Great Ideas Using Your 990 As A Marketing Tool Eileen Johnson and Jonathan May Attorneys Whiteford Taylor & Preston LLP February 21, 2009 Connecting Great Ideas and Great People
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Great Ideas
Using Your 990 As A Marketing Tool
Eileen Johnson and Jonathan MayAttorneysWhiteford Taylor & Preston LLPFebruary 21, 2009
Connecting Great Ideas and Great People
Using Your 990 as a Marketing Tool
Why?
It’s not just a tax return any more
More people will read the 990 than your annual report
Access to 990s
On-Line GuideStar® and other sites
Time lag in posting No limit (yet) to number of years posted
Public disclosure requirement Your association’s website Inspections and providing copies
Who Is Looking At Your 990? Current and Potential members Prospective board members and employees Foundations Major donors Your competition State agencies Reporters Watchdog groups – Charity Navigator Plaintiffs’ lawyers!
Why Are They Looking At Your 990?
Decision to join Funding decision Regulation and tax enforcement Looking for a story Evaluating your association Looking for benchmarks Information gathering
Activities Compensation
GuideStar® Reports
What do users see when they go to GuideStar®? General Information (Your story!) Financial and Compensation Information Mission & Programs Goals & Results Form 990
GuideStar® Reports
Associations on GuideStar Updating your GuideStar report
information You control the content
Exception: information pulled from 990s Info to update
Mission statement, goals Recent programs and successes
No limit on update frequency
Redesigned 990
Enhanced Disclosures and Reporting: Compensation Governance and Policies Related Party Transactions
Marketing opportunities: Page 2 – top 3 programs by revenue expenditure Schedule O – Supplemental Information More space throughout core form Schedules
Who Prepares or Reviews Your 990?
Finance department staff
Outside accountant
Board Finance or Audit Committee
Legal counsel
Development department staff
Sticky Wickets
Compensation – Directors and Executives
Governance and Corporate Policies Independent Contractors/Vendors Program Expenses Fundraising Expenses Lobbying Unrelated Business Taxable Income
Director Compensation
Travel expenses Spouse travel Honoraria Other expense reimbursements Per diems, expense accounts, etc. Intermediate Sanctions
Executive Compensation
Salary All benefits Travel expenses Spouse travel Honoraria for outside activities Expense accounts Intermediate sanctions
§ 501(c)(3) and (c)(4)
Governance
Members Board composition Family and Business Relationships Committees Affiliates
Corporate Policies
Conflicts/Disclosures Compensation/Expense
Reimbursements Whistleblowers Document Retention and Destruction Joint Ventures
xpenses
Independent contractors/vendors Value received = dollars paid Sweetheart deals No conflicts with staff or board
xpenses
Program expenses Program descriptions should reflect
mission Proportion of program expenses to
overhead Explain any new program investments Explain program terminations
Fundraising Expenses
Describe value of fundraising activity Highlight any cost effective or
productive methods Explain any unusual expenditures- Capital campaign- Planned program area growth
Lobbying
The lobbying myth Relationship of lobbying activity to
the organization’s mission Reporting 501(c)(3) vs. 501(c)(6) Which test?
501(h) election or “substantial part” test
List rentalList rental Advertising incomeAdvertising income Services for affinity programsServices for affinity programs Rental income with services Rental income with services Joint ventures with for-profitsJoint ventures with for-profits Trade show incomeTrade show income
Unrelated Business Taxable Income Issues
Relationships
Relationships with other organizations (exempt or nonexempt) Association/Foundation relationship Other supporting organizations Other (c)(3)s, (c)(4)s and (c)(6)s For-profit subsidiaries Joint ventures with for-profit entities
Explanations, Please!
Explain any “bad news” Don’t hide it How will you fix it?
Explain any unusual expenses Cost saving measures New program start up costs
Seize the Opportunity
Describe in detail your association’s Mission Major accomplishments for the year New activities and programs Plans for the future
Don’t just repeat the same text year after year
CONTACT INFORMATION
Eileen JohnsonCounsel, Whiteford Taylor & Preston LLPPhone: 703-280-9271E-mail: [email protected]
Jonathan MayPartner, Whiteford Taylor & Preston LLPPhone: 410-347-8781E-mail: [email protected] Websites: www.wtplaw.com
Connecting Great Ideas and Great People
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