November 2023

Nonprofit Organizations Digest

4 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

SECURE 2.0 Roth Catch-up Requirement Delayed until January 1, 2026

On August 25, 2023, the IRS issued guidance delaying the SECURE 2.0 requirement for age 50 catch-up contributions until January 1, 2026, and clarified rules for Roth catch-up based on prior-year compensation. The IRS plans to issue further guidance on these matters, impacting plan sponsors.

OMB Pre-Releases Much-Anticipated Rewrite of the Uniform Guidance

On December 26, 2013, the Office of Management and Budget (OMB) introduced the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, or "Uniform Guidance." Now, nearly ten years later, OMB plans to release a significant rewrite of this regulation. Key proposed changes include increased thresholds, alignment with Federal Acquisition Regulation (FAR) standards, considerations for "veteran-owned business" in procurement, and updated cost principles and audit requirements.

What Nonprofits Need to Know About State Data Privacy Laws

In 2023, eight more states passed comprehensive data privacy legislation, impacting nonprofits. State privacy laws vary in applicability to nonprofits, affecting data governance, consumer rights, and compliance requirements. Learn how nonprofits can navigate these regulations.

Highlights of the 2023 NAAG/NASCO Annual Conference

The National Association of Attorneys General (NAAG) and the National Association of State Charity Officials (NASCO) held their annual conference, addressing charity-related issues. Highlights included regulatory priorities, recent enforcement actions, governance lessons from popular culture, and fostering purpose-driven boards, focusing on nonprofit governance and compliance.

New York Court Dismisses Challenges to CVS’s Donation Checkout Program

Customer donation programs are effective fundraising tools but face legal challenges. A New York court dismissed a lawsuit against CVS over its donation checkout program supporting the American Diabetes Association. While the case was dismissed, companies must ensure compliance and transparency in such programs, considering state and federal consumer protection laws and regulations for clear and prominent disclosures. Online donation programs also have evolving compliance obligations, as seen in California's new law regulating charitable fundraising platforms.

Recent Events

Nonprofits and Artificial Intelligence: Important Legal Considerations Amid Ongoing Developments

Many nonprofit leaders are seeking ways to harness the new tools brought about by generative artificial intelligence (AI) functionality. Before leaping into the brave new world of generative AI, however, careful consideration should be given to the potential legal, contractual, and regulatory complications that business uses of AI can present. Can professionals ensure accuracy when using AI tools? What should a nonprofit do (or not do) to maintain control over its valuable data and content? How should staff and volunteers be instructed to manage privacy risks?

Enforcing Association Codes of Ethics Effectively While Minimizing Legal Risks

Nonprofit membership organizations have been increasingly active when it comes to regulating conduct and ethics of members, both in their professional roles and in connection with association activities. When done properly, this effort can serve to enhance the value of membership and the public impression of the association’s industry or profession. However, this practice can carry legal risk if the proper procedures are not followed.

Cause-Related Rules, Trends, & Best Practices to Maximize Impact

Effectively marketing an organization’s charitable giving efforts requires not only the application of creative advertising principles, but an underlying familiarity with applicable responsibilities under federal, state, and local laws. In this session, participants learned how various legal requirements will affect how a company structures its next giving campaign, what it says to the public about the campaign, and where it might trigger regulatory obligations as a result.

A New Frontier, DEI Committees, and Their Counsel

Increasingly, nonprofit corporations are strengthening diversity, equity, and inclusion (DEI) systems and practices. Boards have established or are establishing DEI committees and rely on in-house counsel to support the work of requisite oversight. As a result, nonprofit corporate counsel are examining novel topics within a developing area of practice to include corporate and employment law considerations.

Family Matters—Managing Risks with Different Entities Under One Umbrella

Managing and working with affiliated entities—with different tax statuses and different missions—is seldom easy. How can entities share employees and resources when one entity wants to engage in issue advocacy, political activity, or other activities that may be restricted or prohibited if attributed to an affiliate? Executives and counsel must grapple with maintaining the requisite separateness among the related entities while maximizing the efficiencies that should go along with having multiple entities under one umbrella.