Board manuals — A guide to your galaxy

Like an employee handbook, a board manual familiarizes readers with an organization’s policies and procedures, giving them information at their fingertips. A manual can introduce board members to the nonprofit’s reason for being and way of doing things. It can detail who has particular responsibilities, and prepare board members to be effective spokespeople for the nonprofit. This article describes what’s essential to include in a manual, and what is simply desirable.
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Doing the right thing — Avoid excess benefit transactions

One way to lose tax-exempt status is to ignore the private benefit and private inurement — also known as excess benefit — provisions of the Internal Revenue Code. These rules prohibit an individual inside or outside a nonprofit from reaping an excess benefit from a transaction by the organization. Excess benefits can take many forms, such as excessive compensation, favorable sales of assets, below-market property rental and lending money. Being knowledgeable about such transactions involves understanding such concepts as private benefit and private inurement, and knowing board members’ duty of care and the consequences of violations.
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Set your sights on planned giving

In this down economy, smart charities are focusing their efforts to bring in major gifts from their wealthiest donors. That’s because these donors have long planned to leave part of their estate to a favorite organization, and most will follow through on their intentions. There are three planned giving arrangements that are especially popular, and board members and other staff members should be able to discuss their characteristics with prospective donors. To assist them, there are software products that do everything from creating elaborate marketing presentations and illustrating gift scenarios to crunching numbers and generating contracts.
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News for Nonprofits

Items in this issue address the danger of charities indulging in political activity; an extended deadline for putting in place a written plan to satisfy IRS regulations for a 403(b) plan; and how many smaller nonprofits might lose their tax-exempt status if they don’t file a Form 990-N.
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