Friday, April 23, 2010

One-Fourth of Nonprofits Are to Lose Tax Breaks

The NY Times reported that As many as 400,000 nonprofit organizations are weeks away from a doomsday.

At midnight on May 15, an estimated one-fifth to one-quarter of some 1.6 million charities, trade associations and membership groups will lose their tax exemptions, thanks to a provision buried in a 2006 federal bill aimed at pension reform.

“It’s going to be an unholy mess once these organizations realize what’s happened to them,” said Diana Aviv, president of the Independent Sector, a nonprofit trade group.

The federal legislation passed in 2006 required all nonprofits to file tax forms the following year. Previously, only organizations with revenues of $25,000 or more — or the vast majority of nonprofit groups — had to file.

The new law, embedded in the 393 pages of the Pension Protection Act of 2006, also directed the Internal Revenue Service to revoke the tax exemptions of groups that failed to file for three consecutive years. Three years have passed, and thus the deadline looms.

Read more here.

Thursday, April 15, 2010

Follow Up Article: Southern Tier Celebrates! shutting down; fate of First Night unknown

The Press & Sun-Bulletin followed up with another article today. As the article relates:

A number of factors led Southern Tier Celebrates! to shut its doors, its board chairman said today.

Finding funding for general operating support was difficult. Tough economic times has meant less available money from foundations and corporations, said board chairman Mark Bowers.
The board is going to look for alternatives to keep the organization's work going, especially First Night Binghamton, which drew 10,000 people last year, he said. But as of now, the future looks unlikely.

At a farewell press conference, the board thanked the many people -- from volunteers to foundations -- who aided the nonprofit for the past eight years.

STC had raised $160,000 to support its events and operations, Bower said. The group's budget was $414,000.

The main reason for the closing: the organization apparently relied too heavily on state funding that is now drying up. Read more here.

Thoughts: The article points out that the organization was encouraged to address their complete dependence on NYS funding. This is an unfortunate development, but an example for boards and other organizations to learn from and use as a wake up call.

Have your own thoughts? Share them here.

Wednesday, April 14, 2010

Southern Tier Celebrates! shuts its doors

The Press & Sun-Bulletin reported that Southern Tier Celebrates!, a nonprofit that puts on the popular First Night Binghamton, will close its office for day-to-day operations starting Friday.

In a release, the arts group cited the loss of state funding. In addition to the New Year’s Eve event, STC puts on Pops! In The Arena, Latin Fest and the Brown Bag Lunch Series in Binghamton.
Executive Director Lesley Tillotson declined comment on how STC’s events would be affected.

The group released the following statement. Read more here.