Welcome to your daily briefing on nonprofit developments in South Carolina. Today we're covering 6 key stories including updates on south carolina nonprofit headlines, background & context. Let's dive in.
3 stories
The South Carolina Association of Counties has compiled resources for county officials and employees seeking grant funding and low-interest loans.
Nonprofit professionals in SC who partner with county governments or seek aligned funding opportunities may find these centralized resources valuable for identifying potential revenue streams.
The Central Carolina Community Foundation is mobilizing charitable giving to build a stronger community through its available grant opportunities.
SC nonprofit professionals can access funding to advance their missions and expand community impact through this regional foundation.
The South Carolina Department of Education maintains a grants webpage at ed.sc.gov/finance/grants/ as a resource for grant-seeking organizations.
Nonprofit professionals in SC can use this state education portal to identify potential funding streams and stay informed about grant opportunities tied to public education priorities.
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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.
Private inurement is benefit flowing to insiders (officers, directors, key employees); it is an absolute prohibition. Private benefit is benefit to outsiders that is more than incidental to the exempt purpose; it is a question of degree. Both can revoke exemption, but the legal analysis differs.
Insider transactions trigger automatic intermediate sanctions even when the exemption survives. Outsider benefit triggers a facts-and-circumstances analysis. Distinguishing them shapes the defense.
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