Welcome to your daily briefing on nonprofit developments in Iowa. Today we're covering 5 key stories including updates on iowa nonprofit headlines, background & context. Let's dive in.
2 stories
Iowa American Water announced the launch of the American Water Charitable Foundation 2026 Water and Environment Grant Program.
Iowa nonprofits focused on water quality and environmental projects can now apply for dedicated funding from a major utility-backed foundation.
The Iowa Grants Guide is a database maintained by LAWINRC listing more than 500 funders based in Iowa or with an Iowa connection, with filters to search by funder name or advanced options.
Nonprofit professionals in IA can quickly identify relevant local funding opportunities instead of sifting through national databases with limited state-specific results.
Reach professionals in this market
3 stories
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.
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.
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