IRS Nullifies Section 501(c)(3) . . . Issue #95 April 1 2014

Nonprofit Life & Style - By Susan Sanow - March 23, 2014

April 1, 2014 . . . Blue Avocado is in secret merger talks with the Red Cross, Greenpeace,Yellow Ribon Fund, Purple Heart Foundation, American Black Film Festival, and Brown University. "At last, there will be a place where wounded veterans can make films about college students eating guacamole in disaster areas," said a spokesman.

"You can fool some of the people all of the time," said circusman P.T. Barnum famously, "but you can only fool all of the people on April Fool's Day." Here are the winning entries in our contest for stories "impacting" the nonprofit sector today. - Susan Sanow and Jan Masaoka

IRS Announces Recall of Section 501(c)(3)

From Paul Sussman, Tenderloin Neighborhood Development Corporation, San Francisco

The Internal Revenue Service announced today the recall of Section 501(c)(3) of the Internal Revenue Code due to "unwieldy and inconsistent requirements" that can cause "extreme inconvenience, high operating costs, and in rare cases, insanity" among managers. The IRS promised to repair the problem as soon as possible, and offered nonprofit organizations subsidies to compensate for costs incurred in complying with the malfunctioning code section. The announcement stunned nonprofit leaders, but left financial markets seemingly unaffected.

Nonprofits See Benefits of Secession from U.S.

From Robyn Blackwell, United Way of Acadiana, Lafayette, Louisiana

Several nonprofit organizations are considering withdrawing from the United States and declaring themselves sovereign nations in order to apply for foreign aid and balance their budgets. Says one NPO executive, "Our board looked at the amount of money going to capacity building in foreign countries. Since grant funding has become more competitive, our board considered this to be a creative and viable fundraising opportunity. We're really thinking out of the box!"

Charity Navigator Closes

From Lee Taylor, Hayward, California

"We realized it's stupid to rank nonprofits based on a few unproven management indicators," said leaders. "We apologize for all the harm we've done to good nonprofits." When reached for comment, a nonprofit spokesperson said, "Ding dong the wicked witch is dead."

AFP Approves Hypnosis as Acceptable Fundraising Method

From Katie O’Daley

Always open to new possibilities, the Association of Fundraising Professionals (AFP) has approved hypnosis as a technique for fundraising. "We're all about results,” says the AFP spokesman. "Whatever it takes to part individuals with their money is what it's all about.  Getting money from foundation program officers remain a challenge. After all, it's not really their money."

Foundation Spends Down Without Giving Money To Kids' Foundations

From Kate Kawahara, MCOPED, Los Angeles

As more and more foundations announce they are spending down their assets, there has been praise from many corners of the nonprofit world. "It's great to see foundations recognizing the needs of today," said one nonprofit leader.

But a closer look reveals that most foundations that spend down do so by giving large portions to the foundations of their children. That's why it was headline news when the Ssenippah (happiness backwards) Foundation spent down its assets by giving it to poor people. "Giving a starving man a fish is an outcome," said the soon-to-be-former president. "He's got a million people trying to teach him to fish who don't realize that the lake near him is too polluted to fish in."

Participant Asks Actual Question at a Conference

From Lee Taylor, Hayward, California

A sleepy, passive audience was jolted awake at a session of last week's national conference of IS (Independent Statistics) when a participant asked a question. As is the norm, all the "questions" up to then had been either brief opinion speeches or slightly-disguised self-promotions. Panelists were too startled to respond at the time. "We never expected an actual question," said the moderator later. "This was truly a first for us."

If Someone Hands You a Blue Avocado, Make Blue Guacamole

From Ann Adrian

Through the power of genetic modification, Blue Avocado is delighted to announce that there are, in fact, blue-hued avocados headed to a Whole Foods near you!  Cause related marketing is in full swing with Whole Foods rolling out a special  promotion by inking a deal with blues legend BB King. Staffers at Blue Avocado will be trotting out a recipe contest and plans for Blue Avocado: The Cookbook. Whole Foods will do in store demos on the blue fruit, with staff clad in Blue Avocado t-shirts and passing out free slap bracelets.
 

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Winners and judges

Congratulations and thank you to our wonderful creative readers for the items considered for this special April Fool’s Day issue: Ann Adrian, Robyn Blackwell, Angela Goldstein, Lydia Green, Sarah Martinez Helfman, Kate Kawahara, Priscilla Martens, Katie O'Daley, Frank Resnick, Ann Rosenfield, Karen Sell, Paul Sussman, and Lee Taylor.

Winners have been invited to a campfire conversation with Rick Cohen from Nonprofit Quarterly and Blue Avocado publisher Jan Masaoka.

Thanks to the judges, too: Christina Dragonetti of the California Association of Nonprofits, Linda Fowells of Community Partners, Jeff Kost of Development Resources, Inc. (DRI), Gloria Rubio-Cortes of the National Civic League, Suzanne Vella of the Nonprofit Center Milwaukee, and Craig Weinrich of the Council of New Jersey Grantmakers.

Next issue of Blue Avocado: Our next regular issue comes out late April with articles on HR and transgender employees, a First Person Nonprofit on following a founder, the estimable Vu Le, and A Board Member's Guide to Overhead. See you soon! - Susan and Jan

 

Notes from the President

Pamela Davis, Volunteer President, American Nonprofits
Pamela Davis
Volunteer President
American Nonprofits

American Nonprofits and Nonprofits Insurance Alliance Group have been cooperating to determine how best to improve access to operating credit for 501(c)(3) community-based nonprofit organizations. During 2012, we evaluated various options. During 2013, we investigated the feasibility of creating American Nonprofits Federal Credit Union (ANFCU) (proposed). We accomplished several steps toward creating ANFCU including:

1)     Received preliminary field of membership approval from NCUA to include 501(c)(3) nonprofits, their employees, volunteers and stakeholders

2)     Conducted an extensive survey of likely members and received evidence of strong likely support

3)     Developed a business plan for the start-up and first 4 years of operation

At a meeting in late summer, interested nonprofit sector and credit union leaders expressed strong interest in, and enthusiasm for, ANFCU. Nevertheless, based...

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American Nonprofits was formed by a group of nonprofit sector leaders with a $100,000 grant from Nonprofits’ Insurance Alliance of California (NIAC). American Nonprofits will serve as a platform to address issues of finance, credit, strategy, and accountability. As a membership organization that welcomes both nonprofit organizations and individuals, we occupy the intersection of finance and strategy. We are a platform through which members can convene local and national discussions, initiate solutions, and collectively improve nonprofit finance (e.g. the credit union project below).
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American Nonprofits Federal Credit Union

Do you think nonprofits deserve fair access to credit and loans?
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Do you want to discuss and improve nonprofit strategy and finance?
Does it annoy you that big banks make profits from nonprofit customers?
We are forming a credit union specifically for the nonprofit community.

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To view the draft business plan for the proposed credit union: Draft Business Plan

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The founding of American Nonprofits as well as the credit union project is possible thanks to a $100,000 grant from Nonprofits Insurance Alliance Group, and an initial $25,000 grant from the Wallace Alexander Gerbode Foundation. American Nonprofits is currently seeking $10.5M in support of formation and capitalization of American Nonprofits Federal Credit Union. Please contact Pamela Davis to find out more about this campaign.

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