May 2008

 

17th Annual Institute on Advising Nonprofit Organizations in Colorado and A Primer on Advising Nonprofit Organizations

 

Program Highlights

 

- A Four-Subject Primer

- Annual Tax Update

- Federal and State Regulation of Political Campaign and Lobbying Activities

- The New Form 990 and Governance Decisions

- Anatomy of Employee Embezzlement-Case Histories, District Attorney Involvement and Avoidance Techniques

- Executive Compensation and Retirement Planning for Nonprofit Organizations

- Endowment Funds: Investment Guidelines, Distribution Considerations, and the Enforceability of Restrictions

- Protection of the Corporate Veil-Avoiding A Liability Breakthrough

 

 

Program Description

 

This year's Institute once again includes the one-half day expansion to provide a Primer comprised of four lectures. The purpose of the Primer is to furnish a basic yet comprehensive understanding of how to form and then to obtain tax exemption for a new nonprofit entity, and to understand and plan for operational tax issues including avoidance of the unrelated business income tax, followed by an examination of the rules concerning fundraising. 

 

 

Primer Topics

   

Nonprofit corporations in Colorado may be formed for “any lawful business or activity,” and the flexibility of Colorado's nonprofit corporation statute lends itself to structuring nonprofit corporations in ways that accommodate a wide diversity of circumstances. This session will begin with the mechanics of creating a nonprofit corporation and then proceed to consider many of the different ways in which they may be governed, including a discussion of the relative rights and responsibilities of members and directors. This session will also touch on important areas of compliance with the Colorado Revised Nonprofit Corporation Act.

Presented by John Valentine Esq., Holme Roberts & Owen, LLP, Denver, CO

   

This session will provide a basic introduction to the tax law applicable to organizations described in Section 501(c). It will begin with an overview of the varied categories of tax-exempt organizations, including social welfare organizations, trade associations, and social clubs, and will then focus on the requirements for qualifying and operating as a Section 501(c)(3) charity. In that regard, this presentation will explore the types of activities that can be considered to fall within the scope of Section 501(c)(3), the relationship between its public benefit requirement and private inurement prohibition, and its restrictions on lobbying and political campaign involvement.

Presented by Arthur A. Hundhausen, Esq., Holland & Hart, LLP, Denver, CO   

 

This session will clarify the complexities of qualifying a Section 501(c)(3) organization as a public charity, as well as the consequences of its failure to establish or maintain that status and thus becoming classified as a private foundation. The second half of this presentation will explore the taxation of unrelated business taxable income, with a special emphasis on how to recognize which activities may generate taxable income and strategies for avoiding or minimizing it.

Presented by: Kelly R. Berg, Esq., Tuthill & Hughes LLP, Denver, CO     

 

This presentation will provide a survey of the rules relating to the deductibility of charitable contributions, including categories of eligible donees, percentage limitations, and special rules based on what is donated, the nature of the organization to which it is donated, and the uses to which it is put.  This session will also briefly cover the use of charitable trusts, private foundations, supporting organizations and endowment funds as charitable giving techniques, and the rules for substantiating charitable contributions.

Presented by Merry H. Balson, Esq., Berenbaum, Weinshienk & Eason, P.C., Denver, CO

 

 

Institute Topics

 

Annual Tax Update

Presented by Peter C. Guthery, Esq., Berenbaum, Weinshienk &Eason, P.C, Denver, CO

 

Election years can exert irresistible pressures on conventional nonprofit corporations, threatening to entangle them in political campaigns, ballot issues, and both grassroots and direct lobbying. At the same time, special interest groups often find more exotic types of nonprofit organizations to be the vehicle of choice for the advocacy of positions that benefit specific parties and candidates, The two presenters for this program will focus on how nonprofits must comply with both the campaign finance laws, to avoid unfavorable publicity and regulatory penalties, and the federal income tax laws, to avoid jeopardizing their tax-exempt status.

Presented by Mark G. Grueskin, Esq., Isaacson Rosenbaum PC, Denver, CO and Marla Williams, Esq., Holme Roberts & Owen LLP, Denver, CO

 

The IRS has issued its much-anticipated revised version of Form 990, the annual information return filed by tax-exempt organizations other than private foundations. The Form and related schedules contain numerous questions pertaining to whether the organization has governance and administrative policies related to areas that the IRS considers important. These areas include policies related to: conflicts of interest; whistleblowers; document retention and destruction; review of executive compensation; disclosure of tax returns and governing documents to the public; review of Form 990 by the governing board before filing; reimbursement of expenses for first-class travel or companion travel; and more. The new Form 990 will apply to fiscal years ending on or after December 31, 2008, so organizations should discuss with their legal counsel and accountants the merits of adopting these policies if they are not already in place.  This session will examine the major changes to Form 990, with emphasis on the governance questions that must now be answered.

Presented by Thomas J. Kundinger, CPA., Kundinger, Corder & Engle, P.C., Denver, CO

 

Anatomy of Employee Embezzlement-Case Histories, District Attorney Involvement and Avoidance Techniques

Presented by Joseph M. Morales, Esq., Denver Chief Deputy District Attorney, Economic Crime Unit, Denver, CO

 

Treasury and the Department of Labor have issued two sets of regulations that impact 403(b) plans (new Form 5500 requirements and the final 403(b) regulations). The presenter for this session will review the types of retirement plans that are available to nonprofit organizations and discuss the 403(b) plan changes and considerations in deciding whether to switch to a 401(k) plan as a result of the regulatory changes. Treasury has also issued the final 409A regulations that impact executive compensation and 457(f) plans and arrangements. The presenter will also discuss what agreements have to be reviewed and amended for 409A compliance by December 31, 2008 and whether you should consider a 457(b) plan in order to avoid 409A.

Presented by Renee W. O'Rourke, Esq., Faegre & Benson LLP, Denver, CO

 

While the law has historically allowed charities to administer endowment funds in ways that might have surprised and deviated from the expectations of ordinary donors, the Colorado legislature is poised this year to enact new legislation that seeks to bring clarity and predictability to this area, but which, in other respects, may generate equal amounts of confusion and controversy. This session will concentrate on three aspects of the proposed (and possibly newly enacted) Colorado Uniform Prudent Management of Institutional Funds Act – its codification of flexible investment guidelines, its authorization of discretionary spending policies, and its new rules affecting the ability of charities to administer such funds in ways that may depart from the original wishes of their donors.

Presented by Peter B. Nagel, Esq., Peter B. Nagel, P.C., Denver, CO

 

 

Planning Committee:

 

Guthery & Rickles, P.C.

Attorneys and Counselors at Law

Denver, CO   

 

Berenbaum, Weinshienk & Eason, P.C.

Denver, CO

 

Tuthill & Hughes LLP

Denver, CO

 

Peter B. Nagel, P.C.

Denver, CO   

 

Walters & Joyce, P.C.

Denver, CO