Failure to file Form 990-N could wipe out tax benefits
GuideStar says half a million smaller nonprofits, already hit hard by the economic crisis, could lose their tax-exempt status in May 2010 for failing to file Form 990-N, MSNBC reported Feb. 10. Though the Pension Protection Act of 2006 does not require nonprofits under a certain income threshold to file a Form 990, it does require they submit certain information to the IRS in the Form 990-N. The IRS mandated that smaller nonprofits start filing Form 990-N last year, and threatened to strip the tax exemption of any organization that fails to file the form for three consecutive years.
Medical research in critical condition after Madoff scam
Bernard Madoff’s investment scheme has dealt a staggering blow to research institutions, which already were reeling from reduced government funding, The Wall Street Journal reported Feb. 12 (see research story). Many foundations and major donors allegedly defrauded by Madoff have been forced to slash funding for medical and scientific research, which could ultimately affect the health of millions of people, philanthropy experts say.
Madoff victims may face fines for bad judgment
Private foundations that lost money in Bernard Madoff’s pyramid scheme may face hefty fines for poor judgment, The New York Times reported Feb. 11 (see fine story). An excise tax rule, designed to encourage prudent investment decisions, punishes private foundations that fail to see red flags or vet their investments carefully. The fine can equal 10 percent of the amount invested during a particular tax year, plus an additional 10 percent penalty for foundation officers, directors and trustees.
Emory slashes budget to offset expected losses
Atlanta-based Emory University has joined the ranks of U.S. universities trimming expenses in the face of economic turmoil, The Atlanta Journal-Constitution reported Feb. 11. The Oxford campus plans to cut nine non-faculty employees, and the Atlanta-based undergraduate school expects to slash $4 million total from non-personnel expenses and faculty budgets. The university predicts investment losses of $60 million a year for the next several years, says the university’s ways and means committee.
Sanctions imposed on charity allegedly tied to rebel group
The U.S. Treasury has imposed sanctions on a Maryland charity accused of supporting the Tamil Tigers, a rebel group at war with the Sri Lankan government since 1983, Reuters reported Feb. 11 (see rebel story). Sanctions against the Tamil Foundation allow the U.S. government to freeze the foundation’s assets and ban U.S. banks and consumers from conducting business with it. The president of the Tamil Foundation also heads the Tamils Rehabilitation Organization, which the White House designated a terrorist support group in 2007.
* Lawmakers who are up-in-arms about the provision for the National Endowment for the Arts included in the economic-stimulus package are overlooking the three million people employed by the U.S. arts industry, says a column in The Los Angeles Times Feb. 11.
* The Internet is teeming with “matchmaking” services for people seeking short-term volunteer opportunities that fit their skills and interests, The Wall Street Journal reported Feb. 12.
* San Diego museums and nonprofits are relying heavily on volunteers as their endowments wane, says a column in The San Diego Union-Tribune Feb. 12.