Welcome to your daily briefing on nonprofit developments in Arkansas. Today we're covering 5 key stories including updates on arkansas nonprofit headlines, background & context. Let's dive in.
2 stories
A new guide outlines how Arkansas nonprofits can register with the State, obtain tax-exempt status, and meet annual report filing requirements.
Nonprofit professionals in AR need clear, state-specific guidance to maintain compliance and avoid penalties with state regulators.
The Rural Health Information Hub has compiled funding and opportunities to address rural health issues in Arkansas.
Arkansas nonprofit professionals serving rural communities can access targeted grants and resources to advance health equity across the state.
Reach professionals in this market
3 stories
Unrelated business income tax applies when an activity is regularly carried on, is a trade or business, and is not substantially related to the exempt purpose. Common surprises: corporate-sponsored events with naming rights that look like advertising, affinity credit-card royalties that include co-marketing services, and gift-shop sales of items unrelated to the mission.
UBIT exposure can cost both tax and exempt status if the unrelated business becomes substantial. The line between sponsorship (excluded) and advertising (included) is narrow and case-specific.
The IRS-recommended COI policy requires (1) annual disclosure by all directors and key employees, (2) a process for review of any disclosed conflict, (3) recusal procedures, and (4) documentation in board minutes. Policies that have only the disclosure form without the review and recusal process do not satisfy the recommendation.
A weak COI policy is a Schedule L disclosure waiting to happen, and Schedule L disclosures correlate with future IRS examination selection.
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.
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