Does the hiring of undocumented workers pose an exemption threat?

From what I have been able to find I would still say no. I have emailed others more knowledgeable than I and will let you know if they say different.

UPDATE - what they have said:
In theory, it should not be a threat to the exemption. However, this will depend on several factors, namely,

1. The type of exemption. A church will have a better stance than say a hospital.
2. The facts. Did the organization know they were employing an undocumented individual? What did they do about it when they found out?
3. How was it discovered? By the IRS, the organization, who?
4. Do they continue to break the law? Continued disregard for the law may jeopardize the exemption.
   

Contributions that are conditional

A questions was asked at a recent Boot Camp about conditional contributions. A condition is effectively a barrier that must be overcome before a promised gift becomes a contribution. A part of the definition of a contribution is that it is an unconditional promise to transfer assets to a nonprofit.

The question went along the lines of "is a contribution conditional if the promised contribution is not paid until the end of the year and the work is completed." - If I got this wrong please let me know. What you could have here is an exchange transaction, and not technically a contribution.

But assuming it is a contribution you can recognize the revenue in two ways depending on the donor/grantor's instructions. The first would be piecemeal. As you do a portion of the work a portion of the condition of the contribution is met and therefore you can count it as revenue and a receivable. So as you do the work, you recognize a bit of the grant at a time. The second would be to recognize it all at once after the work is done. Once the work is done (the condition is met) then you have a contribution and book the receivable.

When you get the actual cash does not factor into the discussion in any case, just when you get conformation from the donor that at some point you will be getting the cash.

Hope that helps

CA Attorney General

Who regulates charities in California? The state AG's office. Click the above link to find out all the resources they have to help you stay compliant. If someone wants to complain about your charity, this is where they will go.

"Publicly Supported"

"Publicly Supported"
Definition of what the IRS calls public support, important for maintaining your 501c3 status. Publication 557 (link in the article here and over to the right in the IRS section) goes into more details about this.

Some answers to questions posed at the Eureka boot camp

Q: Why is the Chart of Accounts numbered?

A: To make it easier to index and catalogue your chart items and when you had to do accounting on ledger sheets by hand it was easier to write 2010 that “accounts receivable – grants receivable” in the little green spaces.

Q: Is a PSA donated air time or contractual obligation?

A: From what I have been able to dig up it is a donation even though they are required to make the time available.

Q: Specifics for letter to a donor, what the nonprofit gives them.

A: See the link in the IRS section to the right labeled, “Contributions Guidelines for Donors.”

Q: A nonprofit gives money to a community foundation to create an endowment. Is that money permanently restricted?

A: From what I have found it all depends on how you create it. Can you revoke the “gift” to yourself? I would guess that the money would be treated as permanently restricted until the nonprofit changes the status. It is different to me than a board designated fund always being considered unrestricted because in the above question you are giving control of the money to another organization.

Q: How to book membership income when the “membership” is actually a donation?

A: If your group solicits membership as a way of soliciting donations but no real value is exchanged for the membership, that membership is considered a donation and entered on your books as such. If the “member” gets a tote bag or equivalent item with their membership the value of that is deducted from the contribution and put into the earned income section.

Q: Are volunteers reported under a nonprofit’s worker compensation insurance?

A: By law, workers' compensation benefits for volunteers are not required. A volunteer who does not receive compensation for his or her work is not entitled to workers' compensation benefits, unless the agency for which the volunteer works chooses to provide these benefits (See Labor Code Section 3363.5).

I don’t claim to have all the right answers listed, just what I have been able to find through my research. Anyone have any different ones? Post them in the comments please!

Life Cycle of a Public Charity

The IRS has a nice section on its site that details what most charities will go through and what they will have to do. Compensation issues, records retention, what does a donor get, a lot of good information can be found here.

Intermediate Sanctions

A PDF that talks about them and what constitutes excess benefits and compensation.

New link

I added a new link in the IRS section that tells almost all one needs to know about how to value a donated item, lots of questions came up about that and who should do what. I hope it helps.

Valuation of Professional Services

A recent email from a Eureka attendee asked if there was any government publication that lists what you would value donated professional services. The link to Independent Sector's site shows a general value for volunteer time and also links back to the Bureau of Labor Statistics that lists hourly rates for various occupations.

The best way to value any donated service though is to get an invoice from the donor stating their hourly rate and the value of the service given to you.