On this episode we’ll share some tips for 501(c)(4) organizations, those nonprofits the IRS calls Advocacy or Social Welfare Organizations. Whether your public charity has an affiliated 501(c)(4) or you work for a stand-alone 501(c)(4), these nonprofits must provide the IRS and the public with their financial and programmatic information annually. And we’re going to talk about how c4s can comply with the IRS requirements, some of the new developments that allow for protection of donor disclosure, and some of the information we, the public, can glean from these reports. 

Attorneys for this episode:  Quyen Tu, Tim Mooney, and Leslie Barnes 

Key Takeaways: 

• 501(c)(4) with annual gross revenue over $50,000 must file an information return with the IRS – either a Form 990 or Form 990 EZ. 
• Starting with FY 2020 annual returns, 501(c)(4) organizations are no longer required to disclose their donors to the IRS or public. 

• 501(c)(4) organizations must still provide copies of certain financial documents to the public upon request.  
•  Don’t forget other reporting requirements-state and federal lobbying and campaign finance requirements  
• These rules apply to 501(c)(5) and 501(c)(6)s as well 

Resources:   

• Give Me Your 990 
• 501(c)(4) Reporting: Where Are Donors Disclosed 
• IRS website: Public Disclosure and Availability FAQs  
• IRS Instructions for Schedule C, Form 990 
• Technical Assistance Hotline number 1-866-675-6229 (866-NP-LOBBY) or email us advocacy@afj.org or fill out our request form here. 

On this episode of the pod, we’re going to walk you through the types of information you can get from a 990. You’ll hear how that information is helpful to a variety of individuals including: a new Executive Director, board members, the press, staff, job applicants, donors, and more. 

Our Attorneys for this Episode 

• Jen Powis
• Leslie Barnes
• Quyen Tu 

Shownotes 

• Why nonprofits are required to publicly disclose certain legal and financial information. 
• The different kinds of Form 990s including: 
  • Form 990 
  • Form 990 EZ 
  • Form 990-N 
  • Form 990-PF 

• When are Form 990s due? 
• What are the penalties and fines for not filing?   

• What can you find in a 990? 
  • Identity, Tax Status, and Tax Year 
  • How Much Income Did the Filer Receive and From What Sources? 
  • How Did the Filer’s Total Expenses Break Down?  
  • What Can You Tell from Net Assets? 

• Number of employees and board members, organization’s website, and EIN  
• What Kinds of Programs Does the Filer Run and How Much Does It Spend on Them? 
• Good Governance – Conflict of Interest, Whistleblower, Record Retention and Compensation Policies 
• Who Are the Filer’s Board Members, Officers, Key Employees, and How Much Does Its Top Staff Get Paid?   
• Did the Filer Initiate Some New Activity, Change Its Processes for Governing or Engage in Any Excess Benefit Transactions? 
• Did the Filer Engage in Any Self-Dealing Transactions During the Year?  
• Does the Filer Lobby? 

• When nonprofits must provide copies of financial documents to the public 
  • In-person requests 
  • Requests in writing 

• Charges for copying and mail must be arranged in advance
• Fines for noncompliance 
• Filers who share their 990s on their website are not obligated to produce copies upon request 

 As a reminder, this episode is just about the tax filing to the federal government (the 990) at the end of your fiscal year. Each state may also require a nonprofit public charity to file other types of forms, perhaps a copy of the 990, or some other tax filing. So make sure if you’re a staff person that you work with your bookkeeper to understand all the end of the year filings you need to provide.  

Resources  

• Guidance on how to complete a Form 990 from the IRS 
• Give Me Your 990  
• Keeping Track: A Guide to Recordkeeping for Advocacy Charities 
• Where to look for Form 990s:  
  • Nonprofit Explorer by ProPublica 
  • GuideStar  
  • IRS 
• Apply for an Employer Identification Number (EIN) Online 

On this episode, we begin looking forward to 2022 and what is sure to be an exciting year to come. Whether your nonprofit is gearing up for midterm elections, legislative advocacy, or administrative activism, there are several steps you can take to prepare your team NOW. That is why we present you with our TOP 10 nonprofit New Year’s Resolutions. 

Our Attorneys for This Episode: 

Natalie Ossenfort  Tim Mooney  Leslie Barnes 

Show Notes: 

1. Schedule your election season advocacy training now. While midterm elections happen later in the year, candidates are launching their campaigns, and primary election season is gearing up. Make sure your staff is ready by training them on how your nonprofit can engage with candidates and voters while remaining in compliance with state and federal law. 
2. Make sure you have an election season policy, and have your staff and Board members review and sign it. Many nonprofits are perfectly situated to get out the vote and pursue important policy agendas, but these activities can trigger conversations that implicate nonprofit election season advocacy rules. By having a policy (and sticking to it), you create a layer of protection for your organization as it confidently moves into 2022. 
3. Build in accountability advocacy for your (c)(3) or (c)(4) for year-round effectiveness. Nonprofits can hold their elected officials accountable for how they serve their constituents. There are a variety of activities in which nonprofits may engage to remind legislators and elected officials that their issues matter, educate constituents about officials’ positions and actions, and demonstrate to officials that their votes will not go unnoticed. 
4. Have a 501(c)(3) and a 501(c)(4)? Get set up to grant unused lobbying capacity from the (c)(3) to the (c)(4) at the end of the year with our brand-new guide – Maximizing Your Advocacy! Why? Lobbying can count as one of a (c)(4)’s primary purpose activities, helping it to maintain the required balance between nonpartisan and partisan (secondary activity) work. 
5. Prepare to educate candidates and political parties on your issues. An election year is a perfect time to capitalize on any heightened interest people have in the issues important to your communities. While 501(c)(3)s cannot provide singular research, strategy, or support to one candidate or political party, they can use this opportunity to educate candidates in a nonpartisan manner and even influence candidate and political party platforms.  
6. Resolve to support democracy in 2022. The IRS permits 501(c)(3) nonprofits to engage in charitable activities, including nonpartisan activities that support democracy, expand the electorate, & encourage civic engagement provided the activities further the organization’s mission. Determine if your state’s election laws have changed for registering or voting, and build voter education and outreach into your advocacy work. 
7. Make plans to brush up on your knowledge of state lobbyist registration and campaign finance reporting requirements. Depending on what level of government you are working to impact, you may trigger reporting requirements at the local, state or federal levels. These laws could require you to track both your administrative and legislative activities and any expenditures you make on ballot measure campaigns (in addition to independent expenditures if you happen to be a (c)(4) working to influence candidate elections). Luckily, we have a wealth of state law resources on our website including a NEW practical guidance lobbying series. 
8. Take stock of your capacity to engage in advocacy, and embrace your strengths (and weaknesses) as an organization to maximize your impact at the legislature and beyond. Where should you start? Our Advocacy Capacity Tool is a good place to begin. By evaluating your goals, plans, strategies, partnerships/networks, operations, and more, your nonprofit can put itself in the best position for advocacy success. 
9. Get social! (on social media that is). Social media offers nonprofits an opportunity to amplify their advocacy to reach communities far and wide. Whether your organization is building its presence on IG, TikTok, Twitter, Facebook, or elsewhere, make use of online advocacy as a tool to expand your supporter base and activate public policy campaigns. Just remember that tax code nonprofit advocacy rules will still apply, and check out our guide to Public Policy in the Digital Age to remain in compliance. 
10. Take time for yourself. Just because you work for a nonprofit or serve on a nonprofit Board, that doesn’t mean that you can’t step away from time to time to re-center and engage in the activities that bring you happiness and joy. Just like the last couple of years, 2022 is almost certain to bring with it its own unique set of challenges. Stay focused, stay diligent, but also keep motivated by taking time for YOU. 

Resources: 

Accountability Advocacy for 501(c)(3)s 

Accountability Advocacy for 501(c)(4)s 

Is It (c)(3) Compliant? – Decision tree for election-year activity 

Advocacy Capacity Tool 

Maximizing Your Advocacy: 8 Steps for Granting Unused Lobbying Capacity from a 501(c)(3) to an Affiliated 501(c)(4) 

Maximizing Your Advocacy Supporting Documents  

Public Policy in the Digital Age: The Law of Online Lobbying & Election-related Activities 

Sample 501(c)(3) Organizational Policy for Election Season