Nonprofit Law

Does your organization want to engage with public policy, influence a decision on an important bill, add your voice to a debate? Thousands of human and social services nonprofits have something to say. What are you allowed to do without violating the IRS codes?

In the philanthropic Dark Ages (before 1969) there was no rule that said foundations had to make any grants with their money. Congress more or less closed that loophole with the Tax Reform Act of ’69. There were complications and ambiguities, but in 1976 the “five percent payout requirement” was set in stone. It’s been the default standard for grant-making foundations ever since.

MYTH: I am starting a foundation to give out school supplies to kids who cannot afford them. I can’t wait to see their little faces when I give them new backpacks and markers!

MYTH: I am going to be president of my nonprofit and make $100,000 a year!

MYTH: Nonprofit and tax-exempt mean the same thing. MYTH: I own my nonprofit.