In both 2011 and 2012, Internal Revenue Service data shows that there were about 1.08 million charitable organizations in the United States. Data from that same period shows that approximately 45,000 new applications were approved in 2012. One of the conclusions that can be drawn from this is: charitable organizations are going out of business at about the same rate as they are starting up. As with any small business, even the most well-intentioned and well thought out organizations may not be able to sustain long-term. However, if founders of a new organization go into the venture having thought through their options fully, they are moving forward with their eyes wide open prepared for the inevitable bumps in the road.
Since last May, when Lois Lerner opened the floodgates on Tea Party Non-Gate, there has been a flurry of news stories relating to tax-exempt organizations. Now that Tea Party Non-Gate is starting to finally settle down a bit (for those of you who haven’t yet seen this week’s items, see this article), there is some interesting activity in the courts that has come to my attention in the last week:
Sometimes, particularly when an organization is small and entirely volunteer-run, it is easy to forget that the organization should still be operated like a business. “Operating like a business” means lots of things – filing required tax and information returns, keeping corporate registration (if applicable) current, compliance with charitable registration requirements, etc. All of these are frequently missed by small organizations. Also frequently missed – keeping books and records up to date and accessible. For more about what this entails and why it is important, read on…
Unfortunately (in my opinion), the news cycle has still not moved off of the IRS muck-ups. I think that the continued focus on this, as well as the developments (in terms of staff/institutional knowledge lost), are disappointing. Below is a collection of news stories I have found interesting and/or accurate recently, along with my commentary.
Now that the TIGTA report is out, I wanted to follow up on my previous rant (yes, still ranting) about the IRS-Tea Party nonsense. First, just to be clear – I think the IRS mucked it up. They should not have chosen the terms that they chose to centralize the applications. Was it a conspiracy against conservatives? No. Was it poor management, combined with too many applications, too little staffing, and an area of law that is hazy and confusing at best? Absolutely. Should they be scouring the application of every organization (regardless of political affiliation) conducting political activities? Most definitely.
Read more for both a few of my thoughts on the TIGTA report, as well as links to a few others’ writings on this issue that I think are accurate –