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May 08, 2006

The amount of (c)(3) political activity is disturbing

From AccountingToday: IRS, charities clashing over possible political activities

"According to IRS Commissioner Mark W. Everson, a 'disturbing amount of political intervention' was carried out by charitable organizations during the 2004 election year, causing the IRS to address the need for clarification and enforcement of the exempt organization rules regarding political campaign intervention."
Here's sound advice for anyone in charge of governance at a (c)(3): Controls for volunteer leaders:

"The real question is, how do you distinguish what is political from what isn't? Then, assuming that you are able to distinguish that, how do you monitor the activity?" said Richard Larkin, national technical director for nonprofit organizations at BDO Seidman. "You've got people, some of whom are volunteers, some of whom are paid - they're running around the country doing things - how do you ensure they don't do something inadvertently?" he continued. "You have to have controls in place."

I have a feeling many foundation executives aren't thinking about this. We have a board member who serves on two other boards. We often don't know, or even think to ask, if our volunteers serve on other boards. This isn't unique. If you have a foundation board member who also volunteers for a political campaign, you may have a problem.

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