Welcome to your daily briefing on nonprofit developments in Delaware. Today we're covering 5 key stories including updates on delaware nonprofit headlines, background & context. Let's dive in.
2 stories
The IRS has published Delaware-specific filing information for tax-exempt organizations.
Delaware nonprofit professionals need accurate state-specific guidance to maintain compliance with federal tax-exempt requirements.
Delaware First Health and the Centene Foundation have launched an open submission period for community-based organizations and providers across Delaware to apply for grant funding through June 13, 2025.
This creates a timely funding opportunity for Delaware nonprofit health and community organizations seeking new revenue streams to support local services.
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.
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 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.
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