U.S. Regulations

USA State Solicitation Regulations Are Fierce & Far Reaching

"Paperwork" by Curtis Gregory Perry

With such as significant portion of donations to Israel’s charities coming from the United States, changes in American legislation can have a profound impact on Israeli nonprofit organizations.

For this reason, I happily agreed to co-host (along with Charlie Kalech of J-Town Productions) Laura Solomon, an attorney based in Philadelphia who specializes in nonprofits. Laura was a powerhouse, leaving me and the other attendees racing to take notes fast enough.

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Guest Post: IRS Renews Focus on International Activities by US Charities

"New York City, New Jersey (NASA, International Space Station Science, 03/14/10)" by NASA's Marshall Space Flight Center

This renewed focus may make Israeli charities that get funding from the US a little jittery – particularly following the IRS’s release of two private letter rulings (2010 and 2012) that denied exemption to new organizations seeking exemption for American charities that planned to do fundraising for Israeli charities. In any case, it should serve as a wakeup call to all American charities that conduct activities internationally that they need to strictly comply with the law and must avoid serving as a mere “conduit” to their foreign grantees.

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MANDATORY Compliance with the I.R.S.' VOLUNTARY Best Practices

A charitable foundation’s worst fear is that its grant will be used for non-charitable purposes. The U.S. Internal Revenue Service (IRS) stresses that this risk increases drastically when dealing with foreign grant making and expenditures.[1] The U.S. Department of the Treasury released its third and final version of its “Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S. Based Charities” (VBP) in September of 2006 to help charities implement procedures that will reduce the risk of unintended diversions of funds to terrorist causes.

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Insight Not Accuracy: Why The New York Times is Important

A recent New York Times’ article attacked American charities that help build communities in Israel’s West Bank and IRS policy that enables donations to these organizations to be tax-deductable. As with any piece about the Palestinian-Israeli conflict, many people have been quick to attack or defend the veracity of the article.

To nonprofit organizations, the value of the article is not the accuracy of the authors’ claims, but rather the article’s insight into current concerns and trends influencing the nonprofit sector. These can serve as warnings and guidelines to US charities that operate internationally.

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4 Reasons Why the I.R.S. Interim Report "Exempt Organizations – Universities Compliance Project" is an Important Read

Too many times the IRS has hinted at the direction to which it is heading, with people taking little notice. Well, in quiet screams, the IRS is doing it again, with the release of their interim report: “IRS Exempt Organizations – Colleges and Universities Compliance Project.”

I preface that I have not yet read the report, but I will. And here’s why I think you should too:

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Are “American Friends of” Organizations a Thing of the Past?

International organizations have been highly successful in raising funds from the United States through U.S. based charities commonly referred to as “Friends of” organizations. These charities are registered in the States and have 501(c)3 tax-exempt status and, thus, allowing these donations to these essentially foreign organizations to be tax-deductible.

As you can imagine, many international causes consider a “Friends of” organization as a crucial step in their fundraising strategy.

Hence, recent conversations I have had are causing me to worry.

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The New Jersey Scandal, Pt. 1: The Facts

Last week (July 23) in New Jersey, an undercover police operation revealed a rainbow of criminal dealings. The implications of the scandal vis-à-vis charities are too vast and far-reaching to be dealt with in one post. Over the next day or two I will address the pertinent issues. Questions and comments are welcome.

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