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| List of Tables, Figures, and Exhibits | |
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| List of Sidebars | |
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| Preface | |
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| Acknowledgments | |
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| The Author | |
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| Types of Organizations and Their Operating Rules | |
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| The Fundamental Pillars of Nonprofit Management | |
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| The Unique Challenge | |
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| The Financial Benefits and Disadvantages of Being a Nonprofit | |
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| The Bases for Effective Management | |
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| Elements of Strategic Efficiency in Nonprofit Management | |
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| The Centrality of Mission and Finance | |
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| Managerial Ethics and the Integrity of the Organization | |
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| Summary and Preview | |
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| Protecting the Tax-Exempt Status | |
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| The Nonprofit Corporation | |
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| The Process of Becoming a Nonprofit Corporation | |
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| Resolving Differences Between State Charters and the IRS Prototype | |
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| Specific Powers of the Nonprofit Corporation | |
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| Specific Prohibitions | |
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| The Purpose or Mission of the Corporation | |
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| Tax Consequences of Specific Missions | |
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| Purposes and Privileges of 501(c)(3) Status | |
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| Acquiring Section 501(c)(3) Tax-Exempt Status | |
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| Enactment of Dissolution | |
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| Exemption Under 501(c)(3) Does Not Mean No Taxes | |
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| States and Blanket Exemptions | |
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| Factors That Threaten the Loss of Tax-Exempt Status Under 501(c)(3) | |
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| The Charitable Purpose in Canada | |
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| Summary and Preview | |
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| The Nonprofit as a Public Corporation | |
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| Forming the Publicly Supported Organization | |
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| The Basic Requirements of 501(c)(3)s | |
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| Privileges of Public Organizations | |
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| Fee-for-Service Organizations: 509(a)(2) Organizations | |
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| Diversification and Preservation of Tax-Exempt Status | |
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| Comparison of 509(a)(1) and (a)(2) Organizations | |
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| The Subsidiaries and Affiliates: Section 509(a)(3) Organizations | |
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| Canada's Charitable Organizations | |
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| Summary and Preview | |
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| Private Foundations | |
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| The Private Foundation--What It Is | |
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| The 501(c)(3) That Is Not Private | |
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| Private Nonoperating Foundations | |
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| Restrictions on Expenditures, Economic Transactions, and Investment | |
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| Private Operating Foundations | |
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| Soliciting Private and Community Foundations | |
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| Private Foundations, Public Foundations, and Charitable Organizations in Canada | |
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| Summary and Preview | |
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| Associations and Other Forms of Organizations | |
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| Revenues of Associations | |
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| Powers of Associations | |
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| Associations of Individuals | |
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| The Structure of the Organizations | |
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| Associations of Organizations | |
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| Membership Powers, Duties, and Liabilities | |
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| Nonprofits Created for State Purposes | |
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| Florida Industrial Development Finance Act | |
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| ABAG Finance Authority for Nonprofit Corporations | |
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| Lobbying and Solicitation | |
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| The Association in South Australia | |
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| Summary and Preview | |
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| Legal Responsibilities of and to Trustees | |
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| Ultra Vires and the Duty of Trustees | |
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| The Importance of Trustees | |
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| Public Interest in the Boards of Nonprofits | |
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| Size and Composition of the Board | |
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| Qualification and Removal of Trustees | |
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| Interlocking Directorates | |
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| Prohibitions on Trustees | |
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| Dealing with Possibilities of Conflicts of Interests | |
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| States and Trustee Conflict of Interest | |
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| A Five-Part Conflict of Interest Policy | |
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| Standards of Action of Trustees | |
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| Specific Functions of the Board | |
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| Emergency and Appointive Powers of Trustees | |
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| Trustee Oversight and Ethics | |
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| Instituting Procedures | |
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| Illustration: Trials and Tribulations of Trustees | |
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| Duty of Organization to Trustees | |
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| Rights of Trustees | |
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| Volunteer Versus Paid Boards | |
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| Controlling Trustee Meeting Costs | |
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| Liability of Trustees | |
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| Legal Limitations on Trustee Indemnification | |
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| Three Cs for Selecting Trustees | |
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| Five Steps to Attracting Good Trustees | |
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| Summary and Preview | |
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| Financing the Organization | |
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| Increasing Gifts and Contributions | |
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| The Importance of Contributions | |
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| The Competition for Gifts and Contributions | |
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| Individual and Corporate Motives for Giving | |
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| Dangers in Receiving Gifts | |
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| Why Corporations May Say No | |
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| Government Promotion of Giving | |
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| The Importance of Tax Deductibility of Contributions | |
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| Tax Deductibility: Three Cases | |
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| Legal Characteristics of a Tax-Deductible Gift | |
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| Borrowing to Make a Donation | |
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| Problems of Accepting Gifts Subject to Debt | |
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| Bargain Sales | |
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| Losses | |
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| Value of Gifts of Present Interests | |
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| Alternative Minimum Tax and Appreciated Property: 1990 | |
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| Gifts of Stocks: Perspectives of Donor and Donee | |
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| Limits on Giving | |
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| Problems and Strategies of Large Gifts | |
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| Gifts and Contributions in Canada | |
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| Ethical Guidance in Fund-Raising | |
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| Mix Strategies | |
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| Summary and Preview | |
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| Trusts, Wills, Annuities, Life Insurance, and Endowments | |
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| The Uses of Trusts: Deferred, Extended Benefits, and Cash Flow | |
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| The Law and the Management of Trust Funds | |
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| Examples of the Application of Trust Concepts | |
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| An Advanced Application of a Remainder Unitrust | |
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| An Advanced Application of a Charitable Lead Trust | |
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| The Uses of Wills: Gifts Deferred Until Death | |
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| Life Insurance: Magnifying the Value of Small Gifts | |
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| Role of Insurance in Fund-Raising Strategy | |
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| Annuities: Providing Income Flows | |
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| Steps for Determining Deferred Giving Instruments | |
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| Endowments: Perpetuating a Gift | |
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| The Law and the Investment of Endowment and Other Institutional Funds | |
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| Four Essential Steps for an Endowment | |
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| Valuation of Future Gifts | |
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| Summary and Preview | |
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| Business Revenues and Tax-Exempt Status | |
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| The Nonprofit as an Economic Institution | |
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| Gaming and Gambling | |
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| Profit-Making as a Source of Revenues | |
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| Costs and Other Stimuli to Generating Business Revenues | |
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| How Will the Investment Affect the Tax-Exempt Status in Canada and in the United States? | |
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| How to Acquire a Business | |
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| Should the Business Be Related or Unrelated? | |
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| Should the Business Be Separately Incorporated? | |
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| Where Does the Money Come From to Acquire the Business? | |
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| Is the Business Profitable? | |
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| Is Profitability Enough? | |
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| What Will the Investment Cost? | |
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| From a Financial Perspective, Is the Investment Worth It? | |
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| Do the Benefits Exceed the Costs? | |
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| When Will the Organization Recapture Its Investment? | |
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| What Are the Risks? | |
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| What Will It Take to Break Even? | |
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| What Can Be Done with the Earnings of the Business? | |
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| How Will Entry into the Business Be Made? | |
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| What Is the Competition? Is It Fair? | |
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| What Do the Trustees Think of the Plan? | |
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| Ethical Dilemma of Business Competition | |
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| Summary and Preview | |
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| Organizational and Tax Consequences of Business Ventures | |
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| The Importance of Business in the Nonprofit Corporate Structure | |
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| Definition of Related and Unrelated Nonprofit Businesses | |
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| Excess Profits: A Distinction Between Related and Unrelated Income | |
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| Integration of Business Operations into a Conglomerate Structure | |
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| The Organization of an Unrelated Business | |
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| Benefits, Consequences, and Opportunities of Unrelated Businesses | |
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| Tax Treatment of Different Types of Business Income | |
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| Sources of Unrelated Business Income: A Simplified View | |
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| Ten Questions to Judge Whether Business Will Be Unrelated | |
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| The Federal Tax | |
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| Other Costs of Unrelated Business Income | |
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| Summary and Preview | |
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| Pitfalls in Marketing, Lobbying, and Solicitation | |
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| The Exchange | |
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| Choosing an Object of Marketing | |
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| Choosing a Target | |
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| Unlawful Marketing and Solicitation and the First Amendment | |
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| Marketing and Liability | |
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| Unrelated Business Income Tax: Advertising | |
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| The Importance of Trustee Policy | |
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| Evaluation | |
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| Five Ms for Successful Nonprofit Marketing | |
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| An Ethical Dilemma in Marketing | |
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| State Charitable Solicitation Requirements | |
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| Disclosure of Lobbying | |
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| Federal Rules on Solicitation by Associations and PACs | |
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| Soliciting Through a Fund-Raiser | |
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| Ethics and the Donor's Right | |
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| Summary and Preview | |
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| Controlling Organizational Costs and Risks | |
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| The Budget as a Tool of Control and Contracting | |
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| The Budget as a Management Tool | |
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| The Budget as a Sum of Parts | |
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| The Budget as Contemporary History | |
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| Capital and Operating Budgets | |
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| Budgets as Baseline | |
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| Budgets as Fiction | |
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| Principles Underlying Budgets | |
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| Zero-Based Budgeting and PPBS | |
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| Efficiency: Costs and Support | |
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| The Importance of Distinguishing Between Cash (Expenditures) and Costs in Budgeting | |
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| Classification and Treatment of Costs in Budgeting | |
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| Unallowable Indirect Costs | |
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| Managerial Use of Actual Indirect Cost Allocation | |
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| Allocating Joint Costs When Fund-Raising Is an Activity | |
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| Ten Steps to Cost Budgeting | |
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| How to Estimate Costs | |
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| Key to Controlling Costs | |
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| Leasing as a Fixed-Cost Strategy | |
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| Outsourcing as a Cost Strategy | |
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| Support and Revenues | |
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| Allocating Dollars Across Programs | |
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| Permanent Revenues and Fixed Costs | |
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| Forecasting | |
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| Illustration: Costs and Revenues and Their Relationship to the Budget | |
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| Budgeting by Scenario | |
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| Budget Formats: Form Follows Function | |
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| A Recommended Format for Using the Budget as a Control Tool | |
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| A Budget Format for the Board | |
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| Summary and Preview | |
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| Compensation and Employee Benefits | |
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| Excess Executive Compensation | |
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| Reasonable Compensation | |
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| Social Security | |
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| Disability Income Insurance | |
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| Life Insurance | |
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| Accidental Death and Dismemberment | |
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| Medical and Hospitalization Insurance | |
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| Pensions | |
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| Cafeteria Plans | |
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| Profit-Sharing Plan | |
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| Fringe Benefits | |
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| ERISA and IRS Rules | |
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| Ten Steps to Setting Up the Benefit Package | |
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| Independent Contractors and Social Security | |
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| Summary and Preview | |
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| Managing Against Claims of Negligence and Harassment | |
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| The Basics of Risk Management | |
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| Types of Risks | |
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| Risks Associated with Agents and Representatives | |
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| Protecting Against Liability of Independent Contractors | |
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| Legal Shields | |
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| Coverage: Shields Can Be Penetrated | |
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| Risks of Sexual Harassment | |
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| Risks of Harassment | |
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| Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors | |
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| Summary and Preview | |
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| Managing the Organization's Finances | |
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| Financial Statements as Tools of Conversation and Control | |
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| Financial Statements as an Aid to Management | |
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| The Balance Sheet or Statement of Financial Position | |
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| Statement of Support, Revenues, and Expenses or Statement of Activities | |
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| Statement of Changes in Financial Position | |
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| General Aspects of Interpretation | |
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| Funds: A Managerial Accounting Perspective | |
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| Audit | |
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| Preparing for an Audit | |
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| Illustration of Managerial Use of Financial Statements | |
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| How Much Do Financial Statements Tell? | |
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| The Notes | |
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| Summary and Preview | |
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| Evaluating, Setting, and Implementing Financial Goals | |
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| Questions for Evaluating Old Targets | |
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| Considerations in Setting New Targets | |
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| The Treasurer's Report | |
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| Assessment of Revenue Alternatives | |
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| Cash Management and Investment Strategies: Increasing Cash | |
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| Borrowing as a Source of Cash | |
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| Uses of Cash | |
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| Liquidity Versus Investment and Risk Versus Safety | |
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| Ten Considerations in Selecting and Maintaining a Bank Account | |
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| Setting Up a Portfolio: First Steps | |
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| Selecting Securities and Rebalancing Portfolios | |
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| Investment Pools | |
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| Capital Planning | |
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| Capital Budgeting and Endowment Planning: Setting Targets and Identifying Sources of Capital | |
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| Accumulation and Disbursement Strategies | |
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| Preservation of the Terms of Endowment | |
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| Time and Risks in Endowment Planning | |
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| Setting Target Prices, Fees, and Dues | |
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| Summary and Preview | |
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| Strategic Planning for Growth and Survival | |
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| Strategic Planning as a Management Tool for Growth and Survival | |
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| The Importance of Strategic Planning: Growing the Organization Cohesively | |
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| The Importance of Strategic Planning to Associations | |
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| Strategic Planning as a Winnowing Tool | |
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| Strategic Planning: Purposes and Approaches | |
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| Mission, Ethical Codes, and Strategic Options | |
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| Strategic Options: Profits Versus Mission | |
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| Strategic Options: Competitors and Cooperators | |
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| Life Cycle of Needs: Time to Change | |
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| Illustration: Life Cycle and Disasters | |
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| Planning Period | |
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| Conducting Needs Analysis | |
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| Setting Priorities: An Illustration | |
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| Monitoring for Performance | |
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| Monitoring for Risks and Control | |
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| Evaluating, Benchmarking, and Reporting | |
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| Summary and Preview | |
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| Searching for Strategic Opportunities and Alliances | |
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| The Importance of Identifying New Niches in Old Missions | |
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| Economic Purpose of Nonprofits | |
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| Symbiotic Relationship | |
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| Nonprofit Opportunities Generated by the Market Economy | |
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| Nonprofit Opportunities Generated by Market Failures | |
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| Pure Public Goods and Nonprofits | |
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| Nonprofit Financing of Public Goods and Responses to Externalities | |
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| Nonprofits and Market Monopoly | |
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| Noneconomic Consequences of Market Behavior and Opportunities for Nonprofits | |
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| Socially Complex Problems and the Need for Nonprofits | |
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| Opportunities for Profitable Cooperation Between Nonprofit and For-Profit Corporations | |
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| Illustrations: Coexistence of Charity and Capitalism | |
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| Designing a Partnership: Illustrations | |
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| Strategic Alliances, Control, and Other Concerns | |
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| Market Activities and the Threat to Nonprofit Status | |
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| Essentials of a Partnership Agreement | |
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| Seven Key Questions About Partnerships | |
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| Limited Partnerships for the Purpose of Giving and Politicking | |
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| Summary and Preview | |
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| Reorganization: Mergers, Divestitures, Sale of Assets, Acquisitions, Conversions | |
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| The Importance of Structure | |
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| The Importance of Reorganization | |
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| Antitrust | |
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| Hospital Mergers the FTC Will Not Challenge | |
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| Central Role of States in Reorganizations | |
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| Types of Reorganization | |
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| Merger of For-Profit with Nonprofit | |
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| Issues for the Trustees in All Dispositions | |
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| Formal Plans for Reorganization | |
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| Postmerger Trauma | |
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| The Rebirth | |
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| Summary and Conclusion | |
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| Appendixes | |
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| Standards of the National Charities Information Bureau | |
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| Mathematics of Lobbying Expenditures | |
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| National Taxonomy of Tax-Exempt Entities--Core Codes | |
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| Draft Letter Awarding Tax-Exempt Status | |
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| Sample Conflicts of Interest Policy (Revised 5/22/97) | |
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| Restrictions Attached to Donations Violate Antitrust Law | |
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| IRS Example of Declaration of Trust | |
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| Breakeven Point | |
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| Exclusions to Unrelated Business | |
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| Unified Registration Statement | |
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| Key Concepts in Federal Contracting and Glossary of Common Financial Terms Found in Such Contracts | |
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| Risks of Cost Denial | |
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| Accounting for Gifts and Contributions | |
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| Notes | |
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| Suggested Readings | |
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| Index | |