Posted on Apr 8, 2016
How to create/authorize a new 501(c)3 designation for Fully UNPAID Volunteer staffed organizations?
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Protection of Donors to 501(c)3 & Unpaid Volunteering
We have all heard the stories about non-profits with executives getting well paid, much of the staff attending luxury meetings and team building events. We have seen a few big name organizations that wondered astray. Sad to see when their mission statement was so good.
Some of the problems could be attributed to expensive salaries. Often these salaries came when large amount of funds are acquired due to high paid, or commission based professional fundraisers. Often these organizations have few unpaid volunteers and run with a business focus vice a charity focus.
There are indicators that high salaries are in a charity. It is required to be listed in the annual IRS
Form 990, Return of Organization Exempt from Income Tax. They will often have glossy fundraising materials that will be mailed to you.
"IRS Form 990, Part VII, requires the listing of the organization's current or former officers, directors, trustees, key employees, and highest compensated employees, and current independent contractors, and reporting of certain compensation information relating to such persons." This is where charity watching organizions pull the data to report to donators. The indicators and information is open to public inspection in many cases.
RECOMMENDATIONS to Protect Against Charity Fraud
1. The IRS 990-N is form required for small tax-exempts that have annual receipts lower than $50,000. (See text box below.) These charities have minimal reporting requirements but also have minimal funds coming in. Often they are better focused on their charity mission, and are run by unpaid volunteers. This can be an indication of a fraud free organization.
2. Contact your Congressional Members to create a 501(c)3 focused on unpaid volunteer management. This could be designated as 501(c)3-VOL. It could have the same requirements for an IRS 990-N form with an addition of certifying that “All personnel are unpaid volunteers.” This would go a long way to protecting charity donors.
Annual Electronic Filing Requirement for Small Exempt Organizations — Form 990-N (e-Postcard)
Who must file
Most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less can satisfy their annual reporting requirement by electronically submitting Form 990-N if they choose not to file Form 990 or Form 990-EZ instead.
Exceptions to this requirement include:
· Organizations that are included in a group return,
· Churches, their integrated auxiliaries, and conventions or associations of churches, and
· Organizations required to file a different return
Protection of Donors to 501(c)3 & Unpaid Volunteering
We have all heard the stories about non-profits with executives getting well paid, much of the staff attending luxury meetings and team building events. We have seen a few big name organizations that wondered astray. Sad to see when their mission statement was so good.
Some of the problems could be attributed to expensive salaries. Often these salaries came when large amount of funds are acquired due to high paid, or commission based professional fundraisers. Often these organizations have few unpaid volunteers and run with a business focus vice a charity focus.
There are indicators that high salaries are in a charity. It is required to be listed in the annual IRS
Form 990, Return of Organization Exempt from Income Tax. They will often have glossy fundraising materials that will be mailed to you.
"IRS Form 990, Part VII, requires the listing of the organization's current or former officers, directors, trustees, key employees, and highest compensated employees, and current independent contractors, and reporting of certain compensation information relating to such persons." This is where charity watching organizions pull the data to report to donators. The indicators and information is open to public inspection in many cases.
RECOMMENDATIONS to Protect Against Charity Fraud
1. The IRS 990-N is form required for small tax-exempts that have annual receipts lower than $50,000. (See text box below.) These charities have minimal reporting requirements but also have minimal funds coming in. Often they are better focused on their charity mission, and are run by unpaid volunteers. This can be an indication of a fraud free organization.
2. Contact your Congressional Members to create a 501(c)3 focused on unpaid volunteer management. This could be designated as 501(c)3-VOL. It could have the same requirements for an IRS 990-N form with an addition of certifying that “All personnel are unpaid volunteers.” This would go a long way to protecting charity donors.
Annual Electronic Filing Requirement for Small Exempt Organizations — Form 990-N (e-Postcard)
Who must file
Most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less can satisfy their annual reporting requirement by electronically submitting Form 990-N if they choose not to file Form 990 or Form 990-EZ instead.
Exceptions to this requirement include:
· Organizations that are included in a group return,
· Churches, their integrated auxiliaries, and conventions or associations of churches, and
· Organizations required to file a different return
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