JULY 2018

STATE LAW

Arizona

Grand Canyon University has grown by leaps and bounds. It is in the suburbs of the Phoenix area. Originally, it was a nonprofit educational facility but later changed to become a for-profit institution. As the University has expanded, the cost of being a for-profit school became overwhelming. As a result, the school has once again filed and obtained nonprofit status.

Commentary: One of the key elements of such a decision is the issue of real estate tax. By being a tax exempt organization, the University can avoid the payment of same.

Source: https://www.azcentral.com/story/news/local/arizona-education/2018/07/02/grand-canyon-university-regains-its-non-profit-status/747376002/

Florida

According to a report in the Palm Beach Post, nearly all of the $706,000 in donations made by the Donald J. Trump Foundation in the County went to charities that hosted fundraisers at Mar-a-Lago.

Source: https://www.mypalmbeachpost.com/news/national-govt--politics/trump-foundation-donated-charities-that-booked-galas-mar-lago/mfh5YFm3bK8iUOVQ8UnXKN/

Hawaii

Hawaii’s Attorney General’s office has fined two nonprofit organizations over $135,000 for alleged violations of the state’s charitable solicitation laws. Firefighters Emergency Fund has been fined $23,000 for allowing the named president to also work as the executive director, while The Law Enforcement Community Foundation was fined $111,000 for failing to properly register as a nonprofit fundraiser and not filing financial reports.

Source: http://www.hawaiinewsnow.com/story/38626787/nonprofits-fined-more-than-135k

Massachusetts

One of the oldest fundraisers in our country reached record results. According to published reports by The Associated Press, the Boston Marathon raised more than $36 million for charity.

Commentary: The event was started as a fundraiser for The Boys Club in Boston. My! How it has grown.

Source: https://boston.cbslocal.com/2018/07/10/boston-marathon-raises-record-36-6-million-for-charity/

Minnesota

Catholic Charities of the Diocese of St. Cloud filed a civil complaint asking the diocese of St. Cloud to be directed to transfer ownership of the St. Cloud Children’s Home and surrounding property to the charity, “in accordance with the commitments made by the Diocese nearly four years ago.” The complaint also asks that the Diocese be required to reimburse the charity for its investment in the property.

Source: https://www.sctimes.com/story/news/local/2018/07/02/catholic-charities-files-civil-complaint-against-diocese/752516002/

Missouri

The nonprofit that supported now ex-governor Eric Greitens could face millions of dollars in civil penalties if the Missouri Ethics Commission substantiates a complaint filed by a state lawmaker who investigated the former governor.

Source: https://www.news-leader.com/story/news/politics/2018/06/25/eric-greitens-nonprofit-called-criminal-enterprise-investigation-ends/731114002/

Nebraska

A nearly two-year-long investigation into the practices of Goodwill Industries and Goodwill Specialty Services came to a close with the filing of a Consent Judgment. According to the Press Release of the Office of the Attorney General, the Consent Judgment contains a number of actions that Goodwill Omaha will be required to take in order to address the concerns expressed by the Office of the Attorney General throughout its investigation.

Source: https://ago.nebraska.gov/sites/ago.nebraska.gov/files/doc/2018.06.26%20Goodwill%20Exec%20Summary%20%26%20Report.pdf

INTERNATIONAL LAW

Australia

Charities registered in the country have been declared exempt from the Supervisory Cost Recovery Act 2017, which would have charged charities $321 per year in administrative costs.

Commentary: This means that registering charities in Australia will not be subject to any kind of registration or filing fee.

Source: https://probonoaustralia.com.au/news/2018/07/charities-secure-asic-exemption/

OTHER MATTERS

FTC Multi-State Announcement

On July 19, 2018 the Federal Trade Commission, along with virtually all the states, announced a new coordinated initiative captioned “Operation Donate with Honor” that targeted fundraisers and veteran organizations that allegedly engaged in fraudulent activity or failed to comply with other state laws. As a result of the action, a large number of organizations have been prohibited from fundraising and, in some cases, have been dissolved. For more detailed information, visit the FTC’s website.

Source:  https://www.ftc.gov/news-events/blogs/business-blog/2018/07/operation-donate-honor-law-enforcers-unite-challenge

New Tax Coming!

The Tax Reform Act that brought tax relief to so many is bringing a potential new tax to tax-exempt organizations that provide fringe benefits to their employees. Certain benefits like parking and free meals will now be taxed at the rate of 21%.

Commentary: As you might expect, there are many in the industry who are first finding out about this new tax and are not happy. An effort is being made to stop the implementation of this provision that apparently passed unnoticed by many of our legislators.

Source: https://surlysubgroup.com/2018/01/08/nonprofits-must-pay-ubit-on-some-fringe-benefits-now/