January 2020

Nonprofit Organizations Digest

5 min

Venable's Nonprofit Organizations Practice is pleased to share recent articles, presentations, and video-recorded webinars by our attorneys. This digest brings together some of our most interesting and useful materials, available for your use in tackling the difficult legal challenges facing your organization.

Notable Articles and Publications

Raising Revenue and Trimming Tax: A Nonprofit's Guide to Corporate Sponsorships

Payments from corporations to sponsor your conferences, events, or programs can be a win-win for both the corporation and your nonprofit. The corporation gets public recognition and a "halo" from its association with the nonprofit, and the nonprofit receives tax-exempt, unrestricted revenue. What's not to like?

IRS Issues Proposed Regulations on Nonprofit Donor Disclosure Rules

The continuing saga of donor disclosure on Form 990 for 501(c)(4) and 501(c)(6) organizations recently took another turn. On September 6, the IRS issued proposed regulations allowing affected nonprofits once again to stop disclosing their donors, and waived penalties against nonprofits that had not disclosed their donors in reliance on previous IRS guidance, even though that guidance was ultimately overturned by a federal judge.

DOL Unveils Final Rule Adjusting Overtime Pay Exemption Threshold at Last

On September 24, 2019, the U.S. Department of Labor (DOL) unveiled its long-awaited final rule under the Fair Labor Standards Act (FLSA) adjusting the overtime pay exemption threshold from $23,600 to $35,568. This increase is a critical change for the many nonprofit organizations with workers earning less than $35,568 but more than $23,600, as they may now have to pay such workers overtime.

Avoiding Fundraising Pitfalls: Keeping Your Nonprofit Compliant When Working with Paid Fundraising Professionals

These days, nonprofits seem to have a heightened awareness of how to leverage social media presence for fundraising. As novel technologies are being created to help make this work more seamless and effective, there are increasingly creative ways to reach out to the public and ask for support of nonprofits' missions. To launch these types of fundraising campaigns, as well as many of the old fundraising classics, nonprofit organizations will often hire individuals or companies to either help plan or manage a nonprofit's solicitation campaign, or actively solicit contributions directly on behalf of the organization. Both fundraising activities not only pose regulatory hurdles for the fundraiser, but also have compliance implications for the nonprofit organization in the engagement.

Internal Harassment Complaints: Five Mistakes Most Employers Still Make

An internal harassment complaint is a critical moment for an employer. The complaint presents an allegation of wrongdoing, which may lead to costly and time-consuming litigation. How the employer handles the complaint can impact workplace morale, increase the likelihood of a lawsuit or an administrative charge, and affect the defenses available to the employer.

'Tis the Season: Act in Time or Your Nonprofit Will Say Goodbye to Any DMCA Safe Harbor Protection from Copyright Infringement Liability

Do you have members posting content on your blogs, supporters sharing photos on your website, or any other third parties providing content directly to your website? If so, you need to renew your Digital Millennium Copyright Act (DMCA) Designated Agent designation with the Copyright Office. Any nonprofit that may have previously qualified for the safe harbor from liability for copyright infringement under Section 512 of the DMCA will lose the ability to claim this safe harbor if the nonprofit does not renew its designation of agent within three years of the last online filing (or amendment). This is coming up soon, assuming your nonprofit did this correctly between December 1, 2016 and December 31, 2017. Nonprofits are not immune from copyright infringement liability simply because of their nonprofit status.

Demonstrating a Reasonable Cybersecurity Program Through a Strategic Risk Assessment

The privacy and cybersecurity legal landscape is constantly shifting, but one important principle remains unshaken: the requirement for companies to implement and maintain "reasonable" security programs. At both the federal and state levels (including the soon-to-be-enforced California Consumer Privacy Act (CCPA)), companies have long been held to a standard of reasonableness in their protection of personal information and other sensitive data. Although "reasonableness" may seem vague, guidance may be gleaned from regulatory enforcement actions and other statements, and from standards-setting bodies. Under any standard, the foundation of a reasonable security program is a comprehensive risk assessment. A security risk assessment is vital, and companies should undertake assessments in a defensible, strategic fashion.

Election-Year Tips for Nonprofits: Employee Participation in the Political Process

We may still be a year out from the next general election, but until the polls close on Tuesday, November 3, 2020, politics will be inescapably in the air—and in the workplace. Employees will be talking, sometimes arguing, and sometimes participating in one campaign or another. Prudent nonprofits should take note of what they may be required to do, or are prohibited from doing, about their employees' participation in the electoral process.

Congress Repeals Nonprofit Parking Tax; Simplifies Private Foundation Tax; and Provides Special Treatment for Disaster Relief Donations

The Taxpayer Certainty and Disaster Tax Relief Act of 2019 (the "Act"), signed into law on December 20, 2019 as part of a spending bill to fund the government through September 2020, repeals the notorious "nonprofit parking tax." The Act also simplifies the private foundation excise tax on investment income and provides special treatment for disaster relief donations to public charities.

Save the date: Venable's monthly luncheon and webinar will return on January 22, 2020 to review the rules of political participation for nonprofit organizations.