EO Radio Show

Welcome to EO Radio Show – Your Nonprofit Legal Resource. A really hot topic this week is the duty of care for directors and trustees of charities in a time of volatility in the investment markets in general, and turmoil, or even fear of turmoil in their banking institutions. I'm not an investment advisor, and I can't and don't tell my clients where they should bank or what they should invest in. I can tell them the standard of care that they are held to in their roles as directors or trustees of a charity.

In this episode, I'll talk about the standard of care for investment decisions and some practical things that charity fiduciaries can do to take good care of the charitable funds entrusted to them.

Resources:

Uniform Prudent Management of Institutional Funds Act (UPMIFA)

"UPMIFA, Three Years Later: What's a Prudent Director To Do?" ABA Business Law Today, Volume 18 No. 6 (July/August 2009), Cynthia R. Rowland

EO Radio Show EP #16: Basics of Impact Investing: A Conversation About Investment Policies and Evaluation Metrics For ESG Investors

If you have suggestions for topics you would like us to discuss, please email us at [email protected].

Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.

Welcome to EO Radio Show – Your Nonprofit Legal Resource. This episode is the third in a series discussing insider transactions by exempt organizations. In this episode, we'll look closely at best practices for approving insider compensation decisions made by public charities and private foundations.

In episode 32, I gave a general overview of the federal laws regulating the transaction of business between a tax-exempt organization and its insiders. Insiders include directors, trustees, certain executives, substantial contributors, entities controlled by directors or substantial contributors, and their family members.

In episode 33, we took a deeper dive into conflict of interest policies and considerations in deciding which insiders need to comply with the organization's annual conflict of interest disclosure procedures.

Resources:

IRS Resources on Rebuttable Presumption for Compensation

IRS form 4720 and Instructions

IRS Schedule J, Compensation Information (Form 990)

EO Radio Show EP #2: Nonprofit Basics: Designators, Members, Directors, Officers: The Who's Who of Nonprofit Governance

EO Radio Show EP #5:Nonprofit Basics: Navigating the Complex Rules That Describe A Public Charity

EO Radio Show EP #32: Nonprofit Basics: Insider Transactions and Nonprofits – What's the Big Deal?

EO Radio Show EP #33: Nonprofit Basics: Conflict of Interest Policies and Best Practices for Approving Insider Compensation

If you have suggestions for topics you would like us to discuss, please email us at [email protected].

Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.

Welcome to EO Radio Show – Your Nonprofit Legal Resource. This episode is the second in a series discussing insider transactions. In episode 32, I gave a general overview of the federal laws regulating the transaction of business between a nonprofit and its insiders, which includes directors, trustees, certain executives, substantial contributors, and entities controlled by directors or substantial contributors and their family members.

Today, I take a deeper dive into conflict of interest policies and considerations relevant to deciding which insiders need to respond to the organization's annual conflict of interest diligence procedures. In a later episode, we'll look closely at compensation decisions in particular.

Resources:

IRS Resources on Rebuttable Presumption for Compensation

IRS Form 4720 and Instructions

IRS Sample COI Policy

IRS Instructions for Form 1023 Exemption Application

EO Radio Show EP. 5: Nonprofit Basics: Navigating the Complex Rules That Describe A Public Charity

EO Radio Show EP. 21: Loot and Private Foundation Rules – Part 1

EO Radio Show EP. 22: Loot and Private Foundation Rules - Part 2

EO Radio Show EP #32: Nonprofit Basics: Insider Transactions and Nonprofits – What's the Big Deal?

If you have suggestions for topics you would like us to discuss, please email us at [email protected].

Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion

Welcome to EO Radio Show – Your Nonprofit Legal Resource. This is the first in a series of episodes covering the federal and state laws that apply to business transactions between a nonprofit and its insiders such as directors, executives, substantial contributors, and entities controlled by them.

In this episode, I provide a general overview of the federal laws. I talk about the rules that cover financial transactions that nonprofit directors, trustees, and executives should address carefully before they occur, and the penalties and other adverse consequences to an organization and its managers and insiders who violate these laws.

In the next few episodes, I'll cover the related topics of conflict of interest policies and best practices for approving insider compensation.

Resources:

IRS Resources on Rebuttable Presumption for Compensation

IRS Form 4720 and Instructions

California Form RRF-1 and Instructions

EO Radio Show EP. 5: Nonprofit Basics: Navigating the Complex Rules That Describe A Public Charity

EO Radio Show EP. 21: Loot and Private Foundation Rules – Part 1

EO Radio Show EP. 22: Loot and Private Foundation Rules - Part 2

If you have suggestions for topics you would like us to discuss, please email us at [email protected]

Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.

Welcome to EO Radio Show – Your Nonprofit Legal Resource. In this episode, I expand on an important concept that often comes up for private foundations when addressing the rules that require use of a minimum amount each year for charitable purposes. This is known in the industry as the minimum distribution requirement.

In the last episode, I talked about the general rules for computing a foundation's distributable amount for the year, which is equal to the foundation's minimum investment return with a number of adjustments. Today, we take a closer look at how to satisfy the minimum distribution rules by setting aside funds for a future purpose, and I'll tell you a true story of a private foundation's amazing resilience in using the set-aside rules in the face of regulatory roadblocks.

Resources:

IRS Form 8940 and Instructions (for requesting a set-aside ruling)

Compliance Guide for 501(c)(3) Private Foundations

IRS Summary of Minimum Distribution Rules

EO Radio Show #30: Nonprofit Basics: Private Foundation Minimum Distribution Requirements

EO Radio Show EP #18: Nonprofit Basics: Operating Foundation Rules

Private Letter Ruling 202302014

Taxes on Failure to Distribute Income - Private Foundations

If you have suggestions for topics you would like us to discuss, please email us at [email protected].

Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.

Welcome to EO Radio Show – Your Nonprofit Legal Resource. Private foundations are required to spend a minimum amount each year for charitable purposes, which is known in the industry as the minimum distribution requirement. Like all other private foundation rules, there are a lot of exceptions and special rules. I'm not going to cover all the rules exhaustively in this episode, but listen in for an overview of the rules and resources for learning more about the topic.

Resources:

Compliance Guide for 501(c)(3) Private Foundations

IRS website summary of minimum distribution rules

EO Radio Show EP 18: Nonprofit Basics: Operating Foundation Rules

EO Radio Show EP 23: Nonprofit Basics: Supporting Organizations - Part 1

EO Radio Show EP 24: Nonprofit Basics: Supporting Organizations Part 2 - Orientation for Understanding Type III Supporting Organizations

Notice 2006-109

IRS 2022-2023 Priority Guidance Plan

If you have suggestions for topics you would like us to discuss, please email us at [email protected].

Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.

Welcome to EO Radio Show – Your Nonprofit Legal Resource. Have you ever heard the phrase, "you'll have to exercise expenditure responsibility as a condition for giving or receiving a grant," and then decided to just go do something else? It's too hard, too complicated, gets IRS scrutiny, just too scary. Expenditure responsibility, or "ER" as the foundation world refers to it, won't send you to the ER but it can be bewildering and confusing until you've been on the giving or receiving end a few times. But it is really not that complicated. In this episode, I'll explain what it is, why and when it applies, and how to comply with the requirements.

Resources:

IRC Section 4945(h) – Expenditure Responsibility

EO Radio Show EP 1: Nonprofit Basics: Overview of Nonprofit Charitable Organization Types: Corporation, LLC, Trust, Association and Fiscal Sponsorship

EO Radio Show EP 5: Nonprofit Basics: Navigating the Complex Rules That Describe A Public Charity

EO Radio Show EP 18: Nonprofit Basics: Operating Foundation Rules

If you have suggestions for topics you would like us to discuss, please email us at [email protected].

Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.

Welcome to EO Radio Show – Your Nonprofit Legal Resource. Every January brings a slew of new laws that take effect at the federal and state level, and it seems that there are always new laws that affect the employer-employee relationship.

Our legal topic for today covers the new pay transparency law that applies to California employers. Even if you are not in California, these rules may be of interest since the Golden State often leads the nation on the legal front.

Join me for a great conversation with Farella Braun + Martel employment law partner Chandra Andrade.

Resources

Chandra S. Andrade Bio

California Pay Data Reporting: Frequently Asked Questions

SB 1162 Employment: Salaries and Wages

New Laws and Compliance Updates for California Employers in 2023

California's Pay Transparency Act (SB 1162) – Are You Prepared?

If you have suggestions for topics you would like us to discuss, please email us at [email protected].

Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.

Welcome to EO Radio Show – Your Nonprofit Legal Resource. I'm happy to have my colleague Nate Garhart back for a discussion on privacy laws and how they affect website content development, as well as online activities by nonprofits.

We'll start our conversation with some basic background on when a nonprofit needs a privacy policy on its website and how to think about what should be posted on the website, and where.

Resources and notes:

Nate Garhart bio

Farella Privacy Blog

General Data Protection Regulation (GDPR)

California Consumer Privacy Act (CCPA)

EO Radio Show #26: Nonprofit Websites and Terms of Use - Best Practices and Common Pitfalls

EO Radio Show #20: Copyright Issues for Nonprofits

EO Radio Show #12: Hot Topics: Risk Management for Cybersecurity

1) Are all "nonprofits" exempt from the CCPA?

The CCPA applies to any "business," which it defines as a legal entity that is organized or operated for the profit or financial benefit of its shareholders or other owners." Generally, this would seem to exclude all nonprofits, but there have been arguments trying to include mutual benefit corporations. We have not seen any attempt to enforce the CCPA against a nonprofit of any kind to date. But, as discussed in this podcast episode, that doesn't mean nonprofits should ignore the CCPA. A nonprofit could be subject to the requirements of the CCPA through contract, through receiving personal information from a for-profit subsidiary or parent of the nonprofit, or by entering into a joint venture with a for-profit company. At any rate, whether a company is subject to the CCPA is not determined by its tax status, so the fact that a company is tax-exempt is not the end of the discussion.

2) Would the trading of email lists between two nonprofits amount to the "selling" of personal information under the CCPA?

The short answer is yes. "Selling" as defined by the CCPA includes any transfer of personal information to a third party for valuable consideration. The swapping of email lists would seem to qualify. But since nonprofits are generally not subject to the CCPA, it is unlikely such a trade would require the entity to employ a "Do Not Sell" button as would be required of a for-profit entity that similarly traded email lists.

If you have suggestions for topics you would like us to discuss, please email us at [email protected].

Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.

Welcome to EO Radio Show – Your Nonprofit Legal Resource. Happy New Year, everyone! Today I talk with Farella's Nate Garhart about websites and terms of use and the legal concepts relevant to nonprofits that have interactive websites. We'll cover best practices as well as common pitfalls to avoid.

Resources:

EO Radio Show #20: Copyright Issues for Nonprofits

US Copyright Office

Nate Garhart bio

Farella Privacy Blog

If you have suggestions for topics you would like us to discuss, please email us at [email protected].

Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.