Other stuff

A few of the ways charities can create a requirement for reporting on foreign activities

Image courtesy of DollarPhotoClub.com.
An ocean of paperwork. Image courtesy of DollarPhotoClub.com.

Doing ministry overseas can generate several requirements to file reports with the IRS that you had no idea even existed.

CliftonLarsonAllen provide some background on IRS Foreign Reporting Requirements for Nonprofit Organizations.

Here is their technically worded description of the most common situations:

  • Transfers of property to, or ownership interests in, foreign entities
  • Financial interest in, or signature authority over, foreign bank, securities, and financial accounts
  • Certain payments of U.S. source income to foreign persons

I will mention just a few of the situations they describe which could trigger a reporting requirement. Keep in mind there can be some serious penalties for missing these reports. Serious, as in $10,000 per filing year, assuming the IRS doesn’t allege the failure to file was willful. If they raise that allegation, penalties can get really ugly. Also keep in mind that if you missed one of these reports once, you probably missed it all the years for which the statute of limitations is open.

Control of overseas affiliate

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Jim Ulvog

“No one wants to be a beggar for life” – “Poverty, Inc.”

consequences facing facts and accept consequence of acts take and face responsibilities
photo courtesy of DollarPhotoClub.com

Poverty, Inc. is a documentary from a group by the same name. You can see the trailer at those links.

The way we, that is, the developed world, are doing international development is broken. One comment in the movie from an economist in Africa tells the story:  emergency relief is the standard model used for decades to end poverty and suffering.

That isn’t working.

As another speaker says:

“No one wants to be a beggar for life”

I read two reviews of the movie, one from a center-left perspective and one from a center-right perspective. Both praise the movie and share in the criticism of big aid.

The documentary won several awards at a libertarian film festival and then won best documentary at a progressive film festival. Imagine that!

Guess which of the following two columnists made this comment?

It’s almost like anybody with a populist outlook and, you know, a brain between their ears and a heart between their shoulders, has got to look at our current system of international development and aid and say there’s something deeply wrong.

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Jim Ulvog

If your NPO does work overseas, might be worth pondering the risks again

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

If your ministry recruits staff and sends them overseas to carry out your programs, you might want to spend a bit more time thinking about the risks your staff face.

A court ruling in Norway found a charity liable for the physical injuries, psychological harm, and aftercare of a staffer who was kidnapped in Kenya and held four days before being rescued. The staffer was shot in the leg. The incident understandably left this staffer with post-traumatic stress disorder. Another staffer was killed.

The court noted the organization treated this and other staff persons as troublemakers because they complained internally about the lack of aftercare.

The court found the Norwegian Refugee Counsel guilty of gross negligence and liable for damages equal to US$500,000. The court also criticized the follow-on security investigation and found that NRC improperly accessed the risks that staff faced. The court noted other staff persons were upset with their aftercare.

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Jim Ulvog

The underside of the charity world

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

Bad stuff is everywhere. Call it evil if you wish. Or simply sin.

The underside of the charity world needs to be addressed and dealt with. Here are two articles, one secular and one spiritual, on how to deal with bad stuff.

Also a general article on complexity. I have been holding all three articles for a few months. Time to post them.

On dealing with bad stuff

7/21 – New York Times – Denver Church’s Security Efforts Highlight New Reality – Check out the five-minute video. It is superb.

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Jim Ulvog

My brief blogging break is over

San Diego - Sunset over Coronado Island across the harbor - Photo by James Ulvog.
San Diego – Sunset over Coronado Island across the harbor – Photo by James Ulvog.

I have not been posting much lately, as you likely noticed.

Took a week of vacation for our fourth visit to North Dakota. Worked a week in the office on several deadlines. Then took another week of vacation in San Diego. Considering the time it takes to get ready for vacation, I have not had much time for blogging for about four weeks now.

San Diego skyline from Coronado landing 10-4-15 - Blurred photo by James Ulvog.
San Diego skyline from Coronado landing 10-4-15 – Blurred photo by James Ulvog.

In addition, I’ve been on a fairly stringent news diet for three weeks. Not a complete fast, just a diet. That has also been quite refreshing. I am still quite aware the world is falling apart even through I don’t know much of the current details.

I’m back in the office now so can get back into my routine. Plan to resume blogging at my regular pace.

So, stay tuned!

Jim Ulvog

Case study in dealing with molestation accusation in a local church

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

Church Law & Tax has a long (3,600 word) article providing a detailed case study of how one church handled an accusation of improper (and illegal) contact between an adult youth worker and a minor in the church.

All pastors and church leaders ought to read the article and file it away.

The article explains how the situation was discovered, evolved, and how the church handled each stage of the crisis.

The most valuable part of the article for me is an attorney discussing the situation at each stage and assessing how the church responded at each step.

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Jim Ulvog

A few more labor law issues to keep your eyes on

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

Here are a few changes in labor law likely in the near future and a couple more issues on the distant horizon.

Nearest are proposals to make more people subject to overtime pay and classify more people as employees instead of independent contractor.

You can find more info from Accounting Today:  Labor Department Driving Changes Accountants Need to Know About.

Overtime

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Jim Ulvog

On Unintended Consequences – giving away consumer goods and banning plastic bottles doesn’t do what you would expect

 

consequences facing facts and accept consequence of acts take and face responsibilities
Image courtesy of DollarPhotoClub.com

One frustrating feature of life is that things are so complex. Doing something to help people or make things better can have unrelated impacts that offset any benefit.  Sometimes doing good stuff can make things worse.

That is called unintended consequences. Here are two more examples.

Giving away free consumer goods may not make life better for poor people…

7/23 – Vox – Buying TOMS shoes is a terrible way to help poor people – Add this article to the vast and growing body of articles explaining that the buy-one-give-one-to-poor-people way to end poverty is doing little to help and might be doing a lot of harm.

Amongst the many points made: (more…)

Jim Ulvog

“What if small churches aren’t a problem to be fixed?” Encouragement for pastors of small churches.

There are opportunities for ministry with a congregation that can fit inside this building that aren't possible in a megachurch. Photo courtesy of DollarPhotoClub.com
There are opportunities for ministry with a congregation that can fit inside this building that aren’t possible in a megachurch. Photo courtesy of DollarPhotoClub.com

Christianity Today is Introducing “Pivot”. Their comment:

We’re rolling out a new blog with a big mission: to equip and inspire small church pastors.

So much of the literature and resources for local churches is focused on big churches. Built into most of the discussion is the idea that you have to grow. There’s something wrong if you are the same size this year as last year. The larger the attendance, the better the church.

Where does that leave pastors with a flock of 50 or 125 faithfully in the pews each week?

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Jim Ulvog

Employee vs. Independent Contractor – Dep’t of Labor proposal would changed definition of employee

 

Employee time sheet
Picture courtesy DollarPhotoClub.com

In response to the rapid growth of what is called the “gig economy” or freelancers, the Department of Labor has issued an interpretation which tightens the definition of who is an employee.

I think it would be wise for the finance team and leadership of charities to look at this issue.

While this is aimed at companies like Lyft, Uber, Airbnb, and any other tech company that pays freelancers on an ad hoc job-by-job basis, it clearly applies to traditional businesses. This applies to charities.

It might be wise to think about how your charity is handling the independent contractor issue.

The Wage and Hour Division of DOL issued Administrator’s Interpretation 2015-1 (access to this copy provided by the WSJ.)

The Wall Street Journal explains Employees vs. Independent Contractors: US Weighs In on Debate Over How to Classify Workers.

The WSJ article explains that DOL believes many independent contractors should be moved to employee status. The DOL believes the definition of employee is far broader not only than what many employers believe but is even broader than what many courts have ruled.

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Jim Ulvog

The problems with celebrity activism? Let’s start with unintended consequences.

Amongst the long list of challenges getting in the way of actually helping the people you want to help, two repeatedly jump out at me.

The first challenge is to avoid unintended consequences. Because humans are so complicated and react to changes around them, you will frequently find that taking one action has some unexpected consequence that undercuts the help you’re trying to provide.

Another challenge is finding out what the people you are helping might actually know about the issue. The people living with the struggle every single day might have some insight that could have helped you while you were in your office figuring out how to fix their problem.

Check out the following article on 7/12 by Georgia Cole, Ben Radley, & Jean-Benoit Falisse writing at Quartz – What’s missing from celebrity activism in Africa? The people.

My summary:  the article explores the long list of problems with celebrities picking a cause, choosing the one single perfect solution that will fix everything, and advocating for their personal preference of policy action.
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Jim Ulvog

Tips for churches: Time to get a new credit card reader. A tool for document retention timelines.

If you are using a credit card reader in your church, time to get a new one. A tool to help with setting up timelines for document retention. Also, pastors, please guard your heart.

Guard your heart

To all the dear pastors devoting your life to leading us sheep: Guard your heart.

6/21 – Christianity Today – Tullian Tchividjian Resigns after Admitting ‘Inappropriate Relationship’

Guard your heart. Please.

Get new credit card reader before October 1

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Jim Ulvog

Another cancer charity under investigation; a summarized 2013 income statement

The Wall Street Journal reports an additional Cancer Nonprofit Investigated by Tennessee Secretary of State’s Office.

If you have been following the suit by the FTC and all 50 AGs against a group of four cancer charities, it will be worth checking out the article to learn another charity is under investigation in its home state.

The key leader of this organization has a familial link to the four in the FTC investigation. The article links this charity to those four.

Not much detail in the article about the particulars of this investigation. As to the general direction, you can get some hints from this quote in the article:

“They appear to follow a pattern similar to the groups that were part of the [FTC] claim,” said CharityWatch President Daniel Borochoff.

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Jim Ulvog

Thoughts on jumping into cloud computing

Bruce Schneier has a series of articles that ponder the risks and rewards of jumping into cloud computing. That is the concept of storing your data and computing power with an on-line service provider.

Some things to consider:

6/10 – Schneier on Security – Should Companies Do Most of Their Computing in the Cloud? (Part 1) – The answer is complicated. The efficiencies and cost savings are real and a major advantage.

On the other hand, there may be legal issues, such as your government creates far higher privacy standards than the country where your data will be stored or another country places severe restrictions on data you store there. (more…)

Jim Ulvog

Details on FTC enforcement action against four cancer charities – 2

This is the second in a series of posts diving deep into the detail mentioned in the complaint by the Federal Trade Commission and all Attorneys General against four named cancer charities.

My goal is to highlight some of the information that I think is of particular interest to the wider nonprofit community.

I perceive the attention paid to the complaint is drying up. Before discussing the FTC complaint, want to mention one interesting article of late:

6/1 – Suzanne Perry at Chronicle of Philanthropy – $187-Million Fraud Case Puts Charities on the Defensive – Article has reactions to the FTC and 50+ AGs going after the cancer charities that were so far over the line.

My description of the comments are they range from wondering what took the regulators so long to whether this is just a start.  Article points out there has been regulatory action against some members of this group for a long time (over 20 years with CFOA) but that doesn’t seem to have deterred additional problematic efforts.

One focus on the article is the limited staffing at the AG offices which limits how much they can focus on the charity sector. Various industry sources comment on the limits of self-regulation.

Back to the FTC complaint, which can be found here.  It is a public document. I assert journalist status, so will quote the document at length.

Here is the summary of the organizations’ activities, as interpreted by the FTC: (more…)

Jim Ulvog