Category Archives: Government Regulations

Thoughts on the Impact of the Coronavirus on Nonprofits

Ernest Stambouly

At a recent Executive Directors forum, the most pressing topic for conversation was the effects on the Coronavirus on nonprofits, and what to do with their upcoming scheduled events and campaigns.

The following article was shared by one of our forum members, Carrie Buck, Executive Director at Homeless Intervention Shelter House. 

Why Nonprofits Must Be Included in a COVID-19 Relief and Economic Stimulus Package

Nonprofits Are Significant Employers

Nonprofits employ 12.3 million people (the third largest workforce – tied with manufacturing), with payrolls exceeding those of most other U.S. industries, including construction, transportation, and finance. A substantial portion of the nearly $2 trillion nonprofits spend annually is the more than $826 billion they spend on salaries, benefits, and payroll taxes every year. Yet, in multiple disaster relief laws in the past, Congress has ignored this core economic fact and approved employment related tax credits that left nonprofit employers and employees out of the provisions.

Policy Solution: Any employment-focused relief or stimulus legislation must expressly apply to employment at tax-exempt organizations by making tax credits and deductions applicable not just to income taxes, but to the taxes nonprofit pay, such as unrelated business income taxes and payroll taxes.

Most Nonprofits Are Small Businesses

Most nonprofits are relatively small: 97 percent of nonprofits have budgets of less than $5 million annually, 92 percent operate with less than $1 million a year, and 88 percent spend less than $500,000 annually for their work. Thus, the “typical” nonprofit is community-based, serving local needs. Also, relatively few nonprofits have an endowment and most have limited reserves — about 50 percent have less than one month of cash reserves.

Policy Solution: Nonprofits must be expressly included in tax and other relief targeted to small businesses.

Nonprofits Are on the Frontlines of Coronavirus Response

No one doubts that hospitals, community health centers, and senior living communities will continue to be hit hard by the coronavirus. Most of those organizations are charitable nonprofits. And many other nonprofits are responding to the outbreak, such as local Meals on Wheels which are serving their normal community of elderly people and a growing number of individuals under quarantine. The list goes on to include nonprofit food banks, shelters, domestic violence services, houses of worship, early care and education centers, after-school facilities, and more that are being called on to feed, house, and care for people whose lives have been disrupted by closures, job loss, and sickness.

Policy Solution: Funds are needed to pay for the increased costs and demand for services arising because our economy and safety net was not built for a pandemic of this degree.

Nonprofits Are Experiencing Declining Economic Activities

Just as travel, restaurant business, and tourism have dropped off, so has the community engagement and related services of many nonprofits that promote and serve a vibrant economy. ASAE reports that meetings convened by all types of nonprofit associations in the United States annually attract more than 250 million attendees, contribute nearly half a trillion dollars to U.S. gross domestic product, and directly support 5.9 million jobs.v Many of those jobs will likely disappear in the coming weeks. As will the jobs and revenues lost as a result of closed productions at concert halls and theaters large and small, curtailed training sessions and other educational programming, cancelled fundraising events where many nonprofits earn significant mission dollars through attendance and sponsorships, and diminished attendance at cultural, religious, and community events. All of these activities are essential to a healthy economy and deserving of stimulus.

Policy Solution: Any economic stimulus proposals aimed at helping adversely affected industries and geographic areas must recognize the impact of the coronavirus crisis on the nonprofit sector.

Nonprofits Are in Every Community Ready to Serve

Everywhere in America, charitable nonprofits are already in place serving the needs of residents. Every dollar granted, donated, or earned goes back into the community immediately to address clear and present problems. Nonprofits are our economy’s shock absorber when crisis hits. Dollars devoted to nonprofits – whether through new appropriations or expanded charitable giving incentives – will be spent immediately on solutions and recirculated in local communities.

Policy Solution: Congress should ensure communities are able to support their local nonprofits during this crisis by enacting a targeted, temporary giving incentive that enables all residents, regardless of whether they claim itemize deductions, to receive a tax incentive for giving to the work of charitable nonprofits responding to, or suffering from, the coronavirus.

[ The original article can be found on the Council of Non-Profits website. ]

Author: Ernest Stambouly, Executive Coaches of Orange County,

Changing Pies

David Coffaro
Dave Coffaro

As nonprofit development professionals know, there are many factors that influence charitable donations. Emotional connection to an organization’s mission, commitment to creating a better community, giving back to a charity that made a difference in someone’s life or tax deductions can all be influencers. Add to these internal motivations the external reality of economic conditions and you have an ever-changing environment informing development strategies.

Strategy as a Process, not an Event

Successful leaders know that their ability to adapt strategy as environments change is fundamental to sustaining a thriving organization. Reading the environment, interpreting temporary and longer-term structural changes and proactively adjusting approach are critical determinants of success.

Today, nonprofit leaders face an environmental shift in terms of fundraising. New preliminary IRS information, reported by MarketWatch this week ( indicates that as a result of the 2017 Tax Cuts and Jobs Act, taxpayers have itemized $54 billion less in charitable contributions so far this tax season compared to the previous year. These numbers could change as the IRS receives more tax returns (the agency expects a record 14.6 million tax return extension requests this year), but the headline corroborates what many nonprofits have been feeling over the past year of fundraising.

At first blush, this news suggests that nonprofits must now compete for a smaller pie of charitable giving. However, when we dig a little deeper, it may be that there are other pies available to get a bigger slice. Here are three specific ideas to contemplate as your organization considers refining and adapting its’ strategy:

  • Market the mission – Step into the shoes of the donor and ask “why would I contribute to your organization”. Tax benefits are one reason, but for most of your donors, there is some kind of emotional connection to your mission. The work your organization does every day resonates with the donor at some level, or they wouldn’t be one of your donors. This is a perfect time to revisit your mission, how you articulate it, your organization’s value proposition and how you message all of this through every medium to make sure the story is communicated the way it needs to be delivered.
  • Increase focus on corporations and foundations – Concurrent with the 1/1% decline in the dollar amount of donations from individuals, funds from corporations and foundations actually  increased (+5.4% from corporations and +7.3% from foundations). Translation – there’s still a lot of pie available; you just may have to look in different places to get what your organization needs. This is where the role of leaders comes into play in terms of refining strategy based on a changing environment.
  • Explore non-financial gifts – Beyond the 2017 tax law changes, one theory suggests that equity market volatility over the past year may be playing a role in individual giving. This behavioral finance explanation suggests that when capital markets are volatile, investors feel less confident, therefore more cautious about donating from their investment portfolios to charities. As an alternative, developing or expanding your organization’s focus on non-financial gifts – real estate, automobiles, oil, gas or mineral rights, specialty assets or artwork may be a way to enable your donors to support the mission in a manner that is more comfortable in the current market cycle.

Effective nonprofit strategy is on ongoing, dynamic process that continually recalibrates to its environment. This is a perfect time to revisit your organization’s strategy to see how it aligns with current reality, and the pies that are available to you.

Author: David Coffaro, Executive Coaches of Orange County,

ABC Test for Independent Contractors

Robin Noah

California’s top court makes it more difficult for employers to classify workers as independent contractors.

If you have independent contractors as workers in your business you need to review and take action to comply with the ABC test.

What Is the ABC Test, and How Can Small Business Owners Comply? The laws surrounding worker status have long been ambiguous. Deciding whether a worker is an employee or independent contractor has been largely left up to the employer’s discretion. Not anymore. Thanks to California’s 2018 court ruling, workers are now presumed to be employees. After implementing a new ABC test as law, California has greatly limited the number of workers businesses can call independent contractors.

 More than 20 states apply the ABC test. In one form or another. As the ABC test gains more and more traction nationwide, you may need to change how you classify your own workers. So, what is the test all about, and how will it impact your small business?

The ABC test is a three-part test employers must meet if they want to classify a worker as an independent contractor. The burden now falls on employers to prove workers are independent contractors. The ABC test makes it more difficult for employers to try to classify workers as independent contractors.

In April 2018, California’s Supreme Court adopted the ABC test following the Dynamex Operations case.

In the court case, delivery drivers who had worked for Dynamex sued the company for classifying them as independent contractors and not employees. Using the standards of the ABC test, the California Supreme Court ruled against Dynamex, saying that the workers should have been employees and not independent contractors. As a result, using the ABC test became law in the state of California.

Under the ABC test, a worker is only an independent contractor if they meet all three parts of the test: A) The worker is free from the control and direction of the hirer in relation to the performance of the work, both under the contract and in fact, B) The worker performs work that is outside the usual course of the hirer’s business and C)  The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hirer

The second factor of this ABC test means you can’t hire someone to perform similar duties to that of your employees and expect them to be classified as an independent contractor.

Many employers in California who have classified workers as independent contractors (1099) may need to convert that classification to an employee class. Employers will need to review their workers classification and may have to convert some independent contractors to employees.

Author:  Robin Noah, Executive Coaches of Orange County,  www,


Robin Noah


Labor Commissioner Launches Online Registration for Janitorial Service Providers

The Labor Commissioner’s Office has launched an online registration system for janitorial service providers and contractors operating in California to register annually as required by law.

Under the Property Service Workers Protection Act, signed by Governor Edmund G. Brown Jr. in 2016, every provider of janitorial services with one or more employees and one or more janitorial workers must register with the Labor Commissioner’s Office and renew every year.

The Labor Commissioner’s Office urges janitorial employers to quickly register. Those who fail to register by October 1, 2018 may be subject to a civil fine, as will any person or entity who contracts with a janitorial employer lacking valid registration.  

“The online registration tool will make it easy for janitorial employers to comply with the law, and will help us to hold accountable businesses in the underground economy that underpay their workers and evade labor laws,” said Labor Commissioner Julie A. Su. “The registration requirement is another tool for property owners to distinguish law-abiding contractors from wage thieves and to protect honest businesses from unfair competition.”

Janitorial employers are also required to provide employees with sexual harassment prevention training once every two years beginning January 1, 2019.

The Labor Commissioner’s Office has posted a registration search tool that shows whether employers and contractors are properly registered, as well as FAQs.

For more information, call the Licensing and Registration Unit at (510) 879-8333 Monday through Friday from 8 a.m. to 5 p.m. or email

The Division of Labor Standards Enforcement, or the Labor Commissioner’s Office, is the division within the Department of Industrial Relations (DIR) with wide-ranging enforcement responsibilities including adjudicating wage claims, inspecting workplaces for wage and hour violations, investigating retaliation complaints and educating the public on labor laws.

Employees with work-related questions or complaints may contact DIR’s Call Center in English or Spanish at 844-LABOR-DIR (844-522-6734).     

P.O. Box 420603 · San Francisco, CA · 94142-0603

Department of Industrial Relations Release No.18-47          

Author: Robin Noah, Executive Coaches of Orange County,

The Glossary for Nonprofit Governance

Adrianne Geiger Dumond



Many of us in the nonprofit world use terms and acronyms that may be confusing to newcomers – especially young employees trying to learn about the nonprofit as a business. I recently ran across a very useful tool for educating everyone in this business. The glossary should probably be in every manager’s office.

The Glossary is published by BoardSource and can be found under Nonprofit Board Fundamentals on their website. The glossary is alphabetized and runs five pages and has every term that is ever used in this business.

For example: have you ever wondered what the difference was between a 501(c)(3) and a 501(c)(6)? There are also simpler definitions: For example:

  •  Board Development
  •  Disclosure requirements
  •  Emeritus status
  •  Fiduciary duty
  •   Immediate sanctions
  •   Operational reserves

Possibly the most Important definitions provided for novices are the terms for IRS requirements, which can be confusing. For example:

  • Form 990
  • Form 990 – PF
  •  Form 990 – T
  •  Form 1023
  •  Form 1024
  • Or maybe a ‘Federated Organization’ ?

I recommend every nonprofit have a copy of this glossary – maybe even board members might appreciate the information.

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County,

The Uncertainty in Nonprofit Regulations

Adrianne Geiger Dumond



The nonprofit news media is quite frantic since the election. I have read everything from the point that advocacy is now critical for agencies and boards to the notion that ‘rage donations’ might be a good motivator. Actually there has been uncertainty for nonprofit regulations before the election.

Because of IRS scandal and the responsibility for the Affordable Care Act, the IRS introduced the Form 1023-EZ.This Form significantly reduced the level of IRS review for new organizations. The drop in oversight by the IRS of tax-exempt status has caused the states to assume more control over regulations.

In 2004, California enacted its own Nonprofit Integrity Act, which added considerably more control. Significant requirements included a shortened period for registering with the attorney general (30 days after the initial receipt of property), mandatory audited financial statements, and mandatory board or board committee review of senior officer compensation.[1]

Mayer, the noted author below, has made astute observations about these changes. He states:

  • The IRS is not the only sheriff in town. Especially for charities, state regulators have the authority and the willingness to pursue wrongdoing.
  • For compliant nonprofits, increased innovation and cooperation is mostly good news.
  • For noncompliant nonprofits, there is less room to fly below the radar. This highlights the growing sophistication and cooperation of the state nonprofit regulators to work together to catch malfeance.

While naysayers have faulted the incoming administration, there might be a bright light coming. With more jobs, a stronger middle class and a better economy, maybe fundraising becomes easier. But uncertainty remains. 

Addendum: BoardSource, Smart Briefs, January 13, 2017 announced that Pay Pal processed almost $1 Billion in donations over the 2016 holiday season. The Chronicle of Philanthropy stated that 12 wealthy donors surpassed $100 Million each in 2016, and 6 more gave $100 Million exactly.

[1] The Rising of the States in Nonprofit Oversight. Lloyd Hitoshi Mayer, August 11, 2016, Nonprofit Quarterly

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County,


Robin Noah

Robin Noah


Every year about this time I receive calls regarding holiday time off and pays so here are a few reminders.

Employers do not have to offer time off on nationally recognized holidays. However, an employer is obligated to provide reasonable accommodation for the religious practices of its employees unless it can show that the accommodation would result in undue hardship for its business.

Many employers offer a “floating holiday” in addition to the regularly scheduled holidays. This allows an employee to take time off for religious observances that are not covered by the employer’s established holiday schedule. Make sure your company policy clearly explains the company rules. While most employers provide the same holiday benefits, equally within the company’s policy, it is not a requirement as long as the rules are not discriminatory.

Employers do not have to pay Hourly employees for time off on a holiday. They are only required to pay hourly employees for time actually worked.

On the other hand, Exempt employees who are given the day off, must be paid their full weekly salary if they work any hours during the week in which the holiday falls. This requirement for exempt employees did not change under the new federal overtime regulations.

If an employer provides paid holidays, it does not have to count the paid hours as hours worked for purposes of determining whether an employee is entitled to overtime compensation. An employee must actually work 40 hours in a week before he/she is eligible for overtime. Collective bargaining agreements and/or government employers may have contracted other provisions for determining overtime.

Employer’s policy statements should clearly explain the criteria for Holiday time off, including the proration of the amount of holiday pay due to a part-time employee. For example some companies as a matter of policy do not provide Holiday pay to part-time employees.

Use it or lose it: In California, vacation pay is considered another form of wages and as such cannot be taken away from an employee under any “use it or lose it” scenarios. “Use it or lose it” policies should be clearly communicated to all workers in employment policy manuals. If applicable be sure to check your collective bargains agreement or any other legally contracted agreement in your company. Remember that in California vacation earned is considered wages due and payable at the employment separation.

All information in this article is general, not intended to be legal advisement. Please contact your legal advisor for applicable laws.

Author:  Robin Noah, Executive Coaches of Orange County,


Updating Form I-9

Robin Noah

Robin Noah


By now most employers, regardless of size, are well aware that employers have certain responsibilities under immigration law during the hiring process. Failure to comply can be a costly event. Not knowing the law will not excuse business owners or management of business establishments for 1-9 compliance failures. For example the current Form I-9 is valid until Jan. 21, 2017. An announcement was made On Aug. 25, 2016 that the Office of Management and Budget (OMB) approved a revised Form I-9, Employment Eligibility Verification.

USCIS must publish a revised form by Nov. 22, 2016. Employers may continue using the current version of Form I-9 with a revision date of 03/08/2013 N until Jan. 21, 2017.

After Jan. 21, 2017, all previous versions of Form I-9 will be invalid. You can keep up with the changes by subscribing to There are many web sites devoted to the 1-9 including U S Immigrations and Customs Enforcement (ICE)

Did you know? The current administration has dramatically increased the number of I-9 audits to historically high levels, and promises that I-9 enforcement efforts will remain a high priority. For example, on one day, June 15, 2011, Immigration and Customs Enforcement (ICE) issued 1,000 Notices of Inspection of I-9 forms and subpoenas to various U.S. companies large and small. I-9 investigations are at an all-time high, with more than 3,000 audits taking place in 2012 compared to only 250 in 2007.

A few reminders: An employer must: A) Verify the identity and employment authorization of each person hired after Nov. 6, 1986 and B) Complete and retain a Form I-9 for each employee required to complete the form.

An Employer must not 🙂 A) Discriminate against individuals on the basis of national origin, citizenship, or immigration status and B) Hire, recruit for a fee, or refer for a fee aliens he or she knows to be unauthorized to work in the United States.

Consider some of the penalties:

  • Failure to comply with the IRCA’s I-9 rules can result in significant fines, loss of access to government contracts, and highly negative publicity for your company.
  • Employment of unauthorized workers may result in fines up to $16,000 and six months’ imprisonment. Employers that knowingly hire or continue to employ unauthorized aliens can be barred from competing for government contracts for a year.
  • Paperwork violations can also result in significant fines. Each mistake or missing item on a form can result in a $110 penalty, topping out at $1,100 for each form. A missing form would automatically be assessed at $1,100.

You may want to have an independent 1-9 audit conducted as a strategy for ensuring that your business is compliant with immigration related employment practices.

(Excerpts from articles of Adriana Kostencki, Esq.)

Author:  Robin Noah, Executive Coaches of Orange County,

Is it harassment or bullying?

Robin Noah

Robin Noah


Regardless Employers have an obligation to their employees and to the Law when it comes to Harassment and/or Bullying at work

In the past several years, the Equal Employment Opportunity Commission (EEOC) closed 7,256 sexual harassment and bullying claims nationwide that resulted in over $44 million in fines and lawsuit settlements. Last year there were over 30,000 employee complaints filed in California alone! In a recent survey, 27% of Americans reported that they have suffered abusive conduct while at work. How do we stop this epidemic of workplace harassment and bullying?

Workplace bullying is repeated, unreasonable and unwelcome behavior directed towards an employee or group of employees that creates a risk to health and safety:

  • Basically a health and safety issue
  • Affects safe workplace policies
  • Employees can file complaints to the Fair Work Commission.
  • You can be investigated and prosecuted by your State regulator for a breach of health and safety legislation.

Workplace harassment is unwanted behavior that offends, humiliates or intimidates a person, and targets them on the basis of a characteristic such as gender, race or ethnicity. Even when you have less than 50 employees you still need to have written policies regarding these issues. There are very specific guidelines for handling harassment – sexual or otherwise.

Often employers treat bullying and harassment as the same class of problematic behavior. However, the law relating to each of these areas is different, the approaches you take to prevent these behaviors should also differ.

Harassment relates to the prohibition in anti-discrimination laws against sexual harassment and sex-based discrimination in the workplace. These laws differ from health and safety laws in that a victim of harassment can make a complaint to an external agency – in effect, launching a legal proceeding against your organization.

You need to create and implement bullying and harassment policies. Each policy needs to describe what the organization considers harassment and what it considers as bullying. The ensuing action when the policy is violated should also be very specific.

Keep in mind that policies are written so that there is a common understanding of the organization’s behavioral expectations and to what end the organization will take corrective action to provide effective resolutions of these types of problems.

Even if you have less than 50 employees, employers have an obligation to their employees and to the Law when it comes to Harassment and bullying at work.

Author:  Robin Noah, Executive Coaches of Orange County.

Capping the California Sick Leave Benefit

Robin Noah

Robin Noah


In the midst of misinformation and confusion, July 1 marked the day California employers were required to begin providing paid sick leave benefits to their eligible employees.

A key concern is employer’s actively managing compliance by following the rules. For example as an employer you are required to have a policy in place to cap Sick Leave benefit at 3 Days.

California’s new sick leave law also carries consequences for noncompliance. If employers do not comply with the new law, they can face Labor Commissioner Enforcement measures that include awarding back pay, damages and penalties up to $4,000. Small employers included.

The California Chamber of Commerce is one of the organizations that is providing information for administering the law. Here are some highlights from CEO Allan Zaremberg’s article of the July 10, 2015 Cal Chamber newsletter.

Sick Leave Policy Important

There is a lot of misinformation about what this law requires. An employers must create a policy addressing the amount of leave they are providing or else they will be subject to the statutory mandated accrual rate of one hour of sick pay for every 30 hours an employee works.

“This means that if employers are not clear about capping their leave at three days, full-time employees will be entitled to 69 hours of paid leave per year and they will be allowed to carry that over to the next year, and so on. This is nearly nine days—not three—if the employee works a 40-hour workweek. It is critical that employers understand that they must have a policy in place—preferably in writing—that clearly communicates to employees about the amount of leave they are providing.”

The law also includes several notice, posting and recordkeeping mandates The Labor Commissioner has released the poster, and it’s available on the Labor Commissioner’s website

  • Wage Theft Notice: The Wage and Employment Notice (Labor Code Section 2810.5), which employers have been required to provide to nonexempt employees since 2012, has been updated by the Labor Commissioner to contain information about an employee’s right to accrue and use paid sick leave and about employee protections under the law.
  • Pay-Stub Notice: An employer must provide an employee with a written notice setting forth the amount of paid sick leave available to the employee each pay period.
  • Recordkeeping Requirements: Employers will need to keep records for at least three years which document the number of hours that each employee worked and paid sick days accrued and used by each employee.

The law also specifies that employers are prohibited from retaliating against employees who take sick leave.


Author:  Robin Noah, Executive Coaches of Orange County,