For-profit subsidiaries of not-for-profit organizations are strikingly diverse. Consider these real-life examples: In one part of the country, a not-for-profit health maintenance organization (HMO) creates a for-profit subsidiary to offer health insurance unavailable through HMOs.
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A contribution to a charity isn't always a tax-deductible contribution for the donor, as in the case of "quid pro quo" donations. This exchange of one thing for another happens when a charity receives a payment that includes a contribution and, in return, provides the donor with goods or services valued for less than the total payment.
It's no secret that the number of not-for-profit organizations is growing while the number of grant dollars is shrinking. Shifting from competing for grant funds to cooperating with other organizations can create substantial value for not-for-profits and the people they serve.
As your not-for-profit strives to use its resources as effectively as possible, you might at some point consider outsourcing the functions that fall under your accounting and financial umbrella. But wait: You'll need to weigh the pros and cons before making this important decision.
Employer-sponsored plans play an increasingly significant role in retirement planning as individuals worry about the future of Social Security and their ability to finance the kind of retirement they envision. They also help employers attract and retain better employees, cutting the costs of having to find and train new hires.
Rules known as "intermediate sanctions" allow the IRS to assess penalties against not-for-profit executives who receive excess compensation -- and the board members who have approved it. Do you and your board know what's considered excess compensation and what's viewed as a conflict of interest during the compensation-setting process?
It's an age of personal responsibility and legal liability can cause financial ruin for your organization's officers and board members.
Not-for-profit organizaitons that file IRS Form 990 must indicate the number of independent voting members or directors of the governing body. (This is entered on Parts 1 and VI.) The IRS is not the only group interested in these facts.