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Top 15 Non-Profit Board Governance Mistakes Failing to Understand Fiduciary Duties. Failing to Provide Effective Oversight. Deference to the Executive Committee, Board Chair, or the Organizations Founder. Micro-managing Staff. Avoiding The Hard Questions. Insufficient Conflict Management.
To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.
Here are six things to watch out for: Private benefit. Nonprofits are not allowed to urge their members to support or oppose legislation. Political campaign activity. Unrelated business income. Annual reporting obligation. Operate in with stated nonprofit purposes.
The Secretary of State regulates charitable organizations operating within the state. All charitable organizations are required to register with the Secretary of State unless exempted by law.
It is important to remember that political activity campaigning in favor or against a candidate is strictly prohibited for a charity. A violation of the IRS regulations may result in an organization losing its tax-exempt status or having to pay excise taxes on the money improperly spent.
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Exemption requirements - 501(c)(3) organizations To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.
The basic rule can be stated simply, but its calculation is complex: Each year every private foundation must make eligible charitable expenditures that equal or exceed approximately 5 percent of the value of its endowment.

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