Month: May 2015

2016 Elections Non-Profit Update Part 2: Lobbying

Last week we talked about the kind of political activities nonprofit organizations can (or cannot) engage in. Fortunately, nonprofit organizations have other options for influencing policy outcomes, including lobbying. A 501(c)(4) organization can engage in unlimited amounts of lobbying (unless it receives federal funds, in which case, it can’t do any lobbying at all). And contrary to popular belief, 501(c)(3) organizations can lobby as well, just in a more limited form. This week’s post takes a closer look at what a 501(c)(3) public charity can do in the lobbying arena. The general rule is that a 501(c)(3) public charity may engage in “insubstantial” amounts of lobbying, unless the organization’s primary objective can only be achieved by adopting (or defeating) legislation, in which case even insubstantial amounts of lobbying are not permitted. First, what is this “lobbying” we’re talking about? The Internal Revenue Code speaks in terms of “influencing legislation,” which means: contacting, or urging the public to contact, members of a legislative body for the purpose of proposing, supporting, or opposing legislation; or advocating for the adoption or rejection of legislation. Lobbying can be done through direct communications with legislators or indirectly through the public (“grass roots” lobbying). “Legislation,” in turn, essentially means anything that gets voted on by a federal, state, or local governing body. It includes international laws (i.e., treaties) and public referendums. It does not, however,...

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2016 Elections Non-Profit Update: Let’s Get Political

Election season is upon us. And unfortunately for those of us who prefer our evening television without political ads, it’s the 2016 season. We have a long road ahead of us. Along that road, we can expect to see a lot of debate and hoopla around “Super PACs,” which are anticipated to pour hundreds of millions of dollars into the election. But we can’t all be Super PACs. So what role can “normal” non-profit organizations (the 99% of the non-profit world, if you will) play in the upcoming elections? The short answer is a lawyer’s two favorite words: It depends. Specifically, it depends on what kind of non-profit organization you are. 501(c)(3) non-profits are the best known and the most common, so we’ll start with them. 501(c)(3)s cannot participate in political activities at all. More precisely, they cannot “participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” (26 USC §501(c)(3)) The amount of participation is irrelevant; even $1 is prohibited. We could quibble over who is a “candidate” and what is a “campaign,” but unless you really want to delve deeply into these issues, you’d be wise to stick with the general prohibition. (And note, too, that the rules for 501(c)(3)s are different from the rules of the Federal Election Commission....

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Back to the Shredder: Protecting PHI in Paper Documents

In a prior post, we discussed the importance of taking the simplest of steps toward your ongoing HIPAA compliance: hitting the “update” button on your software. This time, our reminder is to go old school, and shred your paper documents. This month’s HIPAA lesson comes courtesy of Cornell Prescription Pharmacy, a compounding pharmacy with a single location in Denver, Colorado. Cornell recently agreed to settle potential HIPAA violations with the Department of Health and Human Services, Office for Civil Rights (OCR). The settlement had newsworthy origins: In 2012, the Denver NBC affiliate 9 News, following a tip, discovered stacks of documents containing patient information in an unlocked dumpster in the pharmacy’s parking lot. Two days after OCR received the 9 News report, it initiated an investigation into Cornell. OCR’s investigation ultimately determined that the dumped documents contained the protected health information of more than 1,600 patients. At the completion of its investigation, OCR found that: Cornell had failed to reasonably safeguard protected health information; Cornell had failed to implement written policies and procedures to comply with the Privacy Rule; and Cornell had failed to train its employees on HIPAA compliance. Cornell’s settlement comes with a $125,000 fine and a corrective action plan to correct deficiencies in its HIPAA compliance program.  Specifically, Cornell must adopt and implement written HIPAA policies and procedures, update the policies and procedures at least annually, distribute...

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Spring Cleaning: Business Records Edition

The arrival of spring tends to inspire us to sweep away the cobwebs, clean out our closets, and make our homes fresh and orderly again. It’s also a good time to do a spring-cleaning of our business records. Presumably you just wrapped up your tax filings for the year, a process that usually (if painfully) helps you get your financial records in order. Before you lock up your filing cabinets again, take some time to review your corporate records and compliance activities to make sure everything is in order. What follows is a list of some of the items and issues you should watch for. Your attorney can also help you with this process. • Corporate filings. In most states, the Secretary of State’s annual reports are due around this time of year. City and county business licenses also come up for renewal annually. Have you made all the required filings and paid all the applicable fees? • Corporate governance policies. These documents, which can be as varied as a record retention policy or a whistleblower protection policy, are essential parts of your internal governance. Is your business operating in compliance with the policies, or is it time to update the policies to better reflect the way your business operates? • Employee Handbook. Your employee handbook is a living document that needs regular review, both internally by you and,...

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