The NY Times related that Representative Joe Baca has achieved near celebrity status in his suburban Los Angeles district, as much for his record of giveaways — Thanksgiving turkeys, college scholarships, spare boots for firefighters — as for anything he has done in Congress.
That generosity is made possible by the Joe Baca Foundation, a charity his family set up three years ago to aid local organizations. It provides another benefit, too: helping the Democratic congressman run something akin to a permanent political campaign.
Joe Baca T-shirts and caps are given out at the charity’s events, where banners display his name. Local newspapers mention the charity’s donations, and cable stations show appearances by Mr. Baca and his family at functions his foundation supports.
“It’s great,” said Laura Goodloe, 36, as she watched her 8-year-old son, Jordan, play at the arena in San Bernardino, Calif., where the Baca Foundation offered a free basketball clinic last month. “He is giving back to the community.”
But unlike most private foundations, Mr. Baca’s gets little of its money from its founders’ pockets. Instead, local companies and major corporations that have often turned to Mr. Baca’s Washington office for help, and usually succeed in getting it, are the chief donors.
A review by The New York Times of federal tax records and House and Senate disclosure reports found at least two dozen charities that lawmakers or their families helped create or run that routinely accept donations from businesses seeking to influence them. The sponsors — AT&T, Chevron, General Dynamics, Morgan Stanley, Eli Lilly and dozens of others — contribute millions of dollars annually in gifts ranging from token amounts to a check for $5 million.
Since 2009, businesses have sent lobbyists and executives to the plush Boulders resort in Scottsdale, Ariz., for a fund-raiser for the scholarship fund of Representative Steve Buyer, Republican of Indiana; sponsored a skeet shooting competition in Florida to help the favorite food bank of Representative Allen Boyd, Democrat of Florida; and subsidized a spa and speedway outing in Las Vegas to aid the charity of Senator John Ensign, Republican of Nevada.
Just last month, they touted their largess with flags bearing their names near the tees at a golf tournament benefiting the foundation of Representative James E. Clyburn, Democrat of South Carolina.
Despite rules imposed in 2007 to curb the influence of special interests in Congress, corporate donations to lawmakers’ charities have continued, thanks to a provision that allows businesses to make unlimited gifts to them. And while business executives say they want to give to a good cause, their pattern of spending — contributions that often are not disclosed, in apparent violation of ethics rules — suggests another reason. Read more here.
Monday, September 6, 2010
Thursday, August 26, 2010
Independent Contractors and Consultants – Doing it Right
NYCON's national association, The National Council of Nonprofits, offers Nonprofit Knowledge Matters and a look at Contractors and Consultants:
You’ve just hired an independent contractor or consultant to work on a special project. Did you first evaluate whether the worker should be treated as an employee instead? Does it matter?
Yes, it matters because the government makes a distinction between the two classifications of workers (independent contractor/consultant versus employee) and requires nonprofits to treat them differently for payroll and withholding purposes. Also, insurance issues will surface when the consultant is injured and tries to file a claim for workers’ compensation. Is she covered? It depends on whether she is a consultant – or not.
Federal and state governments have regulations that define who is an independent contractor/consultant and who is an employee. If a nonprofit misclassifies a worker, the nonprofit is at significant risk. There are serious penalties and back taxes owed when a nonprofit incorrectly treats someone as an independent contractor/ consultant, when in fact the worker should have been classified and treated as an employee.
Additionally there are risks to misclassifying a worker as an exempt employee, when s/he should be classified as non-exempt. For tips and tools for avoiding misclassifying workers, read more about this topic from the resources available on the National Council’s website.
IRS guidance provides that someone is properly classified as an independent contractor/consultant “when the nonprofit has the right to control or direct only the result of the work done by an independent contractor, and not the means and methods of accomplishing the result.” We hope you feel comfortable with the distinction between independent contractors/consultants and employees. If you are not sure, here are some resources to help you classify workers correctly and avoid associated risks:
You’ve just hired an independent contractor or consultant to work on a special project. Did you first evaluate whether the worker should be treated as an employee instead? Does it matter?
Yes, it matters because the government makes a distinction between the two classifications of workers (independent contractor/consultant versus employee) and requires nonprofits to treat them differently for payroll and withholding purposes. Also, insurance issues will surface when the consultant is injured and tries to file a claim for workers’ compensation. Is she covered? It depends on whether she is a consultant – or not.
Federal and state governments have regulations that define who is an independent contractor/consultant and who is an employee. If a nonprofit misclassifies a worker, the nonprofit is at significant risk. There are serious penalties and back taxes owed when a nonprofit incorrectly treats someone as an independent contractor/ consultant, when in fact the worker should have been classified and treated as an employee.
Additionally there are risks to misclassifying a worker as an exempt employee, when s/he should be classified as non-exempt. For tips and tools for avoiding misclassifying workers, read more about this topic from the resources available on the National Council’s website.
IRS guidance provides that someone is properly classified as an independent contractor/consultant “when the nonprofit has the right to control or direct only the result of the work done by an independent contractor, and not the means and methods of accomplishing the result.” We hope you feel comfortable with the distinction between independent contractors/consultants and employees. If you are not sure, here are some resources to help you classify workers correctly and avoid associated risks:
- Guidance from the IRS on everything you’ve always wanted to know about how to pay independent contractors correctly.
- Distinguishing between employees and independent contractors (written by the IRS for small business owners, but equally applicable to nonprofits.)
- IRS Publication 15-A (2010) provides guidance on classifying workers and includes a special section on tax issues relating to employees in exempt organizations.
- IRS Ministers’ Audit Guide (highlights special rules for religious organizations)
Spread the word: Deadline extended to October 15th for nonprofits to file their 990s.
Please join the State Association network of the National Council of Nonprofits, the IRS, and others to spread the word – to small nonprofits in particular – that they need to file with the IRS annually. Most urgently, many small nonprofits will lose their tax-exempt status if they have not filed in the past 3 years and fail to file by October 15th of this year. The IRS has announced a one-time relief program for nonprofits required to file the 990-N or 990-EZ that missed their deadline earlier this year.
- This short video from the IRS explains the filing deadline.
- The one-time relief program will not help organizations required to file the Form 990 or Form 990-PF. Their tax-exempt status will be automatically revoked if they fail to file for three consecutive years.
- Guidance from Guidestar.org explaining what you need to know about revocation of tax-exempt status.
- Electronic Filing Tool: Organizations with gross revenue under $100,000 may file their IRS Form 990-EZ electronically at no charge through the Urban Institute’s eFile program.
Sunday, August 22, 2010
Nonprofit Fund Faces Questions About Conflicts and Selection Procedures
The NY Times reported that in late July, the Social Innovation Fund, a new $50 million federal program aimed at financing the replication of nonprofit programs that work, made its first grants.
But what was supposed to have been an emblem of the administration’s commitment to nonprofit groups has become instead a messy controversy over potential conflicts of interest and the process used to select the grantees.
Several of the 48 independent reviewers who vetted the initial 54 applications for the grants were surprised by some of the winners because they had awarded them mediocre scores.
Critics noted that the executive director of the fund, Paul Carttar, had worked at New Profit Inc., a nonprofit group that helps promising social programs. New Profit Inc. received a $5 million grant from the fund.
Similarly, Patrick Corvington, the official who oversees the Corporation for National and Community Service, where the fund resides, previously worked for a foundation that financed a program operated by the Local Initiatives Support Corporation, better known as LISC. The foundation won a $4.2 million grant.
Marta Urquilla, senior adviser to the fund, said Mr. Carttar and Mr. Corvington played no role in selecting the winners. “We knew the things people are saying now would be said,” Ms. Urquilla said, “and so we made sure each application got its fair chance and stood on its own merits.”
But the fund has not disclosed who reviewed the grants — or who applied for them or the ratings the applicants received, information that often is provided by many other government agencies that make grants.
In soliciting applications, the fund published a detailed set of criteria it would use to evaluate them, but the process by which they would be vetted was unclear. Last week, it disclosed more information about the procedures, including that the applications went through four stages, as well as the number of organizations culled after each.
“The bare minimum would be to release the names of the peer reviewers, the names of the applicants and the score they each received,” said Dean Zerbe, a former tax counsel to Senator Charles E. Grassley, an Iowa Republican who has persistently scrutinized the Corporation for National and Community Service’s grants and programs.
The fund was created with the passage of the SERVE America Act last year and quickly became one of the hottest topics for discussion in the nonprofit sector, which saw it as a means of getting government financing for young but promising programs at a time when the economy has crippled much fund-raising and hobbled many endowments.
The 11 winners effectively serve as conduits to channel the grant money to other nonprofit organizations that operate successful programs that can be expanded to serve more people in more areas. The winners must match the government’s money, which also must be matched by the final recipients, potentially trebling the fund’s financial effect.
The broader goal, Ms. Urquilla said, is to develop a network of intermediaries like the grant winners that can identify promising programs and connect them to donors and other sources of financing to allow them to expand.
The criticism has led the fund to decide to publish redacted versions of the winning applications in the coming weeks, together with the ratings they were given by various panels and how those compare with applications that did not win. “We fully embrace open government and the trend toward greater transparency,” Ms. Urquilla said. “We just want to make sure we do it in a deliberative and responsive way.”
The disclosures may not satisfy the critics, though.
Ruth McCambridge, editor of the Nonprofit Quarterly magazine, said that she may file a request for all the applications under the Freedom of Information Act. “This is supposed to be a learning process,” Ms. McCambridge said. “That’s the way the people at the fund have billed it, and applicants for the next round of funding, if there is one, might find it useful to see what didn’t work the first time around.”
She questioned why the fund would not release the names of the applicants or the peer reviewers and why it asked the reviewers to shred their work when it was finished. Read more here.
But what was supposed to have been an emblem of the administration’s commitment to nonprofit groups has become instead a messy controversy over potential conflicts of interest and the process used to select the grantees.
Several of the 48 independent reviewers who vetted the initial 54 applications for the grants were surprised by some of the winners because they had awarded them mediocre scores.
Critics noted that the executive director of the fund, Paul Carttar, had worked at New Profit Inc., a nonprofit group that helps promising social programs. New Profit Inc. received a $5 million grant from the fund.
Similarly, Patrick Corvington, the official who oversees the Corporation for National and Community Service, where the fund resides, previously worked for a foundation that financed a program operated by the Local Initiatives Support Corporation, better known as LISC. The foundation won a $4.2 million grant.
Marta Urquilla, senior adviser to the fund, said Mr. Carttar and Mr. Corvington played no role in selecting the winners. “We knew the things people are saying now would be said,” Ms. Urquilla said, “and so we made sure each application got its fair chance and stood on its own merits.”
But the fund has not disclosed who reviewed the grants — or who applied for them or the ratings the applicants received, information that often is provided by many other government agencies that make grants.
In soliciting applications, the fund published a detailed set of criteria it would use to evaluate them, but the process by which they would be vetted was unclear. Last week, it disclosed more information about the procedures, including that the applications went through four stages, as well as the number of organizations culled after each.
“The bare minimum would be to release the names of the peer reviewers, the names of the applicants and the score they each received,” said Dean Zerbe, a former tax counsel to Senator Charles E. Grassley, an Iowa Republican who has persistently scrutinized the Corporation for National and Community Service’s grants and programs.
The fund was created with the passage of the SERVE America Act last year and quickly became one of the hottest topics for discussion in the nonprofit sector, which saw it as a means of getting government financing for young but promising programs at a time when the economy has crippled much fund-raising and hobbled many endowments.
The 11 winners effectively serve as conduits to channel the grant money to other nonprofit organizations that operate successful programs that can be expanded to serve more people in more areas. The winners must match the government’s money, which also must be matched by the final recipients, potentially trebling the fund’s financial effect.
The broader goal, Ms. Urquilla said, is to develop a network of intermediaries like the grant winners that can identify promising programs and connect them to donors and other sources of financing to allow them to expand.
The criticism has led the fund to decide to publish redacted versions of the winning applications in the coming weeks, together with the ratings they were given by various panels and how those compare with applications that did not win. “We fully embrace open government and the trend toward greater transparency,” Ms. Urquilla said. “We just want to make sure we do it in a deliberative and responsive way.”
The disclosures may not satisfy the critics, though.
Ruth McCambridge, editor of the Nonprofit Quarterly magazine, said that she may file a request for all the applications under the Freedom of Information Act. “This is supposed to be a learning process,” Ms. McCambridge said. “That’s the way the people at the fund have billed it, and applicants for the next round of funding, if there is one, might find it useful to see what didn’t work the first time around.”
She questioned why the fund would not release the names of the applicants or the peer reviewers and why it asked the reviewers to shred their work when it was finished. Read more here.
Thursday, August 19, 2010
Bill to Halt Certain Sales of Artwork May Be Dead
The NY Times reported that a bill to prohibit cultural institutions from selling pieces from their collections to cover operating costs has all but died in the New York State Legislature, in the face of opposition from major cultural institutions like the Metropolitan Museum of Art and the withdrawal of support from the bill’s Senate sponsor.
“It looks like it is lost for this session and for the foreseeable future,” said Michael Botwinick, director of the Hudson River Museum in Yonkers, who worked on the bill as a board member of the Museum Association of New York.
Some museums are already precluded from such sales by the state Board of Regents, but the bill would have made the practice illegal and expanded the prohibition to all museums.
“The problem is, we’ll have a two-tiered system,” said Assemblyman Richard L. Brodsky, who led the drafting of the bill and is running for attorney general.
Though museums sell artworks all the time, they generally direct the proceeds toward acquiring other works of art. Many in the museum world have deemed selling — or deaccessioning — artworks to pay expenses a misuse of funds that jeopardizes preserving cultural heritage as a public trust.
But some museums that would have been affected by the bill argued that it was overly broad and confining and that they were fully capable of governing themselves.
A spokesman for the Met called the legislation “impractical, unworkable and unneeded,” and the Met’s director, Thomas P. Campbell, wrote in an e-mail, “While we respect efforts to bring clarity to the deaccessioning process, we believe the Metropolitan Museum has maintained a scrupulously transparent process for more than three decades — tightly governed by its trustees, subject to review by the State Attorney General, and requiring that funds from deaccessioning be used only for the purpose of acquiring other works of art.”
The sense of urgency around deaccessioning has been spurred by several factors, including the National Academy Museum’s sale in 2008 of two Hudson River School paintings to cover operating costs, and by the fear that financially challenged institutions are coming to the view that, as Mr. Botwinick put it, “the Rembrandts in the collection are no different than the IBM stock.” Read more here.
“It looks like it is lost for this session and for the foreseeable future,” said Michael Botwinick, director of the Hudson River Museum in Yonkers, who worked on the bill as a board member of the Museum Association of New York.
Some museums are already precluded from such sales by the state Board of Regents, but the bill would have made the practice illegal and expanded the prohibition to all museums.
“The problem is, we’ll have a two-tiered system,” said Assemblyman Richard L. Brodsky, who led the drafting of the bill and is running for attorney general.
Though museums sell artworks all the time, they generally direct the proceeds toward acquiring other works of art. Many in the museum world have deemed selling — or deaccessioning — artworks to pay expenses a misuse of funds that jeopardizes preserving cultural heritage as a public trust.
But some museums that would have been affected by the bill argued that it was overly broad and confining and that they were fully capable of governing themselves.
A spokesman for the Met called the legislation “impractical, unworkable and unneeded,” and the Met’s director, Thomas P. Campbell, wrote in an e-mail, “While we respect efforts to bring clarity to the deaccessioning process, we believe the Metropolitan Museum has maintained a scrupulously transparent process for more than three decades — tightly governed by its trustees, subject to review by the State Attorney General, and requiring that funds from deaccessioning be used only for the purpose of acquiring other works of art.”
The sense of urgency around deaccessioning has been spurred by several factors, including the National Academy Museum’s sale in 2008 of two Hudson River School paintings to cover operating costs, and by the fear that financially challenged institutions are coming to the view that, as Mr. Botwinick put it, “the Rembrandts in the collection are no different than the IBM stock.” Read more here.
Money still flowing to 'pork' projects in N.Y.
The Poughkeepsie Journal reported that Gov. David Paterson's veto pen has yet to end spending for legislative earmarks, state records show.
The state in July signed off on $12.5 million in member items for lawmakers' hometown projects — including $438,000 for a senior center in Queens, $100,000 for a group opposed to a major power line in central New York and $7,500 for the Rochester crime stoppers program.
In all, 609 member items were signed off by the state Comptroller's Office in July, a review by the Journal's Albany bureau found. An additional 57 projects totaling nearly $1 million were approved in just the first few days of August.
The spending comes even after Paterson held marathon sessions last month to personally sign 6,709 vetoes of lawmakers' pork-barrel projects approved in last year's budget, a total of about $190 million. But the vetoes haven't shut off the spending spigot quite yet.
State law allows the money from last year's budget to flow until Sept. 15. So nonprofits and local governments, who were banking on the money before Paterson's surprising vetoes, are making a dash for the cash before it's too late.
"We're hearing from groups all over that they are scrambling right now to get all their vouchers in and work completed," said Ron Deutsch, who heads New Yorkers for Fiscal Fairness, a group that works with non-profits. "Everyone's in scramble mode right now."
The stakes are high from some groups that rely on the member items to fund programs and, in some cases, to stay in business.
Assemblyman Marc Molinaro, R-Red Hook, said he doesn't oppose Paterson's vetoes of the member items, but the governor should have done it last year — before the groups were counting on the money.
"I have a concern about the governor vetoing dollars that have been awarded and, at the very least, were in the process of being contracted," he said.
Some groups said they have been waiting for reimbursements from member items pledged for their projects last year. Read more here.
The state in July signed off on $12.5 million in member items for lawmakers' hometown projects — including $438,000 for a senior center in Queens, $100,000 for a group opposed to a major power line in central New York and $7,500 for the Rochester crime stoppers program.
In all, 609 member items were signed off by the state Comptroller's Office in July, a review by the Journal's Albany bureau found. An additional 57 projects totaling nearly $1 million were approved in just the first few days of August.
The spending comes even after Paterson held marathon sessions last month to personally sign 6,709 vetoes of lawmakers' pork-barrel projects approved in last year's budget, a total of about $190 million. But the vetoes haven't shut off the spending spigot quite yet.
State law allows the money from last year's budget to flow until Sept. 15. So nonprofits and local governments, who were banking on the money before Paterson's surprising vetoes, are making a dash for the cash before it's too late.
"We're hearing from groups all over that they are scrambling right now to get all their vouchers in and work completed," said Ron Deutsch, who heads New Yorkers for Fiscal Fairness, a group that works with non-profits. "Everyone's in scramble mode right now."
The stakes are high from some groups that rely on the member items to fund programs and, in some cases, to stay in business.
Assemblyman Marc Molinaro, R-Red Hook, said he doesn't oppose Paterson's vetoes of the member items, but the governor should have done it last year — before the groups were counting on the money.
"I have a concern about the governor vetoing dollars that have been awarded and, at the very least, were in the process of being contracted," he said.
Some groups said they have been waiting for reimbursements from member items pledged for their projects last year. Read more here.
Tuesday, August 17, 2010
GuideStar Offers: The Effect of the Economy on the Nonprofit Sector
More than 7,000 people responded to our June 2010 economic survey, which measured the impact of these difficult economic times on the nonprofit sector. Among respondents, nearly half were CEOs, executive directors, or presidents—our leaders in the nonprofit industry. The results are compelling:
Some 40 percent of participants reported that contributions to their organizations dropped between January 1 and May 31, 2010, compared to the same period a year earlier.
Eight percent indicated that their organizations were in imminent danger of closing.
Sixty-three percent reported a total increase in demand for their organization's services between January 1, 2010 and May 31, 2010, compared to the same period a year prior.
Read all of the survey's findings here, for free:"The Effect of the Economy on the Nonprofit Sector."
Some 40 percent of participants reported that contributions to their organizations dropped between January 1 and May 31, 2010, compared to the same period a year earlier.
Eight percent indicated that their organizations were in imminent danger of closing.
Sixty-three percent reported a total increase in demand for their organization's services between January 1, 2010 and May 31, 2010, compared to the same period a year prior.
Read all of the survey's findings here, for free:"The Effect of the Economy on the Nonprofit Sector."
Tuesday, August 3, 2010
2010 New York State Grand Rounds on the Abuse of Prescription Pain Relievers
September 20, 2010
9:00 a.m. – 10:30 a.m.
Room MS169
Albany Medical College
Live, Video conference and/or webcast
The streaming link is:
http://streaming.aanet.org/ramgen/amc/AMC_PRC092010.smil
Dial in participants will dial
1-866-719-1998
Pass code 800285.
Your phones will be muted during the panel presentations and will turned on when the panel is open for discussion.
If you have Codecs and want to be active participants via ISDN or IP, that can be arranged as well.
Please contact Joyce Davis with any questions you might have at:
518-686-0221 or jnadine@roadrunner.com.
2010 New York State Grand Rounds on the Abuse of Prescription Pain Relievers
Panel Discussion
Non-medical use of prescription pain relievers rose 111 percent between 2004 and 2008, according to a new study by the Substance Abuse and Mental Health Services Administrations (SAMHSA) and the Centers for Disease Control and Prevention (CDC).
In Rensselaer County 4 youth died between September 2009 and April 2010 from abusing prescription pain medications. This CME program is geared to assist medical personnel who prescribe prescription pain medications assure they are not abused by youth and adults.
The training will be offered in four venues: at the Medical College, by video conference and webcast live and an archive stream provided by the Adirondack Area Network. Participants in the webcast will be able to call in and ask questions during the presentation.
9:00 a.m. – 10:30 a.m.
Room MS169
Albany Medical College
Live, Video conference and/or webcast
The streaming link is:
http://streaming.aanet.org/ramgen/amc/AMC_PRC092010.smil
Dial in participants will dial
1-866-719-1998
Pass code 800285.
Your phones will be muted during the panel presentations and will turned on when the panel is open for discussion.
If you have Codecs and want to be active participants via ISDN or IP, that can be arranged as well.
Please contact Joyce Davis with any questions you might have at:
518-686-0221 or jnadine@roadrunner.com.
2010 New York State Grand Rounds on the Abuse of Prescription Pain Relievers
Panel Discussion
Non-medical use of prescription pain relievers rose 111 percent between 2004 and 2008, according to a new study by the Substance Abuse and Mental Health Services Administrations (SAMHSA) and the Centers for Disease Control and Prevention (CDC).
In Rensselaer County 4 youth died between September 2009 and April 2010 from abusing prescription pain medications. This CME program is geared to assist medical personnel who prescribe prescription pain medications assure they are not abused by youth and adults.
The training will be offered in four venues: at the Medical College, by video conference and webcast live and an archive stream provided by the Adirondack Area Network. Participants in the webcast will be able to call in and ask questions during the presentation.
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