Private Foundation or Public Charity: Why it’s important and how to comply

Anita L. Pelletier
Anita L. Pelletier | Nixon Peabody LLP

I focus my practice on assisting nonprofit clients to operate as effectively and efficiently as possible.

Live Video-Broadcast: March 22, 2024
Private Foundation or Public Charity: Why it’s important and how to comply

$195.00 2 hour CLE

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Program Summary

Receiving tax-exempt status under Code Section 501(c)(3) is an important part to begin operations as a charity. With that IRS determination, however, there is another classification that can impact ongoing operations. Is the organization a private foundation or public charity This program will discuss these different classifications including the rules and restrictions that apply to private foundation; the different types of public charities; and key facts to keep in mind for ongoing compliance. The attorney will come away with a practical understanding of these classifications and how they can impact the ongoing operations of a charity.

Key topics to be discussed:

  • Review the provisions under the Internal Revenue Code relating to private foundation and public charity classifications
  • Discuss how to calculate the mathematical public charity tests
  • Identify challenges to ongoing qualification as a public charity

Date / Time: March 22, 2024

  • 1:00 pm – 3:10 pm Eastern
  • 12:00 pm – 2:10 pm Central
  • 11:00 am – 1:10 pm Mountain
  • 10:00 am – 12:10 pm Pacific

Closed-captioning available

Speakers

Anita-Pelletier_Nixon-Peabody_myLawCLEAnita L. Pelletier | Nixon Peabody LLP

I focus my practice on assisting nonprofit clients to operate as effectively and efficiently as possible.

NONPROFIT CORPORATE GOVERNANCE AND BOARD DISPUTES

With the increased level of scrutiny and transparency requirements from the IRS, state charity regulators, and the public, it is more important than ever that nonprofit organizations ensure their governance and operations are legally compliant. I’ve helped organizations ranging from the very small to the very large update bylaws and policies to comply with legal requirements and best practices.

TAX COMPLIANCE AND AUDITS

Both the IRS and many state charity regulators are using analytics to identify areas of potential noncompliance to start audits and investigations of nonprofit organizations. Many of these are targeted to specific areas, and it is important to have a plan in place to identify what the regulator is looking for and the best way to respond. I’ve worked with many organizations to guide them through these audits and investigations. Most recently, I assisted a nonprofit to respond to an IRS inquiry questioning whether the organization’s activities were charitable and an organization to respond to noncompliance allegations by a state charity regulator in connection with the receipt of a charitable bequest.

REORGANIZATIONS, MERGERS, DISSOLUTIONS, AND SALE OF ASSETS

The current climate for nonprofits is unprecedented. Efficient and effective operations are more important than ever. Many nonprofits are working to leverage current assets and seek strategic alliances to ensure continued operations to assist the most vulnerable in society. I’ve worked with many nonprofits to successfully sell assets and navigate mergers and dissolutions, including working through state charity-approval processes, which have become subject to increased scrutiny. Most recently, my work in this area included assisting nonprofit housing organizations sell or refinance housing projects and advising on the merger and sale of assets by health care and nursing home nonprofit organizations.

CHARITABLE SOLICITATIONS AND SALES PROMOTIONS

I’ve assisted numerous charities navigate the various rules regarding charitable solicitations in a market that necessitates the use of social media and electronic communications.

I’ve also represented businesses using promotions to develop brand recognition and sales. Last year, we helped a business develop best practices for operating a national sweepstakes and contests.

Agenda

I. Review the provisions under the Internal Revenue Code relating to private foundation and public charity classifications | 1:00pm – 1:45pm

II. Discuss how to calculate the mathematical public charity tests (part I) | 1:45pm – 2:00pm

Break | 2:00pm – 2:10pm

III. Discuss how to calculate the mathematical public charity tests (part II) | 2:10pm – 2:40pm

IV. Identify challenges to ongoing qualification as a public charity | 2:40pm – 3:10pm