Author Archives: webmaster

So you want to work for a nonprofit

Each year more and more nonprofits are formed, and more and more young idealists wonder if they would like to work for a nonprofit. Here are some things to consider before jumping in.

If you like to set and meet goals, it can be frustrating to work for a nonprofit. You won’t be able to measure your performance in daily sales or any of the traditional business world benchmarks, and chances are you’ll work in an office and not see the day-to-day difference that the programs make, either. For many nonprofit staff, job performance is a matter of having faith in the big picture.

If you work for a nonprofit and need a benchmark, maybe it could be how many folders you fill with volunteer applications.

You might never reach your full earning potential. Nonprofit staff are as a rule incredibly educated and hard-working, which makes for a vibrant co-worker environment full of bright individuals who could be making much more dough in the for-profit world.

You will eat, sleep, and breathe fundraising. Even if your nonprofit makes life a little easier for everyone by hiring professional fundraisers, all employees are expected to pull their weight. That means constantly networking with the objective of hitting prospects up for donations, planning fundraising events, keeping meticulous records of how grant money was used, and endlessly tracking client outcomes and other statistics for future requests.

Having to beg for money instills humility and other positive traits.

You’re going to be doing some of the most high-stakes work around. You could make the critical difference that allows a drug-addicted teen to get clean – or stand by as he shuts the door on that possibility forever. If you love the challenge and satisfaction of doing truly life-changing work, working for a nonprofit just may be for you.

You will deepen and broaden your skill set. The vast majority of nonprofits are small- to medium-sized, enthusiastic about putting the knowledge you come in with – whether it’s teaching the violin or running social media campaigns – to good use. You will quickly gain responsibilities in your area of expertise and will have the opportunity to leave your mark on your organization and the people it serves. On the other hand, nonprofits also value well-roundedness and flexibility, and will invest in training you in new skills so that you can become even more of an asset.

You will rub shoulders with very interesting people. Unlike most corporations, nonprofits eschew hierarchy and stiff protocol. After all, you’re all working together toward a cause you passionately believe in. This means that not only will your hot shot executive director and community pillar board members take a personal interest in you, but they will happily introduce you to any famous guests at the fundraising gala.

Meet important people, eat hors d’ouevres, bid on hilarious items – fundraising galas ain’t all bad!

You can get your student loans forgiven. If you work full-time for a nonprofit and have made at least 120 qualifying monthly repayments of your student debt, you might be able to have the entire remaining balance forgiven under the Public Service Loan Forgiveness (PSLF) Program. That’s right, the entire balance – talk about an amazing deal!

There’s a reason why the government is willing to part with it’s hard-earned cash to give nonprofit employees a hand. Society thinks people who work for nonprofits are an awesome and important bunch! Because you’re willing to make some sacrifices to your career, those who desperately need help have a place to turn to. Seeing people’s faces light up when you tell them what you do is one of the great perks of working for a nonprofit.

The Trump effect on nonprofits

Donald Trump’s election as President of the United States revealed and deepened social schisms. While many experts are pessimistic about the Trump effect on nonprofits, there’s no consensus here, either – 2017 might be a shameful disaster or it might make American nonprofits great again.

In part, the full Trump effect on nonprofits is difficult to predict because it requires parsing through a multitude of campaign promises, many made off the cuff, rather than consulting the President’s past political record. A few months in it already appears that even some of his most well-articulated promises might be impossible to keep. The gleeful wholesale dismantling of the Affordable Care Act is on hold for possibly forever. The convergence of President Trump’s policies with cuts in state spending and the recent trend of private foundations becoming stingier and more selective with their grants also makes it tricky to gauge precisely how much nonprofit turbulence can be attributed to the White House.

 

Much trickier than this Donald Trump Rubik’s Cube.

 

Optimists predict a rise in charitable giving as wealthy individuals are treated to more favorable tax policies under Trump. Tax reductions coupled with the proposed elimination of the estate tax could free up billions for charitable support each year.

For most critics, on the other hand, the most salient fact is that Trump’s rhetoric and record so far disproportionately target the poor and other vulnerable populations. They caution that nonprofits will never be able to make up the shortfall in government support, although many will strain their resources and infrastructure to the limits trying. These pessimists predict, at best, a decline in the quality of services offered, while the Trump effect on less fiscally sound organizations will threaten their very survival.

The most potentially catastrophic move would go far beyond even those fears by fundamentally altering the function of nonprofits in society. This would be the rumored repeal of the 1954 Johnson Amendment that prohibits nonprofits from endorsing or opposing political candidates. Should it be enacted, tax-deductible donations would start going towards politics and away from providing services to those in need.

As of March 2017, it’s still too early to tell if hopes for a positive Trump effect on nonprofits will be realized or if the most horrifying fears will come true. Many nonprofits wrote their budgets in the last few months sitting in the dark, not knowing what government funding will look like when the federal fiscal years begins in October or which new laws will be passed by then. Our advice to nonprofit leaders is to seize this moment of uncertainty to build momentum for themselves and their clients. We now know that there’s great concern for vulnerable populations out there. Young people who may not previously have cared about Native American rights or uninsured seniors or even known what the NIH does are calling their friends to attention on Facebook and other platforms. It will be the task of nonprofits to turn their motivation into concrete action.

 

Getting people to care about people in need is step 1.

 

Are churches nonprofits?

Yes, they’re tax-exempt under IRC Section 501c3. But how, exactly, are houses of worship such as temples, mosques, and churches nonprofits?

If you’ve recently discovered religious tax exemption and think it has something to do with the clout of modern mega-churches, you might be surprised that this is nothing new under the sun. In the U.S. churches have been officially tax exempt since 1894 and unofficially tax exempt since Day 1. Before the IRS even existed, their work fit the modern definition of the nonprofit sector – organizations that use private funds for the public good.

The legal underpinnings that make churches nonprofits are quite a bit murkier than the de facto ones that derive from long-standing practice. The Emperor Constantine explicitly granted the first known tax exemption to churches in the third century, but the highest law of our own land, the U.S. Constitution, is silent on the matter. Nevertheless, when the Supreme Court reexamined the nonprofit status of churches in Walz v. Tax Commission of the City of New York (1970), the rationale was attributed to the First Amendment. Tax exemption, according to that decision, “creates only a minimal and remote involvement between Church and State and far less than taxation of churches [would].”

 

churches tax exempt

Constantine: “…and then I made myself spiritual leader of the church and declared it tax-exempt!”

 

The Walz decision is what’s always quoted today on this issue, though it was merely an attempt to explain why something is the way it’s always been. The Internal Revenue Code has since its beginnings in the late nineteenth century categorically defined religion (as well as science) as a 501c3 exempt purpose. Furthermore, it considers “charitable” actions to include “the advancement of religion.” So an honest answer to the question of what makes churches nonprofits is that they just are.

Churches are automatically considered nonprofits without having to apply for exempt status. Some choose to formally request a 501c3 letter to encourage contributions, which people seem more willing to give when they’re assured to be tax-deductible (who would’ve thought?).

While the Church of Satan famously spurned its nonprofit status, that status can generally only be pried from the cold, dead hand of religious organizations. The Church of Scientology lost theirs for 26 years only after being recategorized as a commercial rather than a spiritual business. For houses of worship that do not charge thousands of dollars for auditing sessions, the greatest risk is violating the 1954 Johnson Amendment to the tax code that prohibits exempt entities from endorsing or opposing political candidates. You may have noticed that in practice ministers endorse, oppose, and generally comment on politics all the time. The Johnson Amendment is so wishy-washy that although hundreds of churches are reported as violators the IRS has only ever stripped nonprofit status from one politically active entity – a small church in Upstate New York that ran anti-Bill Clinton ads in the newspapers back in 1992.

 

The Church at Pierce Creek's ad that finally got the IRS's goat.

The Church at Pierce Creek’s ad that finally got the IRS’s proverbial goat.

 

The term “churches” here, incidentally, is understood generically to include all sorts of houses of worship, regardless of religion. While there have been dozens of petitions to reclassify the Westboro Baptist Church as a hate group that doesn’t deserve tax exemption, there have been many more started by narrow-minded people floored by the idea that Islamic mosques, Buddhist temples, and other non-Christian houses of worship are equally considered nonprofits. To reiterate: Yes, they are. They just are.

Whether or not churches should be nonprofits is another story. From our perspective as nonprofit fundraisers, the most sophisticated argument against is that religious instruction is not work that the government otherwise would, or even could, do. Nonprofits are meant to solve public sector problems with private sector resources. Even if religiosity is a public good, it certainly falls outside the scope of the public sector. A much less convincing reason is the oft-repeated charge that churches aren’t even really helping people. Honestly, it’s nearly impossible to measure degree of helping people objectively across nonprofits and even if such a metric existed, we suspect no church would rank among the worst offenders.

In any case, wasting time petitioning to remove a 501c3 organization, or even a whole class of them, is silly. All of us are already empowered to make them flourish or fold. All of us should know that exempt organizations, religious and non-religious alike, only exist as long as we keep giving them money.

Want to know more about what makes churches nonprofits? You can find the IRS Tax Guide for Churches and Religious Organizations here!