Under the old regulations, an organization that wanted to be recognized by the IRS as a publicly supported charity instead of a private foundation had to go through an extended two-step process. First, the organization had to declare that it expected to be publicly supported on an on-going basis. Then, after five years, it had to file Form 8734, Support Schedule for Advance Ruling Period, showing the IRS that it actually met the public support test. If it didn't meet the test, it was designated a tax-exempt private foundation and would be subject to stricter rules.

The new rules no longer require the organization to file Form 8734 after completing its first five tax years. Moreover, the organization retains its public charity status for its first five years regardless of the public support actually received during that time. Instead, beginning with the organization's sixth taxable year, it must establish that it meets the public support test by showing that it is publicly supported on its Schedule A to Form 990, Return of Organization Exempt From Income Tax.   Transition rules apply to organizations that have previously received advance rulings.

The first of these documents, Background Paper – Summary of Form 990 Redesign Process, provides a 5-page explanation of the redesign process, from the release of the form’s discussion draft in June 2007 to today’s release of the new form’s instructions. Topics include reasons for the redesign, the public comment process, key changes from the old to the new form, and some next steps organizations and their preparers should consider as they get ready for the 2009 filing season. This document also summarizes the transition relief available to many smaller organizations for the 2008 and 2009 tax years.

The second document, Background Paper – Form 990, Moving from the Old to the New, lists and summarizes the parts and schedules of the new form, highlights which portions are new or significantly revised from the 2007 form, and compares material differences between the 2007 and the 2008 forms and instructions. This document contains a separate description of each part of the core form and each schedule, which explains the purpose, rationale and overview, key points, and effect on reporting relating to that part or schedule. The description of each schedule also includes an explanation of how an organization determines whether it must complete that schedule.

The third document, Background Paper – Changes to April Draft Instructions, provides an overview of significant changes to the April draft instructions and lists areas requiring further study for future years. The document also includes a detailed list of material changes to the April draft instructions, prepared in the order in which they appear in the instructions – first - the general instructions, and then the specific instructions for each part and schedule of the new form. 

The issuance of the revised instructions and these accompanying background documents will help organizations and practitioners prepare to file the new 2008 Form 990 as the 2009 filing season approaches.  The Internal Revenue Service intends to release draft instructions to the Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, in the next few weeks.

"Unrelated to Google Health but in the interest of helping people get healthier, we launched our Go for Good campaign with the Cleveland Clinic. The Walk for Good iGoogle gadget encourages you to be good to yourself by walking regularly and tracking your progress. If you finish week 15 of the program by October 25th this year and have completed at least half of the total walking program by then, you can vote to tell us which of the health charities from our list should receive part of a $100,000 donation."

This year, the eBay Foundation has chosen three nonprofit organizations to help raise funds. Chosen from the responses of the eBay community and put through a series of evaluation, the eBay Foundation has selected First Book, Best Friends Animal Society, and OxFam America to receive its share of $1 Million donated by eBay. In addition to the $1 Million donation, eBay has set up a webpage for visitors to donate to these charities with 100% of the donation going to these organizations. To sweeten things more, the eBay Foundation will contribute $1 for each person who donates through the Community Gives campaign, up to $100,000. All eBay Foundation funds will be divided equally among the three nonprofit organizations.

For more information about the Community Gives campaign, please visit Community Gives.

There is a new trend arising in both the nonprofit and tourism industries.  Volunteer tourism, or "voluntourism", is an emerging trend that is gaining popularity.  According to a survey sponsored by MSNBC and Conde Nast Traveller, 55 percent of the participants in the survey said they were interested in volunteering on their vacation.  When asked if the participant has ever taken a volunteer vacation, the survey showed that 20 percent has taken at least one. Of the 20 percent who have taken a volunteer vacation, 95 percent of them said they would likely take another.

CNN

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(CNN) -- Ordinary Americans aren't the only ones being punished by tough economic times. Charities say they need help, too.

Food bank shelves across the country are getting emptier because of high food prices and increased demand.

Charitable groups that help the poor -- food banks, thrift stores, shelters -- say the slumping economy is eroding their ability to help the nation's needy. They report declining donations and a surge in people seeking help.

Bill Bolling, the founder of the Atlanta Community Food Bank, says he's experienced several recessions but never seen so many working people visit food banks. Bolling's charity donates food to 800 nonprofit groups in Georgia.

"This is new for us," Bolling said. "People are giving up buying groceries so that they can pay rent and put gas in the car."

National charities like Goodwill Industries International, Inc and The Salvation Army give the same grim assessment -- donations are down, needs are up.

At least 1.3 million more people have enrolled in the federal Food Stamp Program compared to last year, says Ross Fraser, a spokesman for America's Second Harvest, one of the nation's largest hunger-relief groups. It donates food to at least 200 food banks.

"People who have been in food banking for years say it's the worst they've ever seen," Fraser said.

People often assume food bank customers are homeless. But several food bank officials across the country say that many of their customers are working class people and their numbers are increasing.

They are people like Lynette Copeland, who works full-time as a clerk at a rehabilitation center in Atlanta, Georgia. She's buying a Habitat for Humanity house and drives a car. But she says she doesn't make enough money to pay her bills.

Copeland says she depends on the Atlanta food bank to feed the four grandchildren she raises alone. She says the high costs of food, fuel and daycare force her to eat meat sparingly and shop at Goodwill.

"Although everything is going up, your pay rate doesn't go up," she said.

Lately, Copeland says she has noticed a change in the makeup of the customers visiting her food bank. Instead of the homeless and destitute, people come from all walks of life: the elderly, men in security guard uniforms and mothers with children.

Many are first-timers. Some are too ashamed to ask for food in front of others; so they walk to the side of the food bank where fewer people are gathered to receive food, she says.

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PORT-AU-PRINCE (Reuters) - Haiti faces a "major crisis" if international donors fail to provide urgent aid to help feed its poor, a top official with the World Food Program said on Wednesday.

"It is not so important how much money we are able to raise for our cause," Pedro Medrano, the WFP director for Latin America and the Caribbean, told a news conference. "The question is how much the international community and all of us are prepared to pay for not doing what needs to be done."

The WFP appealed for $54 million in fresh funding to offset soaring food prices in Haiti and provide the country with about 50,000 metric tons of food between now and December.

"This is a major crisis. Are we going to intervene when it's too late?" asked Medrano, who spoke as he wrapped up a brief visit to the impoverished Caribbean nation, the poorest country in the Americas.

According to WFP figures, 66 percent of Haitians live on less than $1 dollar a day and 47 percent are undernourished.

At least six people were killed during riots in Haiti this month as protests against rising food prices and the high cost of living turned violent.

Lawmakers sought to quell the anger by dismissing Prime Minister Jacques Edouard Alexis, who was fired on April 12. But there are fears public unrest could erupt again and that the food crisis could spark an increase in the number of Haitians who attempt the dangerous 600-mile (966-km) sea journey to illegally enter the United States.

Angry protests over high food costs have rattled several countries in recent weeks as bad weather, competition with biofuels, market speculation and rising demand in Asia send the price of many staples skyrocketing.

Survivors are seen at their home, which was destroyed by Cyclone Nargis, near the town of Kyaiklat,...

Survivors are seen at their home, which was destroyed by Cyclone Nargis, near the town of Kyaiklat, southwest of Yangon, May 7, 2008. Survivors with harrowing tales of villages smashed by Cyclone Nargis are paddling wooden boats to the Myanmar town of Bogalay to find whole streets destroyed and food and water scarce. Almost no aid has reached one of the hardest-hit towns in the Irrawaddy delta of around 50,000 inhabitants, where the storm tore rice mills apart and washed away fishing boats.

(Reuters)

As people around the world respond to the devastation wrought by the cyclone that ripped through Myanmar on May 5, charity watchdog groups are warning donors about bogus charities that may pocket donations instead of sending the money to the people of Myanmar.

Daniel Borochoff of the American Institute of Philanthropy says that while there have not been reports of bogus charities so far, it may be too early to identify potential scams.

"There are groups that are raising money, asking for donations that do not have programs, and it's not even clear if they can get into the country," Borochoff told ABCNews.com. "We're cautioning donors to make sure they donate to organizations that they know can do something with the donations. Anybody can pretend to be someone else and get out there and raise money and give it to some other group."

The Better Business Bureau provides eight tips to guide Americans as they try to find reputable charities:
1.) Donate to organizations that are accredited by the Better Business Bureau and are experienced in handling donations in crises.
2.) Find out if the charity has on-the-ground presence in Myanmar.
3.) Find out who will benefit from the donations and what types of assistance they will be provided.
4.) Be cautious of charities that claim to donate 100 percent of their donatiions.

Under the IRS Revenue Ruling 2007-41, “organizations that are exempt from income tax under section 501(a) of the Internal Revenue Code as organizations described in section 501(c)(3) may not 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.”

The IRS contends that “reasonable belief exists that the United Church of Christ has engaged in political activities that could jeopardize its tax-exempt status” by allowing Sen. Obama to give a speech that they suspect was a opportunity for the senator to campaign.  The IRS pointed out that the senator’s volunteers were also present where he spoke.

Officials from the church have defended the church by adding that there were many others who represent the arts, sciences, media and government that also spoke at the celebration.  Church officials have also noted that the invitation extended to Sen. Obama occurred months before he declared his candidacy.  Furthermore, Sen. Obama’s speech was motivated by his faith, not politics.

Other churches and church officials are also in the hot spot, caught in their own set of politicking investigations.  In California, Pastor Wiley Drake of the First Southern Baptist Church in Buena Park is under a formal investigation by the IRS for distributing a press release endorsing Republican presidential hopeful Mike Huckabee in August of last year.  Drake has also endorsed Huckabee on-air through a Christian radio program he hosts.

Drake’s lawyers contend that in both cases Drake endorsed Huckabee personally and not as a representative of his church and that this distinction was clearly made.  Therefore, Drake’s actions should not reflect upon his church and should not put the church’s tax-exempt status at risk.

If you are unsure whether your organization’s activities are in violation of the IRS Revenue Rule 2007-41 (Political Campaign Intervention), click here for more information.

By federal law, nonprofit organizations are required to pay tax on income generated through business-like activities that are not "substantially related" to their charitable mission.

The IRS recently released a study of business practices of charities across the nation, which found that roughly two-thirds of public charities report little to no taxable income from activities unrelated to their core mission. In fact, some charities reported losses after deductions and other calculations were taken into consideration.

Lawmakers and the IRS claim that charities are taking advantage of the laws governing the Unrelated Business Income Tax (UBIT), giving them an unfair advantage against private businesses who are not exempt from paying income taxes.

But legal experts argue that charities are not doing anything illegal but simply following the federal rules and guidelines that allow them to take deductions for their operating expenses protecting their income from tax.

Marc Owens, former chief of the IRS's tax-exempt and government-entities division, said, "The UBIT rules serve more as a boundary than as an actual source of revenue to the government. It's a barometer that charities use to make sure they are keeping true to their mission."

However, Steven T. Miller, commissioner of the IRS's tax-exempt and government-entities division, told the House Ways and Means Committee, advocates of small commercial businesses, in July last year that "[this] movement raises a number of concerns, including the erosion of the nation's tax base, unfair competition with the commercial sector, and potential damage to the public's support of the charitable sector."