Welcome to your daily briefing on nonprofit developments in Alabama. Today we're covering 6 key stories including updates on alabama nonprofit headlines, background & context. Let's dive in.
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Harbor Compliance provides comprehensive solutions and free resources to help manage nonprofit compliance activities including fundraising, tax exemption, and license renewals.
Alabama nonprofit professionals can access tools to streamline compliance obligations and reduce administrative burden.
The Alabama Law Foundation makes grants each year for law-related charitable projects to help ensure the future of law.
Alabama nonprofit professionals working on legal access, justice, or law-related initiatives can tap this annual funding stream to sustain or expand their programs.
The Alabama Attorney General's Office provides online application tools for looking up business information through its iGov platform.
Nonprofit professionals in AL can use this resource to verify business entities, check registrations, or research potential partners and donors.
Reach professionals in this market
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Donor-restricted gifts must be tracked separately and used only for the restricted purpose; using them for general operations — even with intent to "pay back" later — is a fiduciary breach and an audit finding. The most-common fact pattern: cash-flow shortage in operations, restricted-grant balance available, transfer "borrowed" with no formal repayment plan.
State attorneys general have authority over restricted-gift compliance and have pursued individual board members and executives. Auditors are required to disclose restricted-fund violations in the management letter.
Most states require charities soliciting donations from their residents to register before solicitation, regardless of where the charity is based. "Solicitation" includes web fundraising pages accessible to residents, not just direct mail. Compliance gaps surface during state attorney-general inquiries or unrelated litigation discovery.
Penalties range from civil fines to suspension of solicitation rights in the state. Larger consequences include negative coverage in donor research databases that fund foundation grants.
The streamlined Form 1023-EZ is available only to organizations meeting specific limits on projected revenue, assets, and activity types. Filing 1023-EZ when ineligible produces a determination that is technically valid but vulnerable to retroactive revocation if discovered. The full 1023 is harder to file but harder to challenge.
Loss of exemption is retroactive to the original determination, exposing the organization to back-tax liability. The eligibility checklist is the only protection.
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