Friday, March 23, 2012

Nonprofit To Bring North Korean Orchestra To U.S.

In what would represent a significant diplomatic development, an Atlanta, Ga.-based nonprofit is planning to bring North Korea's national orchestra for a tour of the U.S.

The Associated Press (AP) reported that the North Korean Symphony Orchestra will start the tour with a concert in Atlanta, the home of Global Resource Service (GRS), a humanitarian nonprofit that works in the secluded country. GRS hopes the concert will begin in the spring, but details, including government approval, are still left to be resolved.

The deal comes at a time when relations between the U.S. and North Korea are warming, but still fragile. The country's long time leader, Kim Jong Il, died in December, which created hope among some aid groups that relations would improve. This seemed to be confirmed when North Korea agreed last month to stop its nuclear activities and allow U.N. inspections to resume in exchange for food aid. However, recent plans by the country to launch a satellite have renewed tensions.

You can read the full article in the AP.

Thursday, March 22, 2012

Group Behind Controversial Calendar Shuts Down

A Denver, Co.-based organization has agreed to cease its operations after reaching a settlement with the state over whether the group was really a nonprofit.

Fired Up For Kids would transfer all of its assets to a new group, according to a report on The group got in hot water with Colorado's Office of the Attorney General over its sale of firefighter calendars. It's website stated that all proceeds from the calendars would go to The Children's Hospital Burn Center, and it's pamphlets presented Fired Up For Kids as a nonprofit.

The Attorney General's office saw things much differently.

In December 2011, the state filed a lawsuit against Fired Up For Kids alleging the group operated as a for-profit business despite the fact that it had registered as a nonprofit. Prosecutors also accused the organization's owner, Kirsten Hamling, of using company accounts and assets for personal uses, including airline tickets and gym memberships. Hamling defended herself after the lawsuit was fired, saying that the donations to the hospital were voluntary and that she was "in no way contractually obligated" to give money to the hospital.

In the end, it appears Hamling decided it was a better course to settle rather than fight the lawsuit.

Assets for the now dissolved Fired Up For Kids will go to a new organization, Colorado Firefighter Calendar, Inc. Proceeds from the calendar will still go to the Children's Hospital Burn Center, in addition to promoting fire safety and awareness.

You can read the full story on

Activities Excluded From UBIT

As a nonprofit manager, you've probably heard of the term unrelated business income tax (UBIT) and, chances are, you aren't too fond of it. We have some good news for you: There are plenty of activities that are excluded from UBIT!

Here's a quick recap of the rule: According to Marci Thomas, CPA, MHA, and Kim Strom-Gottfried, Ph.D. in their book "The Best of Boards," UBIT applies to any income from a trade or business that is carried on regularly by a nonprofit when the purpose of the activity is not related to the mission. Even if the net proceeds from the activity will be used to further the nonprofit’s mission, it is still subject to UBIT.

Now on to the good news. There are at least five activities that are excluded from UBI taxes. Thomas and Strom-Gottfried list them as:
  • Volunteer work force. If the activity is conducted with volunteers, then the income is not UBI even if the business is regularly carried on and not related to the organization’s tax-exempt purpose.
  • Convenience of members. If the activity is operated for the convenience of members, students, patients, officers, or employees it is not UBI.
  • Sponsorship payments. When a nonprofit receives a payment from a sponsor and the only benefit the sponsor gets is the inclusion of his or her company’s name or logo or use of products.
  • Selling donated merchandise. When substantially all of the merchandise being sold in a business activity is donated.
  • Telephone Pole rental. Pole rentals are not considered unrelated trade or business when rented by a mutual or cooperative telephone or electric company described in section 501(c) (12).

Wednesday, March 21, 2012

Lollapalooza Deal Puts Nonprofit At Risk

Lollapalooza is one of the most popular music festivals in the world but it's making one Chicago, Ill.-based nonprofit sing the blues.

The Washington Post reported today that a deal struck with Lollapalooza promoters has put the future of the Chicago Park District's nonprofit arm, the Parkways Foundation, at risk. The foundation  received 45 percent of its revenue from Lollapalooza. This stands to change after C3 Presents, the Austin, Tex.-based promoter of the festival, agreed for the first time to pay annual city and county amusement taxes and liquor taxes. The new deal also extends the festival's stay in Chicago's Grant Park through 2021. The Foundation's second largest contributions come in the form of grants and donations from private corporations such as the Kraft Foods Foundation.

At past festivals, C3 would make contributions to the Parkways Foundation in lieu of taxes. Now that they have agreed to pay these taxes, those contributions will no longer exist. The loss of this significant revenue caused the nonprofit to discuss its options. One of those options, according to The Washington Post, is whether the organization should continue to exist.

The Parkways Foundation took in $2.6 million from Lollapalooza last year, but it also experience significant loss of personnel. Ten people have left the board since 2010, and longtime executive director Brenda Palm left in December. Jay Terry has filled that position since her departure.

Lollapalooza, which has included groups from Nine Inch Nails to Kanye West, has made its home in Chicago since 2005. It was originally formed in 1991 by Jane's Addiction singer Perry Farrell as a farewell tour for his band.

You can read the full article in The Washington Post.

Former Nonprofit Exec Dies After Indictment

A former chief financial officer (CFO) of an Austin, Tex.-based nonprofit died only days after she was indicted for theft.

According to The American-StatesmanMary Ann Hernandez, 58, was charged with funneling more than $100,000 from Austin Resource Center for Independent Living Inc (ARCIL) to her personal credit card accounts from 2005 to 2009. She was arrested hours after her indictment on March 1 and was released after posting $250,000 bail. Authorities said she died on March 6. The cause of her death is unknown pending the results of an autopsy.

The indictment charged Hernandez of two felonies: One count of misapplication of fiduciary property with a value of $100,000 or more but less than $200,000 and another count of theft of $200,000 or more but less than $100,000. These all stemmed from accusations that, between March 2, 2005, and Jan. 30, 2009, she allegedly transferred checks from ARCIL's Bank of America account to make payments on her Visa credit card accounts.

The investigation of Hernandez started after the state auditor's office was contacted by the Department of Housing and Community Affairs, which had contracted with ACRIL from 2005 to 2009 to provide rental assistance to disabled people. The accusations against Hernandez were also reported in an earlier edition of NPTtv.

With their only suspect now gone, prosecutors are discussing whether to dismiss the case. Jason Knutson, an assistant district attorney with the state's Public Integrity Unit, told The American-Statesman that she was in charge of all the money as CFO, so they have no reason to believe anybody else was involved.

You can read the full story in The American-Statesman.

Tuesday, March 20, 2012

Nonprofit Recruiting Tips

Nonprofits have plenty of options when choosing where to recruit new employees. The most popular choice these days is online job boards.

Most employers choose to use the Internet for their recruiting because it's easier and it allows them to reach a wider audience. With the rising popularity of social networks, recruiters have even more tools at their disposal. While the Internet is definitely a great tool to use, it's important to remember there are other options at your disposal.

In their book "The Big Book of HR," Barbara Mitchell and Cornelia Gamlem remind nonprofits of the following recruiting methods to use in addition to the Internet:

  • Former Employees: Employees don't always leave their former workplaces on bad terms. If your organization has a good exit interview process, you should be able to determine which individuals left amicably, and whether you would want to bring them back.
  • Retirees: It is becoming increasingly difficult for retirees to live without some income. Consider bringing some of these individuals back to do special projects.
  • Radio/TV Ads: If you have enough room in your budget, take out an ad on the radio or TV to invite job seekers to your career website.
  • State Employment Offices: All states have offices where you can list open positions. These agencies do a great job of linking job seekers to open positions, so don’t discount the amount of help you can get from them.

Community Garden Looks For Life After Nonprofit Funding

A Charlottesville, Va. community farm is trying to survive after losing funding from a nonprofit.

C-Ville reported today that the Urban Agricultural Collective of Charlottesville (UACC) had to learn quickly about the finer arts of fundraising and budget management after it lost the funding of Quality Community Council (QCC) during the fall of 2011. The nonprofit ultimately decided the farm was successful enough to stand on its own after five years of funding.

The farm's project director, Todd Neimeier, quickly formed an advisory board of community members to help determine the farm's next step. That turned out to be a partnership with Virginia Organizing, a nonprofit that serves as a fiscal agent for around 40 groups in the state. The partnership will result in the organization accepting grants and donations on behalf of the UCC. This will allow the farm to focus on its mission without having to worry about the financial aspects.

Neimeier is not just relying on the help of Virginia Organizing. UACC started a grassroots fundraising campaign to get donations from individuals in the community. The farm will also receive one final act of good will from QCC. In exchange for UACC helping out with some deliverables, the nonprofit will assist with  funding for this year's budget. Neimeier told C-Ville this was a "lifesaver" for the farm which he hopes will carry it through a good portion of the year.

You can read the full story in C-Ville.

Monday, March 19, 2012

Some Nonprofits Drowning In Water Fees

Nonprofits don't pay property taxes but, as The NonProfit Times explained, they often end up paying money to the government anyway. This come in the form of payments in lieu of taxes (PILOTs).

Newsmax reported today on one such PILOT that is being debated in an Oregon court. Some cities are starting to charge nonprofits and churches double for their water bills. This is the case in Canyonville, Ore., where a city ordinance states that nonprofits, churches, and schools will be charged this amount in lieu of taxes. The city of Canyonville boasts that its residents pay less for water than neighboring towns.

Canyonville Christian Academy (CCA), established in 1924, told Newsmax that the extra charges for water date back nearly 30 years, totaling about $200,000. The law is written to cover all nonprofits that use water, but CCA believes that the regulations targeted 10 churches and four Christian schools. CCA informed the school of what they considered to be improper billing in June, but they said nothing was done to solve the problem. The school offered to resolved the issue on Oct. 19, 2011 by taking a small amount of the surcharges of the last six years in the form of credits on future bills. That offer was rejected.

Believing the law to be unconstitutional, CCA appealed to the Douglas County Circuit Court in Roseburg, Ore. to give a ruling on the matter. If the court rules in the school's favor, it could potentially trigger similar lawsuits in the future.

You can read the full story in Newsmax.

Oregon Nonprofit Could Help School's Turf

Two Millard, Neb. high schools are reaching out to boosters and donors to get the aid of a Salem, Ore.-based nonprofit that would help fund the cost of artificial turf for their fields.

The Omaha World-Herald reported today that the nonprofit, the Community Sports Development Council (CSDC), has been involved with a number of development projects for sports facilities and parks. It also uses the same material used in artificial turf in the locality of Millard North and Millard West High Schools, which are both trying to get turf fields.

The agreement with CSDC calls for $350,000, and the schools got a big initial boost when they received $50,000 from the Millard Public Schools Foundation, which is contingent on the two schools raising the rest of the money. All donations would go through an account set up with the nonprofit Mustang Booster Club, which will make them tax deductible. The cost of the project for each school would be more than $1 million, though CSDC has agreed to cover $700,000 of that. The deadline to raise the money is April 13.

Chad Zimmerman, assistant principal and athletic director at Millard North, told The Omaha World-Herald that he is optimistic they will meet their fundraising goal. His school has already received interest from potential donors: A baseball group has pledged a "substantial" amount of money, while a donor with ties to a football program is willing to match all donations.

The help from CSDC was needed because a $140.8 million bond issue was rejected by the city last November. One in four residents who voted against it did so because they were opposed to turf fields, according to The Omaha World-Herald. The bond issue, which was voted down 57 to 43 percent, would have funded school repairs, classroom additions, and technology and security upgrades in addition to the turf field, which accounted for 2 percent of the bond.

You can read the full story in The Omaha World-Herald.