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Q&A #32 – Should I incorporate my nonprofit in Delaware?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #32 – Should I incorporate my nonprofit in Delaware?

It is a very common assumption that all corporations should be formed in Delaware. However, Delaware’s reputation as being the ideal state of incorporation comes from the world of for-profit corporations and has little relevance to nonprofits. Delaware holds no particular advantages for nonprofit corporations, so my rule of thumb is that you should generally incorporate where you foresee the organization carrying out most of its programs and activities, except in special circumstances.

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It is Time to Be Proactive With Your Office Lease Situation
Articles A. Michael Gellman (CPA, CGMA) Articles A. Michael Gellman (CPA, CGMA)

It is Time to Be Proactive With Your Office Lease Situation

A familiar scenario has played out month after month for many nonprofit organizations during this prolonged period of financial uncertainty, remote work, and virtual programs and meetings. The time has come again to pay another month’s rent for your headquarters office. Frustrated that your office space is going mostly unused, you cut the check and feel like this is a wasted expense. While it is easy to feel helpless in this situation, it is time to start the proactive planning process and take control. There are only no options when you have convinced yourself there are no options.

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Q&A #31 – Should a nonprofit scrap and replace a strategic plan adopted prior to the pandemic?
Q&A A. Michael Gellman (CPA, CGMA) Q&A A. Michael Gellman (CPA, CGMA)

Q&A #31 – Should a nonprofit scrap and replace a strategic plan adopted prior to the pandemic?

Although this sounds counter-intuitive, as of now the answer is no. The world around us is still changing in unexpected ways with unprecedented volatility. Nonprofits are continuing to learn to pivot and adapt to new approaches. The best way to measure performance and outcomes and communicate on management’s actions taken is to compare results and changes to your old strategic plan.

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The Finance Calendar: An Essential Tool that is Useful to All
Articles A. Michael Gellman (CPA, CGMA) Articles A. Michael Gellman (CPA, CGMA)

The Finance Calendar: An Essential Tool that is Useful to All

I need to be more grateful for my “over-worked” and “under-appreciated” finance calendar. In my experience, nonprofit organizations gain comfort from its content and a sense of order and completeness from its structure, as do their many end-users, both inside and outside of the organization.

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Q&A #30 – Can a 501(c)(3) organization engage in advocacy related to state ballot initiatives?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #30 – Can a 501(c)(3) organization engage in advocacy related to state ballot initiatives?

Assuming your organization is a 501(c)(3) public charity (rather than a private foundation) you are generally free to engage in advocacy related to state ballot initiatives, up to certain limits. This is because advocacy related to referenda, ballot initiatives, constitutional amendments, and similar procedures is generally considered a form of “lobbying” on legislation, rather than a political campaign activity.

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Planning Considerations Before Launching a Capital Campaign or Building a New Endowment Fund [SUBSCRIBERS-ONLY]
Subscribers-Only, Articles A. Michael Gellman (CPA, CGMA) Subscribers-Only, Articles A. Michael Gellman (CPA, CGMA)

Planning Considerations Before Launching a Capital Campaign or Building a New Endowment Fund [SUBSCRIBERS-ONLY]

Having a vision for the future with aspirations for growth and new major efforts is exciting and can spark energy and enhance a culture of vitality for your organization. Capital campaigns and building an endowment fund can be game-changing tactics, but they come with a whole new set of challenges and risks. It is easy to get excited about these types of funding but hard to have success, especially for nonprofits who have no experience raising these kinds of funds and managing their use.

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Q&A #29 – Can the executive officer of a 501(c)(3) organization express personal opinions about the election without endangering the organization’s tax-exempt status?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #29 – Can the executive officer of a 501(c)(3) organization express personal opinions about the election without endangering the organization’s tax-exempt status?

Yes, it is your right as an individual to speak about the election in your personal capacity, and the Internal Revenue Code prohibition against political campaign intervention by 501(c)(3) organizations is “not intended to restrict the free expression on political matters by leaders of organizations speaking for themselves, as individuals” (see IRS Rev. Rul. 2007-41). However, you will need to be careful to avoid speaking in a way that could be attributed to the organization.

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Planning for the Next Annual Budget Cycle: Where Do You Start?[SUBSCRIBERS-ONLY]
Subscribers-Only, Articles A. Michael Gellman (CPA, CGMA) Subscribers-Only, Articles A. Michael Gellman (CPA, CGMA)

Planning for the Next Annual Budget Cycle: Where Do You Start?[SUBSCRIBERS-ONLY]

Compiling the annual budget for the next fiscal year is always a challenge and requires as much pre-planning as possible. During periods of unpredictable volatility, we need to get started early and consider new strategies we might not have used in the past. Top-down budgeting and stress testing your funding sources might be the best way to get started on next year’s budget.

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Q&A #28 – Can a 501(c)(3) organization engage in public advocacy related to Supreme Court appointments?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #28 – Can a 501(c)(3) organization engage in public advocacy related to Supreme Court appointments?

The answer is generally yes, 501(c)(3) organizations are allowed to advocate for or against the appointment of Supreme Court Justices. However, you must be very careful in your communications not to cross the line into endorsing or opposing a candidate for public office in the process. This can be tricky because the line between permissible and prohibited activity is very hazy.

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You Cannot Let Your Guard Down When It Comes to Cyber Security and Fraud [SUBSCRIBERS-ONLY]
Subscribers-Only, Articles A. Michael Gellman (CPA, CGMA) Subscribers-Only, Articles A. Michael Gellman (CPA, CGMA)

You Cannot Let Your Guard Down When It Comes to Cyber Security and Fraud [SUBSCRIBERS-ONLY]

Attempted fraud and cyber security breaches are increasing. At the same time, distractions from our chaotic world and new operational realities are averting our attention. This is a bad mix. We need to double-down on efforts to protect our organizations. Reputations and sustainability are at risk, and navigating these threats is even harder during a time of crisis.

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Q&A #27 – Can a 501(c)(3) organization have a political candidate speak at its virtual conference?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #27 – Can a 501(c)(3) organization have a political candidate speak at its virtual conference?

The safest approach for a 501(c)(3) organization is to avoid having political candidates (or their staffers/surrogates) speak at any organization event, whether virtual or in-person, particularly when the event is so close to an election. There are certain circumstances where this could be allowed, but these circumstances are limited and always subject to a “facts and circumstances” gray area.

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The Personal Liability Risks of Nonprofit Board Service
Articles Benjamin Takis Articles Benjamin Takis

The Personal Liability Risks of Nonprofit Board Service

Serving on the Board of Directors of a nonprofit organization can be a rewarding experience that offers the chance to give back to a meaningful cause while providing a learning experience and opportunities to deepen one’s connections and stature within the community. However, this positive experience comes with a level of personal liability exposure under certain circumstances.

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It’s Never Too Early to Start the Process of Finding the Right Treasurer
Articles A. Michael Gellman (CPA, CGMA) Articles A. Michael Gellman (CPA, CGMA)

It’s Never Too Early to Start the Process of Finding the Right Treasurer

All officer positions on the Board are important. Finding the right experience, diversity, and balance matched to your organization’s evolving needs are key drivers of performance and sustainability. However, the position of Treasurer is special and requires a unique skillset. Thus, starting the process of finding the right Treasurer early and thoughtfully will benefit your organization substantially.

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Q&A #26 – Should a nonprofit keep track of donated services?
Q&A A. Michael Gellman (CPA, CGMA) Q&A A. Michael Gellman (CPA, CGMA)

Q&A #26 – Should a nonprofit keep track of donated services?

The answer is always yes, keeping track of donated services is very important. You are correct that the Form 990 does not allow inclusion of in-kind gifts of services (only in-kind gifts of goods). Nonetheless, tracking and recording in-kind gifts of services will have significant benefits for your organization.

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Q&A #25 – What’s the difference between a merger and a transfer of assets?
Q&A Benjamin Takis Q&A Benjamin Takis

Q&A #25 – What’s the difference between a merger and a transfer of assets?

The key difference is that a merger generally means that the “surviving” organization takes on all of the assets and liabilities of the organization that it is absorbing, while a transfer of assets can be structured so that the surviving organization receives only the assets that it wants, without the transferor organization’s other liabilities (except for liabilities that are attached to the specific assets that are transferred, such as a transfer of real estate that is subject to a mortgage).

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