Don’t forget Ohio’s Reporting Requirements for Nonprofits
Since so many foundations are submitting federal financial information returns this week, it’s a good time for a reminder about what Ohio law requires.
Ohio nonprofits – called charitable trusts in the Ohio Revised Code, regardless of whether they are established in corporate or trust form – have annual financial reporting and registration requirements with the Attorney General’s office. This year, nonprofits with a fiscal year that ended after November 30, 2011 need to comply with these requirements using an online system that Attorney General Mike DeWine’s office created last year. The website has an extensive user’s guide as well as tips for using the registration tool.
Ohio charities also must comply with the Secretary of State’s regulations, which require that charities file any changes to their articles of incorporation or statutory agent. Additionally, every five years nonprofits must file a Statement of Continued Existence (along with a filing fee of $25). Not sure when your foundation last filed this form? You can search the online database and see when you’re due to file it, although the Secretary of State’s office should send reminders four months before the statement is due.
IRS advice can help as foundations near filing time
IRS Exempt Organization Director Lois Lerner recently shared some advice and updates of interest to the foundation community as it nears (for many) a mid-May filing deadline.
First, she reminded those who complete the Form 990/990-PF to make sure that no Social Security numbers are included anywhere on the return. Not on any schedules. Not on any attachments that may be appended to the return. The IRS doesn’t ask for Social Security numbers on the 990 forms and its agents legally can’t redact any that appear. Ms. Lerner cited a recent Chronicle of Philanthropy article that reported nearly 20 percent of exempt organizations had submitted forms with one or more Social Security numbers of employees, donors and even scholarship winners. In this age of identity theft, Lerner urged nonprofits to carefully review the form to make sure it doesn’t include this private information.
Lerner also shared some of the findings about the relationship between governance practices and tax compliance – something that has been a major IRS focus over the last several years. The conclusions are based on statistical analysis of data from over 1,300 IRS nonprofit examinations. The analysis shows that compliant organizations are more likely to:
- Have a written mission statement;
- Always use comparability data when making compensation decisions;
- Have procedures in place for the proper use of charitable assets; and
- Have the entire board of directors review the Form 990.
While cautioning that the data are not statistically representative, Lerner commented that, “The results seem to me to be generally consistent with the premise that good governance and tax compliance go hand in hand.”
On a final note of her remarks, Ms. Lerner reminded nonprofits to make sure they file the correct form; apparently some large organizations have filed both the 990-N (the e-postcard form for small exempt organizations) and the 990 in the same year.
The IRS website has a wealth of information to assist nonprofits in filing the required returns.
How are nonprofits faring in 2012?
The Nonprofit Finance Fund recently released its annual state of the sector survey results, which answers the question of how nonprofits are faring as the economy continues its slow recovery. For the first time this year, NFF has an online survey analysis tool, which allows us to mine the data by state, budget size and organization type (arts, environment, etc.). More than 4,500 nonprofits completed the survey nationwide, including 127 from Ohio.
Here’s some of what the survey heard this year from nonprofits. Ohio figures are first, with the national numbers in parentheses for comparison.
84% of Ohio nonprofits (85%) saw an increase in the demand for services in 2011;
95% (88%) expect an increase in demand this year;
61% (57%) have 3 months or less cash-on-hand; and
86% (87%) don’t expect their financial outlook to get any better in 2012.
About half of the Ohio respondents rely on government funding, and they reported that more often than not, this funding is delayed anywhere from 30 to more than 90 days. While one-third reported receiving government payments on time, about 60% said their payments were 30 – 90 days late. In the face of late payments, most (71%) use their reserves, while one-third put off paying vendors or use available lines of credit.
These results and others that relate to funder and board engagement can help private funders better understand the challenges nonprofits face.
It’s tax time
Maybe you’re one of those early tax return filers, who sent your 1040 to the IRS in January. But, if you’re like millions of Americans (the IRS estimates that one-third wait until the last minute to file), this past weekend may have found you crunching numbers and entering them either online or on a paper form you dutifully mailed to the IRS.
Whether you filed earlier in the year or just today, completing the annual federal tax return may have included a totaling up of the charitable donations you made during the last year, to include in the schedule of itemized deductions. In addition to scrutinizing 1099s and W2s, you may have looked through your records for donations made to churches and synagogues, art museums and food pantries, environmental groups and disaster relief agencies and many other types of charities and causes.
According to the most recent data from the IRS, approximately 1.7 million Ohioans – roughly 30 percent – filed returns with itemized charitable deductions of $4,355,630. Yes, even in 2009, with a recession in full swing, generous Ohioans gave over $4 million to charities to improve the communities in which they live and work, helping neighbors and strangers, children and the elderly, pets, parks and libraries. And, this number doesn’t include the uncountable dollars given by the other 70 percent of tax filers, who don’t report those donations on their returns since they choose not to itemize.
This federal deduction for charitable contributions is a very important incentive for people to give to charities, and that’s why I am so concerned that it’s a target of the current tax reform discussions in Washington. When I was in DC last month with foundation leaders, we talked with many Ohio representatives and both senators about the critical need to maintain all incentives for charitable giving, especially given the state of the economy. I, for one, would hate to see that $4 million shrink away, without the tax advantage that keeps the charitable impulse strong in the Buckeye State and across the country.
OGF’s First 21st Century Conference
Do you remember the movie “Groundhog Day?” Bill Murray plays an egocentric TV weatherman who, during a hated assignment covering the annual Groundhog Day event in Punxsutawney, PA, finds himself repeating the same day over and over again. In many ways, annual conferences seem like that movie. The structure, agenda, sights and sounds are so much the same from year to year that, if you didn’t check your calendar, you might not know what year it was.
OGF’s 2012 annual conference will break that mold! This will be the first 21st century conference OGF has ever presented, and possibly the first truly contemporary conference you’ve ever attended.
We are re-designing the event from beginning to end. There will be greater coherence of conference content, with relevant, cross-cutting themes tying together individual sessions and large group gatherings. We’re throwing out the regimented agenda where all sessions begin and end at the same time. Content will now determine schedule, not the other way round. In place of the usual 10 minute breaks between sessions, we’ll build in more “white space” to digest, reflect and share learnings. Pre- and post-conference components will be offered, to whet your appetite for what is to come and have learnings reinforced afterwards. Recognizing that adults learn in different ways, greater variety in format and presentation styles will be the norm throughout the conference.
We’ll also be taking advantage of opportunities presented by nearby venues, and not conduct the entire conference within the confines of the hotel. Menus will change; we’ll do more with visuals; and we’ll incorporate technology more than we’ve ever done before. This year you’ll be able to design your own conference experience with lots more options from which to choose: you can stay with your constituency group, follow your funding interest, be exposed to new ideas, get some hands-on training, stick with the lectures, try out more interactive workshops. And, there will be plenty of time along the way to connect with old friends and make new ones. Finally, and for the first time ever, as OGF expands our funder networks beyond “organized” (foundation) philanthropy, we’ll be inviting giving circles, United Ways and individual donors to join us in a consideration of what Ohio philanthropy writ large is doing to make the Buckeye State a better place in which to live and work.
This year’s annual conference will be a celebration unlike any we’ve had before. It will inform, excite, engage and energize you in ways we didn’t think possible. This may be the most valuable conference you’ve ever attended!
If you usually come to OGF’s annual conference, be prepared for something even better than you are used to. If you don’t usually attend, THIS IS THE YEAR TO COME! We promise a return that will substantially exceed your investment of time and money.
Date: November 14-15, 2012
Cleveland Marriott Downtown at Key Center
Cost: NO increase over last year, $495
REGISTER NOW at ohiograntmakers.org
George Espy
President, Ohio Grantmakers Forum
OGF welcomes Cinnamon Pelly to Board of Trustees
Cinnamon Pelly, Vice President, Global Philanthropy for JPMorgan Chase Foundation OH and WV, has been appointed to OGF’s Board of Trustees. Cinnamon will fill an unexpired, one-year term.
Denise San Antonio Zeman, President and CEO of the Saint Luke’s Foundation and chair of OGF’s Governance Committee, applauded Cinnamon’s appointment, saying that “Cinnamon will bring keen and fresh insight to the OGF Board, particularly as it relates to regional corporate philanthropy. We are delighted that she has accepted our offer of membership and look forward to working with her at this important time for OGF.”
Cinnamon is an active community volunteer, serving on a number of nonprofit boards. She has a Bachelor of Administration degree from The Ohio State University and an MS in Human Services Management from Franklin University.
Welcome, Cinnamon, and thanks for your willingness to serve on the board of Ohio’s leading voice and premier resource for grantmakers.
OGF Heads to Washington
OGF President George Espy and I will lead a dozen foundation leaders around Capitol Hill later this week, to talk with members of Ohio’s Congressional delegation. We’ll be part of the national fly-in day known as Foundations on the Hill, joining more than 200 funders from across the country in DC on Wednesday and Thursday. During our meetings with the elected officials and their staff we’ll be delivering two key messages.
First, we’ll ask them to promote and protect the charitable sector. We know that federal focus is on tax reform and that in coming months difficult decisions will have to be made. But, a strong and healthy philanthropic sector is vital to our nation and communities, particularly as the economic recovery lags. Now is not the time to discourage or limit charitable giving. We’ll ask them to ensure that the tax code continues to preserve and protect current incentives that encourage charitable giving by all members of our society, including the very generous Ohioans who give more than $4 billion a year to charities.
Second, we’ll ask them to reinstate the IRA charitable rollover provision, which expired at the end of 2011, taking away an important charitable giving vehicle that has benefited hundreds of Ohio nonprofits, including community foundations.
During the meetings, OGF members will also share stories demonstrating how their foundations are helping communities address critical issues. We’ll also have time to hear from each congress person about his/her key priorities.
We’re hoping for sunshine and taking our comfortable shoes for walking the marble corridors of the House and Senate office buildings. Stay tuned for a report on what we learn from Ohio’s federal policymakers.
Philanthropy 50 Lists Ohioans
If you didn’t donate at least $26 million to charities last year, don’t look for your name on the Chronicle’s recently-published Philanthropy 50 list.
Abigail and Les Wexner made the list, at number 21, for their $65 million gift to OSU.
A less-recognized name weighed in at #48, James Wood Williamson, an engineer at a Warren, Ohio company whose estate gave $28 million, mostly to Case Western Reserve University.
Interesting tidbits about America’s 50 most generous philanthropists:
- The median gift was $61 million
- Total given was $10.4 billion, up from $3.3 billion in 2010
- 36% of donations went to higher education
- 35% went to private foundations
- 15% went to hospitals, medical centers and research
- 7% went to museums, libraries and historical preservation entities
- No one on the 50 list gave a gift of $5 million or more to a social service nonprofit.
Whether they made the list or not, Ohioans are very generous, giving a total of $4.36 billion to their favorite causes and charities in 2009. Let’s celebrate all philanthropy – large, medium and small, through organized philanthropic institutions and less formal means – and its impact in countless communities across the state.
Celebrate Ohio’s Corporate Philanthropy
Today is International Corporate Philanthropy Day, a day set aside to celebrate the corporate-community partnerships that address critical issues in our state, country and world. This year, as we struggle to emerge from a recession economy, we recognize the Ohio businesses that have continued to support their communities with grants, in-kind contributions of products and services and thousands of volunteers who give blood, tutor children and serve on nonprofit boards.
One way that businesses engage in philanthropy is through their corporate foundations. Most of Ohio’s 139 corporate foundations are of modest size, when ranked by their assets, as nearly half of them have assets under $1 million and three-quarters have assets under $10 million. Nevertheless, Ohio has a number of large corporate foundations headquartered here, many of which fund inside the state’s boundaries, across the US and internationally. The giving from these foundations in 2009 (latest data available from the IRS), totaled $173 million.
The grant dollars these companies award through their foundations is only a partial picture of corporate philanthropy, though, as most companies don’t have foundations but have corporate giving programs. And, we have no way of counting the thousands of examples of other contributions that businesses large and small make: purchasing tickets to fundraising events, donating products to charity auctions, supporting high school sports teams, giving scholarships and so many, many more ways they demonstrate their commitment to their local communities.
So, thank you, OGF corporate foundation and giving program members, for all you do!
Abbott Nutrition, American Electric Power, The Andersons Charitable Foundation, ArcelorMittal, Battelle Bricker & Eckler, Cardinal Health, Inc, CareSource, Charter One Foundation, Dayton Power and Light Company Foundation, Dominion, Duke Energy, Eaton Corporation, Bob Evans Farms, Fifth Third Foundation, First Energy Foundation, First Financial Bank, Forest City Enterprises Charitable Foundation, Grange Insurance Companies, Honda of America Mfg., Inc, Huntington Bank, Hyland Software, Jones Day, JPMorgan Chase, Kaiser Permanente, KeyBank Foundation, Limited Brands Foundation, The Lubrizol Foundation, Materion Corporation, Nationwide Foundation, Nordson Corporation Foundation, OMNOVA Solutions Foundation, Owen Corning Foundation, PNC Foundation, The Plain Dealer, The Procter & Gamble Fund, RPM International, Inc., The Scotts Miracle-Gro Company, The Sherwin-Williams Foundation, Third Federal Foundation and Westfield Insurance.
February 27, 2012 at 1:20 pm Claudia Herrold Leave a comment
Will your company win?
The U.S. Chamber of Commerce is accepting nominations for its 2012 Corporate Citizenship Awards, with a submission deadline of May 31. The Chamber gives awards in 4 categories:
The Chamber described the award program in a recent Huffington Post blog, A Movement to Reward Social Problem Solvers. The Business Civic Leadership Center – the Chamber’s resource and voice for businesses’ social and philanthropic interests – will announce the winners in December. I wonder if any OGF members will be among the finalists and winners?
May 21, 2012 at 12:09 pm Claudia Herrold Leave a comment