Chapter 14 - Not-for-profit organizations - Regulatory, taxation, and performance issues. After studying Chapter 14, you should be able to: Identify oversight bodies and the source of their authority over not-for-profit organizations (NFPs); describe how and why states regulate NFPs; describe not-for-profit incorporation laws, registration, licenses, and tax-exemption;. | Chapter 14 Not-for-Profit Organizations—Regulatory, Taxation, and Performance Issues Learning Objectives After studying Chapter 14, you should be able to: Identify oversight bodies and the source of their authority over not-for-profit organizations (NFPs) Describe how and why states regulate NFPs, and describe: Not-for-profit incorporation laws Registration, licenses, and tax-exemption Learning Objectives (Cont’d) Identify how the federal government regulates NFPs, and describe: Tax-exempt status—public charities and private foundations Unrelated business income tax Restricting political activity Excessive benefits received by officers Reorganization and dissolution 1 ` Learning Objectives (Cont’d) Describe governance issues of NFP Boards, including: Incorporating documents Board membership Identify how benchmarks and performance measures can be used to evaluate NFPs 1 NFP organizations receive tremendous amounts of contributed resources and benefits, including, in many cases, tax-exempt status It is important that NFPs be held accountable for the resources and benefits provided Not-for-profit Organizations 1 State governments have oversight over NFPs because states grant legal existence through not-for-profit incorporation laws, charitable trust laws, or limited liability companies The federal government has oversight over NFPs because the federal government grants exemption from federal income taxation (., tax-exempt status) Oversight Bodies 1 Starting out (registering as a not-for-profit corporation, charitable trust, LLC) Licenses (., for charitable solicitation or to operate a facility) Annual compliance reporting Tax compliance (., sales and use tax) Limit on political activity States Regulate NFPs in Several Ways (See Ill. 14-1) 1 An NFP will interact with the Federal government throughout its life cycle (see Ill. 14-2): Starting out Applying to the IRS for tax-exemption Required annual filings Ongoing compliance . | Chapter 14 Not-for-Profit Organizations—Regulatory, Taxation, and Performance Issues Learning Objectives After studying Chapter 14, you should be able to: Identify oversight bodies and the source of their authority over not-for-profit organizations (NFPs) Describe how and why states regulate NFPs, and describe: Not-for-profit incorporation laws Registration, licenses, and tax-exemption Learning Objectives (Cont’d) Identify how the federal government regulates NFPs, and describe: Tax-exempt status—public charities and private foundations Unrelated business income tax Restricting political activity Excessive benefits received by officers Reorganization and dissolution 1 ` Learning Objectives (Cont’d) Describe governance issues of NFP Boards, including: Incorporating documents Board membership Identify how benchmarks and performance measures can be used to evaluate NFPs 1 NFP organizations receive tremendous amounts of contributed resources and benefits, including, in
