Nonprofit Tweets of the Week – 10/21/16

Register to Vote Election

This week was marked by the final debate between the two major Presidential candidates. Have a listen to The Gregory Brothers and Weird Al Yankovic perform Bad Hombres, Nasty Women: The Presidential Debate in Song while perusing our curated nonprofit tweets of the week:

  • Nonprofit Times: “It’s that kind of collaboration that makes these investigations possible.” #nonprofit #NASCO #philanthropy [Ed. The NAAG/NASCO Conference was held this week with Monday being the day the public was invited to this important conference of state charity officials from across the country.]
  • Vu: Collective impact: Voltron Vs. The Borg
  • NPR: The Clinton Foundation & the Trump Foundation have become political targets — but they have very little in common. NPR
  • FastCoExist: “Big bet” philanthropy can pay off remarkably, but remember it’s a bet
  • La Piana Consulting: New on our blog: @AnneWallestad shares insights on the future of board leadership  @BoardSource @MakmoodyNOLA
  • Nonprofit Times: In nonprofit mergers, leaders must pay attention to cultural alignment, pre-merger + during integration process –
  • Social Innovation: What does it mean to merge nonprofit organizations out of strength rather than weakness? Ideas from @shirleysagawa
  • Philanthropy: In opinion: Why we should urge the next president to create an office for nonprofits
  • Gene: Free Market Philanthropy: GoFundMe Is Changing The Way People Give To Causes Big And Small Forbes #crowdfunding
  • Alliance for Justice: #Debate started with #SCOTUS and didn’t end there- the Court affects nearly every aspect of our lives  #AFJDebates



2016 National Conference on Philanthropic Planning

Dallas City skyline at dusk, Texas, USA


The 2016 National Conference on Philanthropic Planning (NCPP) Conference in Dallas taking place from October 17 to 19 features several notable speakers including our own Brigit Kavanagh, who will be co-presenting a session on Why Donor Advised Funds and Supporting Organizations are a Gift Planner’s Friend with Wendy Chou, senior philanthropic advisor with The Oregon Community Foundation.

Donor advised funds and supporting organizations are increasingly familiar features in philanthropic planning, presenting an opportunity for gift planners to think creatively about ways these vehicles can be mutually beneficial to donors and charities alike. Using a series of case studies, the presenters will demonstrate how donors are using donor advised funds and supporting organizations to achieve their philanthropic objectives, dispel some myths about these giving vehicles, and discuss ways that gift planners can work with donors to secure gifts from donor advised funds and supporting organizations.

Over 40 speaker papers are offered at this year’s conference. A sample of last year’s papers are available for download on the NCPP site. On-site registration is available on Monday, October 17, starting at noon at the Sheraton Dallas.


Nonprofit Tweets of the Week – 10/14/16


The past week, I flew to New York City to see my mother, Suki Takagi (see her story here), receive the Lifetime Achievement Award from Intercoiffure, a 501(c)(6) nonprofit and arguably the most influential organization in the hair dressing industry. Have a listen to Lady Gaga‘s Hair while perusing our curated nonprofit tweets of the week:

  • Rick Hasen: #ELB: “Assigning a Tax Lesson: The Relationship between the Trump Foundation and Trump’s Tax Returns” Election Law Blog
  • Nonprofit Quarterly: #Nonprofits should share this new study with their #boards & have a discussion! NPQ
  • National Council of Nonprofits: Is your #nonprofit using consent agendas? Be aware how NOT to use them Scroll to bottom #TransparencyTues
  • Gene: Good Example of Problematic Fiduciary Issues in Related Boards NPQ
  • Center for Effective Philanthropy: If an evaluation was commissioned but never shared, did it really exist?
  • Lucy Bernholz: A challenge for philanthropy, inspired by the Trump and Clinton Foundations  Nonprofit Chronicles via @MarcGunther
  • Emmett Carson: Tech Wonders and Dilemmas Explored at Innovation Conference via @Philanthropy
  • Skoll Foundation: How does a social entrepreneur build a successful coalition? #socent
  • The First Lady: “I’ve had to learn that my voice has value. And if I don’t use it, what’s the point of being in the room?” —The First Lady #DayoftheGirl
  • Perlman & Perlman: The First IPO of a Benefit Corporation – Will Laureate Turn the Tide?

Nonprofit Radio: Unpaid Interns


I’ll be on Nonprofit Radio this Friday at 10:00 am PT / 1:00 pm ET discussing with host Tony Martignetti what nonprofits need to know about unpaid interns and recent developments in the law. Catch us live on Talking Alternative or a few days later on iTunes.


Many nonprofits (and for-profits) make use of unpaid interns without an understanding of the laws designed to ensure workers’ rights. Organizations cannot simply hire and not pay “interns” if these individuals would legally fall within the definition of employees. Employees have certain rights, including the right to a minimum wage. Unfortunately, the laws in this area have been confusing to understand and subject to changes based on certain court cases. And there have been major changes in the past couple of years nonprofits that hire unpaid interns should be aware of.

Past Guidance (from a previous blog post)

Volunteer, Intern or Employee?

At first blush, it might seem simple to distinguish between a volunteer and an employee. But such distinction gets much more difficult to make when an organization pays a “stipend” to the volunteer. If the stipend is compensation for services, the paid individual may not be a volunteer and, if the payment is for regularly rendered services, may be an employee. Improper classification can raise many of the same issues described above for improperly classifying an employee as an independent contractor.

It is possible that the payment of a stipend to a volunteer may not convert the volunteer to an employee if the stipend is considered a reimbursement of certain types of expenses, a de minimis fringe benefit, or a nominal fee for service. Note that a Wage and Hour Opinion Letter (FLSA2006-28) expressed that the Department of Labor will presume that a fee paid to a volunteer is nominal as long as the fee does not exceed twenty percent of what an organization would otherwise pay to hire a full-time employee for the same services. However, organizations paying stipends to volunteers should confer with an employment/tax attorney for counsel regarding these issues.

A person receiving payment from a nonprofit may also fall under the classification of intern. Interns are also not employees and not subject to minimum wage and overtime laws under the FLSA [Fair Labor Standards Act] if they meet the 6-factor test. See Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act and Legalities of Nonprofit Internships (Blue Avocado), which discusses the practical difficulties of meeting factor 4 (“The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded”). Under the FLSA, a person working in a part of the nonprofit that is considered a commercial (unrelated business) activity will not be recognized as a volunteer.

Department of Labor’s 6 Factor Test

The Department of Labor (DoL) has provided guidance to employers by publishing a 6-factor test. For a for-profit employer, all 6 factors must be met:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

However, the FLSA makes a special exception under certain circumstances for individuals who volunteer to perform services for a state or local government agency and for individuals who volunteer for humanitarian purposes for private non-profit food banks. The DoL also recognizes an exception for “individuals who volunteer their time, freely and without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to non-profit organizations.”

Unpaid internships in the public sector and for non-profit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible. WHD is reviewing the need for additional guidance on internships in the public and non-profit sectors.

New Developments

in 2015, the 2nd Circuit (NY, CT, VT) vacated a District Court’s decision in Glatt v. Fox Searchlight Pictures, Inc. (the “Black Swan” unpaid intern case) and established what appears to be a more employer-friendly 7 factor test relying heavily on who is the primary beneficiary of the relationship – the organization or the worker:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation; any promise of compensation, express or implied, suggests that an intern is an employee—and vice versa. [This single factor might be sufficient for nonprofit charitable organizations.]
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitment by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

On August 24, 2016, a court in a case called Wang v. The Hearst Corporation used the Glatt standard to dismiss a unpaid intern lawsuit. The 11th Cir. (AL, FL, GA) also adopted the 2nd Cir. approach. Notwithstanding these decisions, the DoL has not amended its 6-factor test and may wait to see how other Circuits decide.

7 Tips

  1. Get a signed writing from an unpaid intern about the position being an uncompensated, non-employee position.
  2. Do not merely fill an employee position with an unpaid intern; a new position should be created that incorporates the internship factors.
  3. Create and include in the internship educational sessions unrelated to accomplishing the day-to-day operational goals of the nonprofit.
  4. Train supervisors of unpaid interns on the differences in managing interns vs. employees (emphasis on education and training and accommodating school schedules).
  5. Require proof of academic credit eligibility in advance of hiring the unpaid intern.
  6. Assess and limit the intern’s day-to-day operational duties and tasks that are not directly related to the educational goals, particularly those that are menial.
  7. Limit the length of an intern relationship.



Lorman Webinar: Complexities of Starting a Nonprofit in California

Erin is presenting a live webinar titled, Complexities of Starting a Nonprofit in California, for Lorman on October 13 at 10:00 a.m. – 11:30 a.m. PST. Here is the description of the program:

This topic will cover the process of forming a California nonprofit entity, going through the legal considerations involved in each step in detail. We will also cover some additional California law considerations that apply to nonprofit, as well as considerations for organizations seeking recognition of exemption under Internal Revenue Code Section 501(c)(3). Concepts will be illustrated through examples and information on how to access additional resources will be provided. By the end, you will have a better understanding of the process of forming a California nonprofit entity, obtaining federal and state tax-exemption, and complying with some common ongoing legal requirements.


Learning Objectives:

  • You will be able to describe the formation process.
  • You will be able to recognize the organizational mission and developing business plan.
  • You will be able to discuss alternatives to forming a nonprofit.
  • You will be able to review California law considerations.

Attendees of this webinar can earn CLE, CAC, or CPE credit, and can get 50% off of the webinar price using this link. For more information about the agenda, click here.


Nonprofit Tweets of the Week – 10/7/16

palms at hurricane

The past week was marked by Hurricane Matthew killing hundreds in Haiti and hitting Florida. Have a listen to Jay-Z, Bono, The Edge, and Rihanna perform Stranded (Haiti Mon Amour) while perusing our curated nonprofit tweets of the week:

  • NY AG Eric Schneiderman: My office sent a Notice of Violation to the Trump Foundation. More information, and the letter, here:
  • National Council of Nonprofits: Yup. If you don’t register for $raising you are not supposed to #fundraise Know the basics:
  • Philip Hackney: My latest @surlysubgroup post: Trump’s Abuse of Trump Foundation — Criminal Tax Implications? via surlysubgroup
  • Brian Mittendorf: Honored to work with @EOTaxProf on this piece explaining the #Trump charity controversies and their implications. The Conversation
  • National Council of Nonprofits: We are also totally puzzled by @charitynav latest stance on #overhead NPQ
  • David La Piana: How the Lack of Market Feedback Puts Foundations at Risk — and What Some Funders are Doing About It  via PND Blog
  • CalNonprofits: @janmasaoka after great keynote by Alicia Garza: this reminds us that serving people & advocating for people are not 2 separate things.
  • Gene: Nonprofit – 501(h) limits should be referred to as TARGETS re how much charities can do – Eric Gorovitz
  • Nonprofit Quarterly: Five Supreme Court cases YOU need to be paying attention to: NPQ
  • ICNL Alliance: Curious about recently adopted laws restricting #civilsociety? Check out ICNL’s rebranded #CivicFreedom Monitor!

IRS TE/GE FY 2017 Work Plan

Last week, the IRS Tax Exempt and Government Entities (TE/GE) division issued their 2017 work plan. The document summarizes strategy and compliance from fiscal year (FY) 2016, as well as a plan for the coming FY 2017. As covered by the Nonprofit Law Blog last year, TE/GE currently focuses on 5 strategic areas for continuous improvement within the exempt organizations (“EO”) division: exemption, protection of assets, tax gap, international, and emerging issues. Here are some notable points from the work plan:

  • Issue Snapshots: In order to increase the technical knowledge of EO employees and the general public, the IRS prepares and posts technical “Issue Snapshots” that provide analysis regarding a particular tax issue. Five issue snapshots were completed on EO topics including IRC Section 4946’s definition of a disqualified person, and currently, over 20 are in development. The in-process snapshots will include private foundation qualifying distributions and 501(c)(4) and determining primary activity.
  • Examinations/Revocations: As of June 30, 2016, the IRS completed 4,984 examinations of annual returns. The largest issue area examined was “Filing, Organizational, Operational”, which focused on verifying the exempt activities of the organization or its filing requirements. Many of these examinations involved the IRS securing delinquent returns. Within the IRS’s post determination compliance examinations of 1,400 exempt organizations that filed Forms 1023 or 1024, 39% had issues “ranging from amendments to organizational documents and failure to file returns.” Lastly, of the 43 organizations that had their exempt status revoked in FY 2016, the majority were revoked for not operating for an exempt purpose.
  • Form 1023-EZ: Form 1023-EZ constituted roughly 60% of all Form 1023s received by the IRS in the third quarter of FY 2016. Ninety-four percent of 1023-EZ applications were approved, and approximately 5% were rejected. The IRS anticipates the reduction of the user fee, which went into effect on July 1, 2016, will result in an increase in the percentage of 501(c)(3) applicants using Form 1023-EZ. Despite widespread criticism from state regulators, the National Taxpayer Advocate, and many commentators, the IRS also noted its belief that the 1023-EZ form and process has proven to be efficient and effective through pre- and post-determination review processes.
  • Determination Results: In late 2015, the IRS began rejecting incomplete Form 1023 applications by returning the application packages, along with any user fee paid and a letter explaining why the application was rejected. This process is meant to educate applicants as to the requirements of a complete application and ensure that once the application is assigned to a review agent, it can be expedited and reviewed efficiently. Overall, the IRS approved 93.6% of applications in FY 2016, and denied less than one percent. The most common reasons for denial of exempt status were private benefit and private inurement, having a substantial non-exempt purpose, and commerciality issues. Additionally, since the implementation of the new requirement for social welfare and civic organizations to submit notice to the IRS of intent to operate as a 501(c)(4), Form 8976, the IRS has received and processed over 400 notifications.

2017 Collaboration Prize


Applications for the 2017 Collaboration Prize, a national competition that recognizes and celebrates nonprofit organizations that collaborate effectively to create greater impact, open on Monday, October 3, and close at the end of Wednesday, November 16. The Collaboration Prize is a a project of The Lodestar Foundation whose mission to maximize the leverage of philanthropic resources is accomplished in part through pursuit of a strategy to encourage and support long-term collaborations among nonprofits working in the same or complementary areas in order to increase efficiency and/or impact and to reduce duplication of efforts.

The Collaboration Prize identifies and showcases models of permanent collaboration between two or more nonprofit organizations. Recognizing the impact that can result from working together, the Prize shines a spotlight on collaborations that demonstrate innovative and effective responses to challenges or opportunities. A grand prize of $150,000 will be awarded to the collaboration that best exemplifies the impact that can result from working together on a permanent basis. Each of the eight finalists will receive $10,000.


In addition to identifying and showcasing exceptional nonprofit collaboration efforts, the Collaboration Prize collects and shares models and best practices for the field through the [Foundation Center’s] Nonprofit Collaboration Database, a resource for everyone seeking real-life examples of how nonprofit organizations can work together.

Among the eligibility criteria:

  • A permanent collaboration must have been formed by at least two nonprofit organizations;
  • A written formal agreement must exist that addresses the critical elements of the collaboration;
  • The collaboration must have been in operation for at least 18 months; and
  • The collaboration must do most of its work in the United States and all parties to the collaboration must be located in the United States.

Additional Resources

Nonprofit Collaborations: The Structural Options

While there is no denying the importance of collaborations for many organizations, and particularly to tackle larger social problems, leaders of nonprofits should have a basic understanding of the legal structures possible before entering into these collaborations.

Collaboration Hub

The Collaboration Hub serves as a home to vast resources related to collaboration in the social sector. This Hub includes valuable publications, questions and answers, links to videos and podcasts, blog posts, and a comprehensive, searchable collection of 650+ profiles of vetted collaborations submitted for the Collaboration Prize in 2009 and 2011.

The Collaborative Map

Infographic and additional resources from La Piana Consulting, the national management and consulting firm providing oversight over the Collaboration Prize process.



Nonprofit Tweets of the Week – 9/30/16

Hand of a person casting a ballot at a polling station during voting.

The past week was marked by National Voter Registration Day, the Presidential Debate, and speculation of an imminent massive assault by the Assad regime against rebels in Aleppo, where as many as 300,000 citizens are trapped in deplorable conditions with little drinking water and medical care. Have a listen to Sia‘s The Greatest while perusing our curated nonprofit tweets of the week:

  • Philanthropy: Charity becomes a hot election topic — and not in a good way
  • David Fahrenthold: “It’s hard to make an IRS auditor laugh. But this would do it.” Washington Post [Ed. Referring to a Trump adviser’s assertion that Trump is actually doing his foundation a favor, by ‘storing’ its portrait on his golf resort wall.]
  • Stacy Palmer: From @TPM: NY Attorney General’s Probe Of Trump Foundation Appears To Widen Talking Points Memo
  • Philip Hackney: The Donald J. Trump Foundation looks a lot like a personal piggy bank. via Slate
  • Grantmakers for Effective Organizations: Read our newest resource, Strengthening Nonprofit Capacity, for the 3 C’s of effective capacity building:
  • CalNonprofits: Space still available at next week’s #CalCon16! News you can use from @GTak @esbluestein @vdevera, many more!
  • Nona Randois: No #SCOTUS question at the #debate but SCOTUS is crucial to all issues discussed. Here’s why it matters:
  • For Purpose Law: When the Revenue Agent Comes Calling: Document Retention
  • Fast Co. Exist: It’s time that for-profits start learning from nonprofits. Here’s how:
  • Nonprofit Quarterly: This year’s #SOCAP16 Conference revealed both growing popularity of #impact investing & growing tension in the field NPQ [Ed. This is an article Michele and I wrote following her coverage of this year’s SOCAP event.]

CalNonprofits Annual Convention 2016


The CalNonprofits 2016 Annual Convention will take place at The California Endowment (1000 N. Alameda Street) in Los Angeles next week on Thursday, October 6. The Convention features Alicia Garza, Co-Founder of Black Lives Matter, as its keynote speaker.

This year’s theme, the Power of California Nonprofits, focuses on how to use our collective power to strengthen our ability to thrive as organizations and make California’s communities stronger.

The Convention also features an opening plenary delivered by CalNonprofits CEO Jan Masaoka on the state of the nonprofit sector and predictions for the future, a panel on nonprofit leaders winning public office, a debate on the right to know versus the right to privacy (I’ll be all ears for this), and several workshops covering a range of topics from disparities in nonprofit funding to overhead messaging.

I’m also looking forward to participating on a panel discussing Hot Topics to Keep Your Organization Out of Hot Water:

Get the straight scoop from the real deal: Tania Ibañez, the ranking attorney in charge of nonprofits at the California Attorney General’s office, and two of the smartest, best nonprofit attorneys around — Gene Takagi and Liz Bluestein — will let you in on the new and most important ways to stay out of trouble with the law. You’ll never get better information or a better place to ask your questions than this session, which will be moderated by nationally recognized attorney Rosemary Fei.


Rosemary Fei, Principal, Adler & Colvin (Moderator)
Tania Ibanez, Senior Assistant to the Attorney General of California
Gene Takagi, Managing Attorney, NEO Law Group
Elizabeth Bluestein, Vice President and General Counsel, Public Counsel