In an op-ed he wrote last week for The New York Times (Who Will Watch the Charities?), David Callahan claimed that the charitable sector is like the “Wild West” when it comes to oversight. After reading Callahan’s piece, you could not be faulted for walking away thinking that little is being done to regulate the sector and punish wrongdoing. The reality, however, is something quite different.
Here in Florida, our state’s charity regulators have been taking serious action to crack down on fraud and other misdeeds in the charitable sector, working in partnership with philanthropic and nonprofit leaders. Continue reading
Florida Philanthropic Network has contacted key members of Florida’s congressional delegation to express concerns about a proposed Form 1023-EZ from the IRS and to request an opportunity for input from the nonprofit and foundation communities, while also expressing our general support for efforts to simplify tax forms and streamline the application process.
The Form 1023 is filed at the start of a new nonprofit organization. FPN agrees that the existing Form 1023 is cumbersome and is in need of some improvement, so we understand the good intentions of the IRS to simplify the form and manage a backlog of applications by developing a streamlined application process for smaller organizations. But we are concerned that the 1023-EZ’s two-page checklist could increase opportunity for fraud and exacerbate the proliferation of ill-prepared nonprofits.
For example, the current Form 1023 application process requires an applicant to submit its organizing documents, but the Form 1023-EZ just requires the applicant to check off boxes to indicate that its organizing documents contain various critical provisions. While this change will certainly speed up the application process, it also eliminates key evidence that the IRS uses today to perform its appropriate due diligence. Continue reading
As Congress reconvenes for the year-end lame duck session to address a number of critical tax and spending issues related to the fiscal cliff, there are reports that a cap on the value of the charitable deduction is under consideration as a potential short-term revenue solution. Although these discussions deal with myriad complex issues, here are some key reasons why capping the charitable deduction is not a good idea for our communities and our state: Continue reading