Goldman Sachs – 10,000 Women and 10,000 Small Business Programs

Dina Powell, president of the Goldman Sachs Foundation, recently spoke at Duke’s Sanford School.  She discussed several Goldman Sachs’ programs which are built on the concepts of social enterprise and entrepreneurship operating through women owned and small businesses as a means of improving lives and communities.

The 10,000 Women’s goal is to stimulate economic growth by providing 10,000 women around the world with management and business education, mentoring, and access to capital. With a focus on helping women outside the United States, the program seeks to positively impact the lives of these women, their families, and their communities.

The 10,000 Small Business Program is a public-private partnership designed to create growth and job creation among small businesses throughout the United States.  Currently they are focused on 12 urban areas and provide education and access to capital to small businesses in these communities.  Currently the program does not operate in the harder to reach and smaller markets and communities in rural areas of the United States.

By focusing on women overseas and small businesses which create the majority of the jobs in the U.S., these program integrate the concepts of social enterprise and social entrepreneurship as a transformative power for the communities and individuals.

A significant challenge  is how to scale these programs.  What suggestions do you have?

To read more about these program:

10,000 Women 

10,000 Small Businesses

Posted in North Carolina Lawyer for Nonprofits, Nonprofit Organizations, Social Enterprise, Social Entrepreneurship, Foundations, Duke University, Center for Advancement Social Entrepreneurship ("CASE"), Sanford School of Public Policy, Nonprofit lawyer, Harvard Business School Initiative on Social Enterprise, Hauser Institute for Civil Society, Goldman Sachs Foundation | Leave a comment

Thank You, IRS.

Thank you, IRS.

Government officials and their organizations are often criticized publicly.  It seems everyone, including this author on occasion, has an opinion on what they should or should not do and how well or how poorly they did or did not do it.  Yet,  government agencies exist to provide services on behalf of us – the public.

In recent year the IRS likely has been among one of the most publicly criticized agencies.  Yet despite the criticism and severe cuts in funding and personnel, IRS staff continue to serve the public. Seldom do they receive a word of public thanks for what they do.

Sometime on Wednesday night August 24, 2016, the IRS returned a direct link to the Exempt Organization’s home page on the IRS main landing page   They listened and responded positively to aid the nonprofit sector in a small way.

The NP Quarterly posted my article  “Thank You, IRS, for Returning EO’s Missing Link on  in response to what they quietly did overnight.

Thank you again.





Posted in Nonprofit Organizations | Leave a comment

A Web Link on

Nonprofit Quarterly published my article “The Case of the Disappearing Exempt Organizations Link on”  on Wednesday, August 24, 2016.

It is a short article -well not quite as short as this blog.  My article was prompted by a 2016 IRS ACT Exempt Organization subcommittee’s recommendation – a report which is definitely much longer than either my article or this blog. (Skip to page 89 if you want to read all of the 2016 EO subcommittee’s recommendations.)  For those who may recall, I served on the ACT committee from 2011-14.

By Thursday morning, August 25, 2016, the IRS had posted an “Exempt Orgs” tab on

This direct link  will make it easier, especially for small and mid-sized, nonprofits to access directly the IRS Exempt Organizations home page and the many resources which the EO division creates to provide them with much needed and used information.

Thank you to IRS Commissioner Koskinen and the IRS TEGE, EO, and IT personnel who listened and responded positively.




Posted in Advisory Committee on Tax Exempt and Government Entities (ACT), Current events and comments, Exempt organization, Exempt Organizations, IRS, Nonprofit lawyer, Nonprofit Organizations, Tax, Tax exempt organization | Leave a comment

Alzheimer’s Association – Statement of Relationship

As the Alzheimer’s Association experiences simultaneous disaffiliation and consolidation of its chapter network, I recall the months long process which created the association’s State of Relationship.  This agreement guided the relationship between the chapters and the national Alzheimer’s Association for more than 15 years.

Through a process which included communication, transparency, feedback, discussion, and compromise, our task force created a consensus agreement which was adopted without modification and approved after a majority vote by the national board and a majority of the more than 220 chapters in existence at the time.  The majority vote approving the Statement of Relationship is in sharp contrast to the evenly split vote when the issue of consolidation was considered by the chapters last fall.  As a result many chapters are withdrawing from the national association and long term impact of this split yet to be determined.

Here is a link to my recent Nonprofit Quarterly article  “Alzheimer’s Association – Cooperation, Competition, or Consolidation?”  reflecting on our task force’s efforts.

Posted in Alzheimer's Association, Dissolution, Exempt organization, Exempt Organizations, Nonprofit Organizations, Volunteers | Leave a comment


For the past three years I served on the IRS Advisory Committee on Tax Exempt and Government Entities, known also as “the ACT”, and its related Exempt Organization (“EO”) subcommittee.   Our subcommittee worked directly with the IRS leadership which oversees the nation’s nonprofit and tax-exempt organizations.   Yes, this is the IRS division and leadership about which you’ve read so much in recent times.  

During my tenure, I served as co-project leader for one report and co-author for portions of three reports.  The reports are the result of a year’s work, analysis, and discussions with IRS officials and others. These reports are formally presented as recommendations directly to the IRS Commissioner and senior IRS and Treasury leadership in a public hearing in Washington, D.C. Often, they are adopted in some form and implemented by the IRS. 

For example, in 2013 I gave the oral presentation for our report “Exempt Organizations: Leveraging Limited IRS Resources in the Tax Administration of Small Tax-Exempt Organizations.”  During my comments I specifically asked that exempt organizations have prominent link on the IRS’ main webpage to make it easier to find IRS information on nonprofits.  The Acting commissioner agreed and immediately ordered that a prominent tab for “Tax Exempt Organizations” be added to the main IRS main webpage.  

The tab appeared on the website before 5 pm.  You’ll find it in the middle of the page.  Wow, that’s responsive government leadership which made a positive difference!

We made other recommendations which will require more information for Form 990 EZ filers, enhance customer education and outreach, and increase sharing information with state charity regulators.   In time, hopefully, some of these other recommendations will be adopted.

In 2014 I authored the ACT’s first “Concurring, Dissenting, and a Sixth Recommendation” .   My comments were a first for the IRS and the ACT because they were not included as part of the overall report.  In preceding years ACT reports integrated differing and dissenting opinions. For example, see footnote 44 in the 2013 report.  Indeed, I was told these differences often helped the IRS to better understand and shape its policies.  

I drafted my comments in response to our EO committee’s report “Exempt Organizations: Analysis and Recommendation Regarding Unrelated Business Income Tax Compliance of Colleges and Universities.”   The committee based its report and recommendations  in part on the statistically flawed two IRS Interim and Final Colleges and University Study reports

Nevertheless,  I hand-delivered my “Concurring, Dissenting, and a Sixth Recommendation” to IRS Commissioner Koskinen before having a direct discussion with him about them during our June 2014 public hearing.   It remains to be seen whether the IRS, the Department of Treasury’s Office of Tax Policy, or others will undertake the study I recommended or, more interestingly, address the provocative and interesting “What if?” questions which I raised.    

My service on the ACT was a wonderful and challenging opportunity as a volunteer, as a lawyer, and as a citizen to influence and help nonprofit organizations.  

What are you doing to affect policy and law in your areas of interest?  Your thoughts and voice are needed and often you will make a difference!

Posted in Advisory Committee on Tax Exempt and Government Entities (ACT), Current events and comments, IRS, Nonprofit Organizations, Tax exempt organization | Tagged , , , , | Leave a comment

IRS 1023 EZ

On July 1, 2014, the IRS announced its new IRS Form 1023 EZ. This form is designed to ease and expedite the application process for small organizations which project $50,000 or less in income and assets of less than $250,000 during their first three years of operations.

To file an applicant must pre-qualify by answering 17 questions. If qualified an applicant will submit the application online and pay an electronic application fee of $400.00 after establishing an account on

For the past three years (2011-2014) I served as a member of the IRS Advisory Committee on Tax Exempt and Government Entities (ACT).  During 2011-12 we reviewed the IRS 1023 application process and issued recommendations in our June 2012 annual report.   While the committee recommended the IRS continue to use the Form 1023 application, four of the report’s core recommendations were:

1. the IRS should expedite the internal processes and commit the necessary resources (human, financial, and technical) to transform Form 1023 to an interactive Web-based Form e-1023 that can be filed electronically and stored, transmitted, and disseminated in an electronic database format; and

2. the IRS should redesign the Form 1023 with four primary objectives: to make the form (i) effective at identifying whether organizations meet the requirements for recognition of exemption; (ii) consistent with the structures and definitions of Form 990; (iii) simple by using a short core form with supplemental schedules that will ease the filing burden on small and/or less complex organizations; and (iv) educational by organizing questions based on substantive exemption requirements and including explanatory information. ***

5.  the IRS should carefully examine recurrent complaints about the Form 1023 filing and review process and take appropriate and expeditious steps to improve the effectiveness, efficiency, and timeliness of that process; and

6. the IRS should expand its use of the Review of Operations (ROO) program (to follow up on Section 501 (c)(3) organizations whose 1023 forms indicate potential future compliance issues), and should consult with state charity regulators regarding indicia that may warrant such follow-up.

The Form 1023 EZ is the second form which the IRS released following this report.  The first was last year’s introduction of the Interactive Form 1023.

Finally, the IRS continues to review and revise its application process in the Cincinnati office.  The IRS will rely upon the ROO as the primary means to follow-up and check on the nonprofits which avail themselves of the Form 1023 EZ application process.

Posted in Advisory Committee on Tax Exempt and Government Entities (ACT), Exempt organization, IRS, IRS Forms, Nonprofit Organizations, North Carolina Lawyer for Nonprofits, Starting a Nonprofit, Tax, Tax exempt organization | Tagged , , , , , , , , , | Leave a comment

IRS Interactive Form 1023 – Public Testing

On September 4, 2013, the IRS posted a beta version of their forthcoming Interactive Form 1023 on their StayExempt website. This electronic form permits an applicant to complete a 1023 Application for Recognition of Exemption Under Section 501 (c)(3) on-line. The form has accompanying interactive web links. These links provide context sensitive information about the form’s questions and related issues which will guide the applicant through the form.

The beta version is available for public review and public feedback only until September 20, 2013. There are email links through the form to provide feedback. After September 20th, the form will be removed from the website while the IRS reviews the comments it receives. The IRS then will release a final version for public use later this fall.

Reviewers cannot use this beta version to download and print or submit as a current application. However, when released in its final form, an applicant will download and print a completed application which will be mailed to the IRS for processing. Hopefully, this form represents an interim step towards an online electronic 1023 application process.

In addition, the IRS also updated two of their related StayExempt courses: “Applying for 501(c)(3) Status” and “Maintaining Tax-Exempt Status.”

Will you:

    • review this form and provide feedback to the IRS, and
    • forward information about it to others and encourage them to review it before 9/20?

Both the Interactive Form 1023 and updated courses can be accessed on the StayExempt website.

Posted in Advisory Committee on Tax Exempt and Government Entities (ACT), IRS, Nonprofit Organizations | Tagged , , , , , | Leave a comment

“Board Culture: How to Prevent a Shift in the Wrong Direction” webinar

On January 29, 2013, from 2 – 3:30 pm  I will present a webinar titled “Board Culture: How to Prevent a Shift in the Wrong Direction” in collaboration with BoardSource.   

Using a “hypothetical” case study, this 90 minute low-cost webinar will offer an interactive format which invites the participants to consider legal, management, and ethical issues confronting their nonprofit’s board of directors. 

Click here for more information and to register for the webinar.

Posted in Board of Directors, North Carolina Lawyer for Nonprofits, Training and Speaking | Tagged , , , | Leave a comment

Public Funds Bring Increased North Carolina Nonprofit Transparency

Effective October 1, 2012, North Carolina nonprofit corporations receiving more than five thousand dollars ($5,000.00) of public funding  within a fiscal year from any local, state, or Federal government shall disclose their latest annual financial statements upon written demand from any member of the public.   Public funds include grants, loans, and the value of in-kind donations from these government entities.

The information to be disclosed include:

  • Statement of operations;
  • Balance sheet;
  • If prepared by a public accountant, the accompanying accountant’s report;
  • If not prepared by a public accountant, a statement by the president or person responsible for the accounting records to include: (a) their reasonable belief the statements were prepared according to general accounting principles and, if not, a description of the basis of preparation and (b) “describing any respects in which the statements were not prepared on a basis of accounting consistent with financial statements prepared for the preceding year”; and
  • “Details about the amount of public funds received and how those funds are used.”

Corporations may comply by:

(a) posting the report on their website along with copy of the most recent IRS Form 990, 990 EZ, or 990N;

(b) having materials posted on a third party website (e.g. Guidestar) which does not charge a fee to access the website if the North Carolina corporation provides a link on its public website to this third party website.

Corporations excepted from this filing include those required to file reports with the North Carolina Medical Care Commission, Local Government Commission of the Department of State Treasurer, and private colleges as defined by North Carolina law and required to report to the State.

A problem with a third party website compliance is these websites may not list the most current 990 form on the website.  Many in the public still do not know about or regularly use these public third party websites.  Further, advanced analysis or historical date may require a paid subscription.

The IRS requires a tax exempt entity upon request to make available to the public its current and preceding two IRS Form 990 for examination.  A nonprofit complies when the 990 are posted on its public website.

Missing from this legislation is the requirement that nonprofits post their financial reports on the public websites when they don’t receive public funding.  Nor are there any substantive consequences if a nonprofit does not comply in a timely manner or at all to a written request.  Both issues can easily be remedied by amending the statute.

Increased transparency can also be improved if private funding entities (e.g. foundations or large donors) require a nonprofit to post this information on their website as a condition to receive their funding.

Nonprofit boards of directors and their senior management engaging in best practices will create and maintain a  current “Governance Page” on their public website.  This page will  include current and historical financial information, as well as other relevant information about their nonprofit’s operations to enable the public make better informed decisions about them.

Transparency for nonprofit organizations is no longer optional.

If nonprofits aren’t transparent, donors, investors, the public, and government funding entities may be well justified in their concerns and skepticism about the nonprofit’s operation and how their funds are managed by a nonprofit’s board of directors and senior management.

Posted in Board of Directors, Current events and comments, Exempt Organizations, Governance, Management, Nonprofit Organizations, North Carolina | Tagged , , , , , , , , | Leave a comment

Spies, Jurors, and Nonprofit Boards: Seeking Ground Truth

“Bond—James Bond!”

Those words from the movie Dr. No introduced me to spies. (Dr. No also introduced Ursula Andress, but that’s another blog.)  A summer visit to Washington, D.C.’s International Spy Museum provided a fascinating look at spies and their history, tools, and techniques. Their “Ground Truth Theater” discussed the 21st century challenge for spies to provide decision makers with unvarnished and objective facts.

The geospatial intelligence exhibit displayed satellite and high-tech intelligence gathering techniques then unavailable to James Bond and “Q”. But data gathered from spy satellites must be reconciled with what literally and simultaneously occurs at ground level to be credible. This factual and objective confirmation and reconciliation of multiple perspectives describes the concept of “ground truth”.

Wikipedia suggests the military’s slang definition migrated into current scientific usage. Military slang defines ground truth “to describe the reality of a tactical situation as opposed to what intelligence reports and mission plans assert the reality to be.” A foot soldier’s view differs markedly from a general’s. Both are needed!

Spies seek to secure early, objective, and actionable data for decision makers without direct access and far removed in time and place from a spy’s sources. Decision makers use this information to confirm, deny, test, and modify underlying assumption(s); learn; and, hopefully, make better informed decisions.

As deliberative bodies juries and boards require ground truth to work. Jurors decide based on relevant facts and conflicting interpretations about their significance. Successful trial lawyers learn to anchor their case on unquestioned and irrefutable objective facts. When facts are accepted as true, a jury evaluates the litigants’ conflicting interpretations for legal significance and meaning. When rendering their verdict, a jury establishes the case’s ground truth.

Boards of directors must determine their organization’s ground truth. They lack in-depth knowledge derived from daily operations compounded by the quality and timeliness of board information and members’ preparation for and substantive engagement at meetings. Designed with packed agendas, sole reliance on staff, and social functions members may be distracted by their personal concerns. Board members don’t run their own business or personal lives based on a few meetings lasting several hours a year. Yet this is how boards govern.

Ground truth should guide board decisions. With access to timely and unfiltered data members first form their assumptions based on ground truth as they understand it. But members must then test them openly and explicitly through a healthy board’s hallmark of give and take discussions.

Boards have implicit and explicit expectations. When ground truth conflicts with expectations, the gap between expected and actual results, whether positive or negative, should facilitate the nonprofit’s examining it underlying assumptions and theories of change. Failing to engage in this analysis or take timely action may have adverse effects.

Conflict often arises when challenging assumptions (“sacred cows”).  A board’s social nature may seek to limit, if not eliminate, conflict engendered when members assert fundamental differences. Boards may ignore or, worse, affirmatively shut down or eliminate dissenting members, thereby creating a perilous “group think” phenomenon! Dissenting views often should be heeded, but particularly when based on ground truth.

Fostering a board culture designed to test assumptions establishes healthy dialog when board members’ differing views emerge. This is why boards meet. Through critical analysis and discussion, their decisions should seek to reflect ground truth. Otherwise, their ability to confront reality and implement change diminishes.  As the saying goes, “denial” is not just a river in Egypt.

What if the Raleigh, North Carolina YWCA timely addressed multiple years of operating in the red instead of closing abruptly without notice and then filing for bankruptcy? What if Penn State University and the Second Mile boards addressed their painful ground truth earlier?

They are today’s headlines.  Their legacy serves as a warning beacon for boards to seek ground truth no matter how painful and act accordingly.

Boards built on ground truth will persevere, survive, and ultimately thrive more readily than those built on the gossamer of opinion, feelings, and influence untested and unchallenged by ground truth.

How willing is your board to seek “ground truth”?

Posted in Board of Directors, Nonprofit Organizations | Tagged , , , , , | Leave a comment