canada's New Anti-Spam Rules?
The majority of Canada’s Anti-Spam Legislation (CASL) went into effect on July 1, 2014, and this has many U.S. associations and nonprofit organizations concerned. We are not Canadian lawyers, but we can tell you what we know about the new law.
Are Your Membership Benefits Cutting It?
Probably the vast majority of association membership benefits are the traditional ones – a publication of some sort, access to the association’s “members only” website, discounts on conference fees and purchases, access to group insurance programs, etc. While these benefits retain their popularity with some segments of association members, are they really useful – or even interesting – to your younger members?
Baby boomers filling association C-suite offices have begun to retire. We can expect an increasing wave of retirements in the next 10 years as boomers trade board meetings for club meetings and move on to the next phase of their lives. Is your association ready?
To minimize risk, the decision to terminate an employee requires consideration of multiple factors before action is taken.
The Americans with Disabilities Act of 1990 (ADA) makes it unlawful to discriminate against a qualified individual with a disability in any term or condition of employment, as well as retaliate against an individual for asserting his/her rights under the ADA. It is important to note the ADA does not prohibit an employer from hiring the most qualified candidate for a job; it only prohibits an employer from discriminating against a qualified applicant or candidate because of his/her disability. Below is a brief summary of what else associations should know about the ADA.
The Immigration Reform and Control Act of 1986, or “IRCA,” which made it unlawful for employers to hire or continue to employ persons not authorized for employment in the United States is approaching its thirtieth anniversary. The law imposed a requirement on virtually all private employers to verify that each newly hired employee is authorized to accept employment in the United States, and mandates completion of a Form I-9, together with a review of certain specified documentation verifying both identity and work authorization, within the first three days of the employee’s date of hire. Employers who fail to complete the forms, complete them halfway, or make mistakes in entering the required information potentially face civil penalties ranging from $250 to $1100 per violation.
Take-away: A decision by the United States Court of Appeals for the Third Circuit in mid-February is a reminder that failures in due process and fair reporting of association disciplinary matters may lead to legal liability.
The Supreme Court will hear a case this fall as to whether state licensing boards composed of regulated professionals are entitled to the ‘state action’ exception to the antitrust laws.
In recent years, the Antitrust Division of the Department of Justice and the Federal Trade Commission (FTC), the two federal agencies charged with antitrust enforcement, initiated very few enforcement actions involving associations. In 2009, however, the Obama Administration publically promised that the days of relaxed anti-trust enforcement were gone and that it would employ vigorous antitrust enforcement efforts as a necessary means of reviving the economy. Two key cases filed by the FTC against trade associations in 2013 show that the FTC is committed to upholding its enforcement promise and that associations are not exempt from enforcement action.
A new privacy code for apps tries to help consumers understand what is really happening with their data.
The National Telecommunications and Information Administration of the U.S. Department of Commerce announced a new Short Form Notice Code of Conduct to Promote Transparency in Mobile App Practices this summer, and industry groups are busy commenting on pros and cons. The code is voluntary, but would be applicable to apps that associations and nonprofits develop.
Association Chapter Insurance Policies: What Coverage Do You Need?
Co-Author: Jennifer Kirkpatrick Howard, a producer at Lockton Companies and a risk management consultant and insurance broker, jkhoward@lockton.com.
Choosing insurance coverage for a chapter or affiliate can be overwhelming. Here are a few tips to help you get started in figuring out what coverage is right for your chapters.
The Internal Revenue Service is now launching questionnaire projects to gather information about retirement plans, in addition to conducting random, full scope audits. What should you do if a questionnaire is received? First - do not ignore it and, second, ask your advisor to help with the responses. A proactive review of your retirement plans’ operations is never a bad idea.
Books, publications, websites, white papers, conference proceedings, magazines and newsletters constitute some of the most valuable property that associations have. These materials may be protected by the copyright laws, and it’s critical that associations maximize such protection. It’s important to make sure both that the organization owns or has adequate rights to use and publish any materials, and also that it has the ability to maintain control of them for purposes of ensuring their integrity and maximizing value to the organization.
When we think of trademarks, most consumers think of famous international brands, such as Coca-Cola, Nike and Apple. Trademarks, however, are not just for traditional “for-profit” corporations. Trademarks can be very important assets to associations and can have significant value in advancing their missions and raising funds. An association’s name, acronym and logo, among other things, can be used in a trademark sense and acquire protection as trademarks.
You may think that most cyberattacks happen to for-profit businesses and government agencies. But don’t be lulled into a false sense of security; when it comes to collecting and storing valuable data, many trade associations and nonprofits could give a like-sized corporation a run for its money.
The obligations imposed by the data breach laws enacted by almost every state and many foreign countries (particularly the European Union) and various federal privacy laws do not distinguish between for profit businesses and nonprofit organizations. Therefore, trade and professional associations must be vigilant to ensure compliance with these many laws and, when appropriate and necessary, implement a written information security program that includes appropriate technical, procedural and administrative safeguards for protecting private information.
Association executives should be aware of potential legal risks social media can pose for their associations.
DC nonprofit corporations formed prior to 1963 have a choice to remain under DC's old nonprofit corporation act or to come under the new act. If the entity wants clearer guidance on structure, then electing to come under the new act would be an appropriate decision. But if it prefers to stay under the old act, it must be careful to follow some new regulations or it will end up coming under the New Act.
Every association holds meetings, whether a small board meeting or a convention for thousands. Association executives responsible for meeting planning should be aware of some of the latest trends in negotiating hotel and convention contracts to protect their associations.
Associations with related foundations that are considered to be “supporting organizations” under Internal Revenue Code section 509(a)(3) should pay attention to a recent decision by the Internal Revenue Service. The IRS published the final and proposed regulations for supporting organizations on December 28, 2012 in T.D. 9605 - Payout Requirements for Type III Supporting Organizations That Are Not Functionally Integrated.
The federal Patient Protection and Affordable Care Act (“ACA”) enacted by Congress in 2010 will affect nonprofit organizations as much as for-profit companies. All nonprofits should determine if they are “large employers” and are subject to the penalties imposed by the ACA if their health plans fail to provide a minimum level of coverage to their full-time employees or if benefits offered are not “affordable.” On July 2, the Obama Administration announced it was delaying until January 1, 2015 the effective date of the employer mandate, which includes fines for employers who do not provide qualified and affordable health care and new reporting requirements.
The top 5 issues to address in an employment agreement will differ depending on whether you are the employee or the employer and the level of the employee within the organization.
In December 2012, the House Committee of Ethics (the "Committee") issued new regulations governing privately funded, officially connected travel by House Members, officers and employees. These new travel rules are not only applicable to House members and staff, but are also applicable to outside sponsors, including nonprofit organizations and associations.
If a nonprofit organization asks its conference or meeting speaker to use social media to promote the organization’s event, the Federal Trade Commission’s "Guides Concerning the Use of Endorsements and Testimonials in Advertising" may require the speaker to disclose his or her relationship with the organization.
The Group Ruling Questionnaire - What is it and what does it mean to your organization?
First of all, if your organization has no affiliates, you can skip this article entirely.
For the rest of you, especially those whose affiliates operate under a Group Exemption: You may have already received from the IRS a "Group Ruling Questionnaire" (GRQ). The IRS began sending them out at the end of 2012 to several thousand tax-exempt organizations that had obtained a Group Exemption for their subsidiary organizations. The purpose of the GRQ is to help the IRS develop new regulations applicable to parent organizations to assure tax compliance and timely filing of IRS Form 990s by subsidiaries.
Whether buying new hardware, upgrading software or implementing a million-dollar association management system solution, at some point each association is going to confront a technology contract. And whether you are drafting your own agreement or, more typically, starting with the vendor’s form of contract, there are certain key legal provisions the management of every association should consider before signing on the dotted line.
Is Your Organization Required to Pay DC Use Tax?
We have been contacted by clients who are confused by the new District of Columbia 2013 Budget Support Act and its requirement that DC employers file an annual use tax return if they are not currently filing a sales tax return. This article is intended to answer some of the questions your organization might have about the DC use tax.
Are Associations and Nonprofit Organizations the Next Big Target for Cyber Attacks?
Like most people in our tech-inundated world, you might be a bit numb to seemingly daily reports that yet another organization has been hacked. But, as an executive or employee of a nonprofit organization or association, you may have taken notice and some comfort in the fact that the lion’s share of those attacks appear to have been perpetrated on for-profit businesses and government agencies, like Sony, Citibank, Lockheed Martin, ADP, the FBI and the CIA.
Association Social Media -- Is Permission Required To Post User Content?
As user-generated content becomes a growing source of information on the Internet, associations should be mindful of the potential legal problems that relate to using user-generated content. For example, if John Smith posts comments on an association’s website or social media page, can an association use John Smith’s comments in the association’s newsletter without contacting John Smith for permission?
“Intellectual property (IP), in the form of copyrights, trademarks, lists of members, attendees, exhibitors, and others are often an association’s most valuable property. And in this modern internet era, everything is electronic, so understanding and implementing the rules, best practices, and protections for IP of nonprofit organizations and associations is critical. We thought it was timely to help associations protect their IP by giving them a clear, concrete reference book to turn to,” says the co-author of the just published Intellectual Property for Nonprofit Organizations and Associations, Jefferson Glassie.
Jeff and his co-authors Eileen Johnson and Dana Lynch are attorneys with the boutique law firm, Whiteford, Taylor, and Preston, in Washington, DC.
The new guidance from the Equal Employment Opportunity Commission, the first update on the issue in more than 20 years, clarifies when and how an employer may consider job candidates' past arrest and conviction records without violating federal discrimination law.
What’s the difference between a volunteer who delivers Meals on Wheels and wouldn’t dream of getting paid, as opposed to an intern who might in fact be deemed an employee and have to be paid? It’s not easy to tell.
Many nonprofit Section 501(c)(6) organizations set up separate foundations to carry on certain charitable or educational activities for the parent organization. We have helped many nonprofit organizations set up subsidiary foundations--this is very common and can enhance the activities and fundraising options for the parent organization. Provided below is background information on setting up a foundation.
Is Your Publication's Ad Revenue Taxable?
Publications that generate "circulation income," such as subscription payments, and net income from advertisements can be an important source of revenue for a tax-exempt organization. Revenues from circulation income generally are not subject to federal income tax, but net advertising income generally is taxable as unrelated business income.
Board Meeting Minutes -- Best Not To Get Too Wordy!
Many association executives have asked questions about the proper scope and content of board meetings. It’s important to keep minutes in accordance with legal and organizational governance best practices. Here are some thoughts about keeping board meeting minutes.
A recent case may cause people to think twice before agreeing to serve on the board of a Maryland corporation.
Nonprofit organizations and associations may be feeling a little more loved by the custodians of their retirement plan assets and third party administrators lately, if “love” means how many communications you’re getting about the upcoming deadline for fee and investment disclosures.
As computer technology continues to make rapid advances, the issue of what constitutes an appropriate accommodation for test-takers under Title III of the ADA is being re-examined by the courts. Specifically, in the case of Enyart v. National Conference of Bar Examiners, Inc., the U.S. Court of Appeals for the Ninth Circuit ruled that accommodations should be evaluated under a “best ensure” standard, rather than a reasonable/effective standard.
Could Your Association’s Chapter Program Be Considered a Franchise System?
In Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, Inc., 646 F.3d 983 (7th Cir. 2011), the U.S. Court of Appeals for Illinois, Indiana and Wisconsin held that the national Girl Scouts organization, a nonprofit incorporated by an Act of Congress, violated the Wisconsin Fair Dealership Law by dissolving a local Wisconsin chapter of the national organization “without good cause.” The 2011 decision is notable both because of its author, the extremely well-known, respected and conservative Judge Richard Posner, and because of the language used by the Court in rejecting the Girl Scouts of the United States’ arguments for immunity based on its nonprofit mission. This article is designed to help the leaders of nonprofit organizations and associations identify ways to mitigate risks posed by this decision.
The IRS recently announced that its modernized e-file system will not be available from January 1, 2012 through February 29, 2012 for electronic filing of Forms 990, 990-EZ, 990-PF and 1120-POL information returns. The system will not be available during this time period so that certain changes can be made to IRS systems for the 2011 tax year. However, the 990-N e-postcard filing system will not be affected by this temporary suspension.
Legal audits provide a good opportunity for nonprofit organizations and associations to prevent unexpected liability by addressing and resolving problematic issues before they escalate. Risks of liability are a serious concern for nonprofit organizations and associations. A legal audit is particularly important if the association or nonprofit organization has recently undergone a change in management, so that preexisting problems are not attributed to the new leadership.
What is the work-for-hire doctrine, and how does it apply to associations?
The work-for-hire doctrine is a statutory provision under the Federal Copyright Act that acts to transfer copyright ownership in certain cases. However, the doctrine is often misunderstood.
When working with a consultant, always hope and plan for the best but prepare for the worst by drafting a solid consulting contract. A good contract will clearly set forth the expectations of each party, milestones, payments and expenses, and other significant terms. The following do’s and don’ts for drafting consulting contracts will improve the likelihood that you will have a good working relationship with your consultant and that the results of the collaboration will meet your association’s needs.
Nonprofit corporations incorporated in or registered to do business in the District of Columbia will have a new law to contend with starting on January 1, 2012. Although the new nonprofit law offers some benefits, it is more verbose, more complicated, and less user-friendly than the current law.
Employers can save money on past payroll taxes and “get right” with the IRS under new program.
The Internal Revenue Service has implemented a new program that will allow employers, including tax-exempt organizations, to resolve past worker classification issues by voluntarily reclassifying workers as employees. The IRS’s Voluntary Classification Settlement Program is primarily intended to increase tax compliance, but the Program will also have the effect of minimizing the reporting and financial burden on employers, as well as providing certainty for employers, workers, and the government regarding worker classification. The Program will allow employers the opportunity to come into compliance by making a payment covering past payroll tax obligations.
There is no denying that social media’s importance to organizations, including nonprofit organizations and associations, is growing exponentially. Blogs, Listservs, YouTube.com, and social networks like Twitter and Facebook offer nonprofits a range of benefits, enabling them to market themselves in new ways, disseminate their messages and missions, educate users, connect with other nonprofits, recruit volunteers, solicit donations, and increase audience interaction. These benefits, however, come with certain risks.
The United States imposes embargoes against several countries, including most prominently Cuba, Iran, Sudan, and Burma. These sanctions programs, administered by the Office of Foreign Assets Control (OFAC), are very broad and essentially prohibit any business dealings by U.S. persons and organizations with those countries, though the Cuban sanctions are the most restrictive. There is, however, a general exception under the law for transmission of information, which applies to many nonprofit organization and association activities.
D.C.’s federal appellate court recently affirmed a trial court’s decision that a Section 501(c)(3) Maryland nonstock corporation did not qualify as a public charity under Section 509(a)(3) of the Internal Revenue Code because the foundation’s “supported organizations” were not identified sufficiently.
My association is considering launching a job board. What potential legal issues should I be concerned about?
This resource is provided for informational and reference purposes only and should not be construed as legal advice. Specific legal questions regarding this information should be addressed by your organization’s legal counsel.
Although a compensation committee or the executive committee may be delegated the authority to set the CEO's compensation, the entire board should be involved in the CEO's annual review. A consultant can be helpful in determining what questions to ask and in gathering the responses and facilitating communication between the board and the CEO.
This tool can be used to assess current strengths and weaknesses of an existing board or used to evaluate a pool of potential board candidates. With some modification, it can also be used as a tool to track the experience and diversity of existing board members on an individual basis.
This checklist is designed to assist boards in reviewing their activities to ensure that they are focusing on governance and not management.
Compensation Committees: Does Your Organization Need a Compensation Committee?
This resource is provided for informational and reference purposes only and should not be construed as legal advice. Specific legal questions regarding this information should be addressed by your organization's legal counsel.
Often board members find themselves on a nonprofit board of directors with no guidance as to what their role is or the organization's expectations of them. This "job description" is actually advice for new board members of nonprofit organizations. Following this advice can lead to a more successful board, a more successful organization and a more enjoyable experience for the new board member.
How Simple is that Simple Retirement Plan, Really?
A Brief Overview of Maryland's New Law, "Charitable Enforcement & Protection of Charitable Assets"
Do You Have Time For Twice As Much Work?
Which Form 990 Should My Organization File?
Is a Merger a Good Idea for Our Association?
Retirement Plans 2009 -- Are You Ready For Compliance?
Does Your Organization Need A Compensation Committee?
Payout Of Accrued But Unused Leave At Termination: The Rules Change -- Yet Again!
What Does the Legislative Horizon Hold for Tax-Exempt Entities?
Are Charitable Giving Tax Incentives and Reforms a Possibility This Year?
The Whiteford Nonprofit Law Group invites you to join us for good wine, food and live music by our lawyers, including Eric Schlam and Jeff Glassie.
Whiteford Taylor & Preston LLP announced today that Kellie L. Newton has joined the firm as a Partner in its Washington, D.C., office. An accomplished corporate attorney, Ms. Newton has a sophisticated practice representing nonprofit organizations and privately held companies.
Whiteford, Taylor & Preston LLP announced today that Erika E. Cole, a preeminent non-profit organization attorney with a significant reputation among churches and faith-based organizations, has joined the firm as a Partner as of July 1, 2017. Mrs. Cole is one of only a handful of attorneys in the U.S. practicing exclusively in the area of church law. Over the course of the past 12 years, she has built a national reputation as The Church Attorney®.
ASAE has announced that Eileen Morgan Johnson, Partner at Whiteford, Taylor & Preston LLP has earned the Certified Association Executive (CAE®) designation. The CAE is the highest professional credential in the association industry.
On October 29, Jeff Glassie received the 2015 volunteer service award from the Institute for Credentialing Excellence (ICE) at its annual educational conference in Portland, Oregon. The award is given annually to an individual who has displayed exemplary service and commitment to the organization, who has been instrumental in facilitating the achievement of the organization’s goals, and who has demonstrated a history of volunteer service in ICE.
Whiteford, Taylor & Preston is pleased to announce that Dorothy Deng and Megan Spratt were awarded certificates in recognition and completion of the ASAE University Certificate Program in Association Management.
The ASAE Foundation is collaborating with Green Seal and Whiteford, Taylor & Preston LLP to pilot an innovative Association Office Greening Program that will award up to 15 grants for workplace sustainability reviews. Applications are due August 15. The program is spearheaded and funded by a $25,000 grant from the law firm Whiteford, Taylor & Preston LLP.
Whiteford Taylor & Preston is delighted to announce that Jefferson Glassie, co-chair of the firm’s Nonprofit Organizations & Associations practice, has been named an ASAE Fellow, one of only 250 in the nation. This recognition is bestowed on leaders in the field, in light of their “innovation, leadership and commitment to the profession,” and is indeed a signal honor.
Whiteford, Taylor & Preston lawyers have written a new book titled Intellectual Property for Nonprofit Organizations and Associations, which is now the definitive publication in the field.
Jeff Glassie, Eileen Morgan Johnson, and Dana Lynch, partners with WTP, are co-editors of the new book, published by the American Society of Association Executives and released at the ASAE convention in Dallas, August 11-15, 2012.
Whiteford Taylor & Preston announced today that Jeffrey P. Altman and Eric M. Altman have joined the firm’s Nonprofit Organizations and Associations group in the Washington, D.C., office.
Whiteford, Taylor & Preston is delighted to announce that Jefferson C. Glassie has joined the firm’s Nonprofit Organizations Group as a partner. He is based in the firm’s Washington office and will Co-Chair the firm’s nonprofit practice. Accompanying him in his move to the firm is an associate, Megan Spratt.
Whiteford, Taylor & Preston LLP (WTP) is delighted to announce the hiring of attorneys from O’Brien, Butler, McConihe & Schaefer, PLLC for its Nonprofits Organizations Group in D.C. – Jerome C. Schaefer, Steven P. Benson, and Stephen M. Schaefer.
Whiteford, Taylor & Preston (WTP) is pleased to announce that Eileen Morgan Johnson has joined the firm as Counsel in the Nonprofit Organizations Group. Ms. Johnson will be based in the D.C. office.

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