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Wagenmaker & Oberly provides legal counsel to NONPROFIT ORGANIZATIONS across the nation with offices in Chicago and Charleston.

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Hope Through Loans: Is That Charitable?

May a nonprofit that makes loans to private individuals and businesses qualify as a Section 501(c)(3) organization? Or is making a loan a “business,” not suitable for public charity status? In the world of microfinance—making small loans to those who lack ready access to funds— the IRS allows for such public charity qualification, albeit within restrictive parameters. Charitable microfinance activities are well grounded in historical practice, they can provide significant societal benefits to disadvantaged communities, and thus they can fulfill tax requirements for “charity.”

NONPROFIT LAW NEWSFEED

Widely used nonprofit efficiency tool doesn't work

Science Daily  A recent study from North Carolina State University finds that the tool most often used to assess the efficiency of nonprofit organizations isn't just inaccurate -- it can actually be negatively correlated with efficiency.

News Alert – Finance Releases Proposed Legislative Changes to Political Activities Rules

Miller Thomson  On Sept 14, 2018, the Department of Finance released draft legislation proposing amendments to the provisions in the Income Tax Act (Canada) (the “Act”) that deal with political activities by registered charities and registered Canadian amateur athletic associations (“RCAAAs”). This draft legislation, which is accompanied by a backgrounder, is open for comment until October 13, 2018.

Ted Cruz Campaign Is Mailing Donation Requests Disguised as Legal Summonses

Newsweek  Ted Cruz’s Texas senatorial campaign has sent hundreds of thousands of mailers seeking donations that are meant to look like official county summons, a high-ranking campaign official confirmed to Newsweek.

New Orleans Residents Sue Brad Pitt Foundation: Celebrities and Disaster Relief

Nonprofit Quarterly  Celebrities often play significant roles when disasters hit, contributing their names, reputations, and financial resources at a time when the need is great, and support must be raised quickly.

All Margin, No Mission? The Story of Chicago’s Better Health Foundation

Nonprofit Quarterly  An Ohio-based nonprofit organization came to Chicago promising to create a “model for the delivery of housing that not only provides an affordable, attractive and safe place for residents to live, but also provides the means by which residents can reach their greatest potential.” Three years later, this commitment is unrealized; they are trying to give their properties away, and we are left to consider whether they were just a mismanaged nonprofit or a total scam.

Fixing Kentucky’s Nonprofit Tax Bill

Nonprofit Quarterly  A month ago, NPQ reported on the impact that a new tax bill was having on nonprofits in the state of Kentucky. The bill, in conjunction with a recent decision by the state’s Supreme Court, meant that nonprofits would have to collect sales tax on a variety of items including admission to special events and, potentially, sales of silent auction items. Now, it seems some steps are being taken to change this.

Bankruptcy Court Lacks Power to Substantively Consolidate Nondebtor, Nonprofit Entities With Archdiocese Debtor

JD Supra  In the wake of scandal-driven bankruptcies filed by nearly 20 U.S. Roman Catholic dioceses and religious orders, scrutiny has been increasingly brought to bear on the benefits and burdens that federal bankruptcy laws offer to eleemosynary (nonprofit) corporations. Nonprofits seek bankruptcy protection for a variety of reasons. In the case of the dioceses and religious orders, chapter 11 has been a vehicle to head off (at least temporarily) thousands of pending and potential clergy sexual-abuse cases seeking hundreds of millions of dollars in damages. Other nonprofit filings have been designed to restructure balance sheets bloated with debt, to facilitate sales of nonprofits' assets, to effect orderly liquidations, to give nonprofits a needed breathing spell in a climate of regulatory change and uncertainty, or to more effectively manage claims of fiduciary infractions or fraud.

Boston’s Universities Shortchange City Government

Nonprofit Quarterly  Last week, Boston residents testified at a City Council hearing demanding tax-exempt nonprofit institutions pay their “fair share” under the city’s payment in lieu of taxes (PILOT) program. A coalition of Boston nonprofits and community groups, the PILOT Action Group, indicates that the “49 largest institutions in the city have failed to pay over $77 million in promised payments under the PILOT program.”

Judge's ruling invalidates FEC regulation allowing anonymous donations to 'dark money' groups

Politico  A U.S. District Court judge on Friday issued a ruling invalidating a Federal Election Commission regulation that has allowed donors to so-called dark-money groups to remain anonymous, the latest development in a years-long legal battle that could have major implications for campaign finance.

Complaint: utility-backed group in Michigan violates tax, campaign laws

Energy News Network  A utility-backed nonprofit advocacy group playing an outsized role in Michigan’s primary election is violating federal tax and campaign finance laws, according to a complaint filed with the Internal Revenue Service.

Widely used nonprofit efficiency tool doesn't work

Science Daily  A recent study from North Carolina State University finds that the tool most often used to assess the efficiency of nonprofit organizations isn't just inaccurate -- it can actually be negatively correlated with efficiency.

News Alert – Finance Releases Proposed Legislative Changes to Political Activities Rules

Miller Thomson  On Sept 14, 2018, the Department of Finance released draft legislation proposing amendments to the provisions in the Income Tax Act (Canada) (the “Act”) that deal with political activities by registered charities and registered Canadian amateur athletic associations (“RCAAAs”). This draft legislation, which is accompanied by a backgrounder, is open for comment until October 13, 2018.