NOVEMBER 2023 DWTM COUNTDOWN
Five Things You Should Know About the difference between a private foundation and a public charity?
- Every section 501(c)(3) organization is classified as either a private foundation or a public charity. Private foundations and public charities are distinguished primarily by the level of public involvement in their activities.
- Public charities generally receive a greater portion of their financial support from the general public or governmental units, and have greater interaction with the public.
- A private foundation, on the other hand, is typically controlled by members of a family or by a small group of individuals, and derives much of its support from a small number of sources and from investment income.
- Because they are less open to public scrutiny, private foundations are subject to various operating restrictions and to excise taxes for failure to comply with those restrictions.
- Under the tax law, a section 501(c)(3) organization is presumed to be a private foundation unless it requests, and qualifies for, a ruling or determination as a public charity.
Four Things You Should Know About a Quid Pro Quo Contribution
- A quid pro quo contribution is a payment a donor makes to a charity partly as a contribution and partly for goods or services.
- If a donor gives a charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. In this example, the charitable contribution part of the payment is $60.
- Even though the deductible part of the payment in the above example is not more than $75, a disclosure statement must be provided by the organization to the donor because the donor's payment (quid pro quo contribution) is more than $75.
- Failure to make the required disclosure may result in a penaltyto the organization.
Three Provisions You Should Include in Your Board Member Agreement
- A clear statement regarding what is expected regarding attendance at board meetings.
- A clear statement regarding what is expected regarding minimum financial contributions.
- A clear statement regarding your expectations regarding confidentiality.
Two Things You Should Do at the Conclusion of Every Board Meeting
- Thank the board members for their attendance.
- Remind your board members of the important role they play in fulfilling your charitable purpose.
One Thing I Know For Sure…
The more you practice the art of thankfulness, the more you have to be thankful for.” — Norman Vincent Peale