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Hello and welcome to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent. I’m your aptly named host. I want to send personalized podcast pleasantries to ah at lady luck kada on twitter, she listens to us on the f train in new york city. Hello, lady licata. If you tell me where you listen, i’ll shout you out, too. I’m glad you’re with me because i’d be thrown into acquired bronchi act asis if it came within my ken that you’ve missed today’s show labor law attorney thomas wass l, a partner at cullen and dyckman, says non-profits often make mistakes around employees versus independent contractors it’s not enough to pay them buy-in voice and when bringing in volunteers and interns, we’ll keep you on the right side of the law and advocacy and lobbying after last week’s show is your organisation allowed to tell the f c c what you think about net neutrality? How far can you go and what’s being done to clearly define what’s allowed around lobbying? Jean takagi, our monthly legal contributor and principal of the non-profit and exempt organizations law group neo, has the answers on tony’s take two i am not objective on net neutrality. We’ll talk about that. We’re sponsored by generosity, siri’s hosting multi charity five k runs and walks, i’ll have more to say about them. I’m very glad that subject of labor law for non-profit springs, tom will sell to the studio. He’s, a partner in the law firm cullen and dyckman in garden city, new york, and in new york city, he’s been advising employers on a wide range of labor and employment law matters since nineteen eighty three he is president elect of the long island, new york chapter of the labor and employment relations association. Thomas l welcome to the studio. Nice to nice to be in your studio, tony. Pleasure to see you here. I’m glad we could do it face to face. So employees versus independent contractor, it turns out, is not enough to just pay somebody buy-in voice. And then, while love they’re they’re an independent contractor. That’s absolutely enough if you want to get into trouble. But it’s not enough if you want to do it right. Okay, basically, whenever one person is performing services for another person or another company, the presumption is that there are an employee and that with everything that that entails, including federal taxes, state taxes, worker’s compensation benefits, unemployment insurance benefits, employee health benefits, things like that in order for them to be classified properly as an independent contract that there’s a number of tests that they need to meet. And if they don’t meet those tests and accompany miss classifies employees big trouble with the department of labor. Okay, we’ll talk about the misclassification ramifications, and so now we’re talking about federal and state, the the where where is this test? This test is from the i r s and then and then well, is that the eleven points is that from the irs? Absolutely. The irs the internal revenue service has an eleven point test, which is used for determining whether or not you have to take out taxes from people’s wages, okay, but every state also has its own version of the test there there pretty similar, but in terms of whether or not you need to contribute for worker’s compensation benefits or unemployment insurance benefits, and they all apply pretty much the same type of test to determine the employee status. Okay, so it sounds like you’re in pretty good shape if you’re following the irs test, which we’re going to talk about, but you still need to enquire at the state level or or you’re not because you’re not a hundred percent safe if you’re doing following just the irs. That’s, that’s absolutely true in other words, each state can have its own rules and merely complying with the federal law that that’s fine in terms of federal taxation. But certain states have have stricter rules with regard to treating people as independent contractors versus employees. So you need to see counsel in the state in which you practice. I practice in new york, so you know, my comments about any law would be limited to anything in new york state and federal law. Okay, we’ll stick with the federal with the caveat that you should check the state level, but you’re on your you’re well, on your way if you’re if you’re complying with the irs regs, i imagine, absolutely. Okay. Okay, so are we these these eleven items? Eyes is basically around the relationship between the employed, the non-profit and the person doing the work. Absolutely the key elements in the test without without trying to go over check checklist abila talk on some of them. Yeah, we’ll get to something it’s a degree of control that thie and i’m going to go. I’m going to use the term employer here, even though we may say it’s a contractual relationship, okay, but no, we’ll say or the employer of the company, the relationship between the company and the person performing the service is in an employment relationship. For example, the company tells the employees where to work, what time to show up what their duties are? Ah, and what do they report to who they’re going to supervise if they’re going to supervise anybody, things like that in a relationship like that that that tends towards the employer employee relationship as opposed to an independent contractor for an independent contractor, you basically say here’s the job, here’s here’s, what i want you to accomplish, maybe some general guidelines do it when you think it’s appropriate, although there may be deadlines set, but i’m not going to tell you how to do it. I’m not going to supervise you on a day to day basis. I’m not going to provide you with the materials to do it. You do it on your own and i’m simply going to pay you a fee, which is another important distinction there the fee basis versus an hourly or salary type basis? Okay, we’ll get to that. You you touched on something that i want to explore a little bit, the place where the work is done. So you you can’t have the person always coming to your office to perform the work now that you can’t have the person doing the work in your office. But it really that would depend on the nature of the work. For example, if if you if you have employees doing the same work and now you’re going to bring in somebody else from the outside to sit alongside your employees and do the same work? Well, that’s an indicator not not it’s, not a single point test, but it’s an indicator of an employer employee relationship. Now, if this person has his or her own business on the outside, has business cards may work from more than one company at the same time or one after another. Oh, and you’re simply hiring that outside company to perform services for a limited period of time? Well, that it tends to lean more towards the independent contractor relationship. How do we balance these eleven? Which we’ll get into some detail about some of the others too? But is it ah, like majority, if you have, if you have six out of the eleven year okay, andi it’s going to go one way or the other based on a majority? Or how does it work? Well, there is no bright line. Testa’s lawyers like to say, i think to some extent you apply the duck test if it looks like a duck and walks like a duck, and quacks like a duck, it’s a duck it’s very fact specific and a trier of fact, whether it would be through the department of labor or worker’s compensation board or in a court of law would look at all of these factors and say, well, okay, the control factor tends to lean towards employees, but the independent company factor tends to lean towards independent contractor and way all of these factors together, and then come up with an answer. Okay, so these eleven points are are the things that iris is going to consider? This is what they’re going to look at, and they’re going to put it all together and they’re going to make a decision. Absolutely. Okay? And i guess it would work similarly at the state level. Like when you mentioned department of labor. We’re talking about the state department of labor. Could be state of the state or the united states department of labor. There’s both and and they’re very interested because independent contractors aren’t entitled to overtime or minimum wage or anything like that. You you pay them a fee or you pay them. You pay a company a fee to do something and that’s. Fine. But if their employees and they work more than forty hours in a week, they’re entitled to overtime. Yeah, we may have time to get more into that. Right. Okay. Um, i think we will, actually. What are some of the other side? The other factors in these in these eleven points. But as i mentioned it’s the ah it’s. How people are paid. Yeah. That’s a good one. Sorry, let’s. Talk about that one. The fee versus fee versus salary. Right. Well, typically, an employee may get an hourly wage. May get a weekly salary. It’s generally, the relationship is often not always but often sort of open ended. That is to say, we’re going to hire you not necessarily for a two week barrier or until you finish this job, but we’re going to hire you as an employee and keep you on. But we pay you on a on a paycheck, a supposed to an independent contractor who would normally be paid through some voucher system or through through ah, obviously issuing a ten, ninety nine, which is the tax form for independent contractors and might be in a lump sum. It might be in regular payments, but it’s not based on number of hours worked or anything like that that again, depending on how you structure the deal, that would tend to lean more towards employees or more towards independent contractor. What about? I think you mentioned giving someone the tools to do the work so you shouldn’t be giving them ah, laptop tto do the work or or other things or certainly office space dedicated in the office? I mean, that’s tending to look like employment, right? When you’re giving them that stuff? Absolutely. If i say, come into my place of business and i’m going to give you everything you need to do the job and you don’t have toe put anything on the table. Other than what i give you that’s, the hallmark of an employee, as opposed to an independent contractor who brings their own knowledge, skills and tools to the table and does the job that you’re paying them to do. We’ll go out for a short break, and when we come back, tell marcel and i’m going to keep talking about this, and then we’ll get into volunteers and interns. And then i believe we will have time to for overtime. For employees, you’re supposed be paying your employees overtime. Do you maybe want to turn this off? If you’re listening in the office on monday, only the bosses want to hear this. We’ll get into all that stay with us. You getting anything shooting? Good ending, you’re listening to the talking alternative network e-giving. Nothing. Cubine this’s. The way we’re hosting part of my french new york city guests come from all over the world, from mali to new caledonia, from paris to keep back. French is coming language. Yes, they all come from different cultures, background or countries, and it comes desires to make new york they’re home. Listen to them. Share this story. Join us, part of my french new york city. Every monday from one to two p, m. Are you stuck in your business or career trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping conscious people. Be better business people. Dahna yeah, you’re listening to the talking alternative network. Dahna oppcoll welcome back to big non-profit ideas for the other ninety five percent. Let’s, send some live listener love arco, idaho and orlando, florida live listener love to you very glad you with us let’s, go abroad. Seoul, korea anya haserot, islamabad, pakistan i’m sorry. I don’t know how to greet you in, uh in is it pasha pasha? Pashtun passion is that i’m not sure what, but live listener love to you in islamabad, irrespective of how i would say it in your in your tongue, in your language changing china, always welcoming the chinese lots of listeners. Ni hao, nagoya and tokyo, japan sending you konnichi wa and there are others will get to them kuwait also, i wanted to get to kuwait. Um attorney thomas l let’s see if you’re if you’re the person who’s doing the work, is getting their income from a bunch of different places. Is that that’s that’s? One of the factors, isn’t it that’s, clearly one of the factors, and and that would certainly militate or tend towards a finding of an independent contractor relationship kapin if you hire a company, the company may have its own letterhead may have its own invoices. May have its own business cards may have an ad in the yellow pages for those of us who still actually use paper yellow pages or maybe a gn internet list thing nowadays. So if you hold yourself out as an independent company and maybe even filed company tax returns on have a company workers compensation policy, things like that that again would lean towards the independent contractor relationship rather than employees. If you are ah found by the irs to have misclassified people doing the work, would you expect that the irs is going to report to your state department of labor that that they’ve found ah, misclassification, that’s, that’s a really good question, and i get asked that those kinds of questions a lot from lots of different employers, i tend to represent employers, and my understanding is no, they don’t necessarily do that. That particularly if you settle the case, the words that come to you and say you messed up, you need to pay x amount, and if you settle it voluntarily, they’re not going to go broadcasting it to the world so that there could be more agencies to come and knock on your door. Because that would discourage you from settling in the first place that’s not to say that other agencies won’t find out about it. And certainly if ah, if a case republic if if you would have to go to court, which is a public record and other agencies saw that they could be knocking on your door as well, where do you see employers messing up? Well, it’s again, it’s the any of any of these factors will any or any role these factors? I have clients, and obviously i’m not going to mention names uh, i brought you for, so i did some provocative name dropping, i thought i’d like to keep practising law for a few more. Alright, alright, you’re not retired, they you know, i have i have clients that have they’ll bring people in and they treat them as independent contractors and they say, well, they’re only going to be here for two months. I’m hiring them for a special project and i say yes, hiring see, that was the keyword there on, and it doesn’t matter if you’re hyre it is a temporary employee or a permanent employee that’s one factor, but not not controlling. Temporary employees, their employees, so you have to treat them as contractors, and i’ve had a number of audits fromthe state workers compensation, border unemployment, insurance division come in and say you’re not paying premiums to these people cause you’re not treating them as employees. Pay up. What? What are the penalties let’s talk about the federal level? What would you expect from the irs if ur misclassifying well again? In most cases, if if you own up to the to the mistake, you’ll certainly have to pay what’s owed but safe for the i r s not only will you have to pay what the employers share of the taxes, would it really be? You may also have to pay the employees share of the tactics so security taxes that should have been paid exactly pay both the employer and the employee because the employer messes up, the irs isn’t going to go to the employees and say, by the way, some of that money you got, we want you to give some of it back. It’s, the employer’s responsibility to properly pay the employees. Okay, so the back taxes that were owed, what else? What else might be? Expected? Well, there there could be civil penalties involved to or if it was done knowingly over a long period of time, with no knowing that you were violating the law usually second or third offenders, there could be some more severe penalties involved as well. You’re always welcome teo disagree with young arrests, right on contest there, their belief that you’re misclassifying absolutely, you know, just just cause the irs says so doesn’t make it so. But the presumption is that these people are employees, right, and it’s up to the employer to prove based on the law that these people are actually independent contractors. So if you if you want to fight them, you better have a pretty good case. Let’s move teo volunteers and interns what? What are what are non-profits often getting wrong around these? Well, the good news for not for not-for-profits we call them not-for-profits in new york, but non-profits same, the good news for non-profits is that you’re allowed tohave volunteers in the in the in the in the for-profit sector, you basically can’t have volunteers. Anybody who does work for you has to be paid, but in the in the nonprofit sector you can’t have volunteers, but there are some rules about that as well. The work that’s being volunteered for can’t be the same kind of work that’s otherwise being done. In other words, you can’t have a paid clerical person sitting at a desk and then have somebody else come in and say, well, i’m going to volunteer and i’m going to do the same work sitting side by side the paid pearl really? All right, so let’s, let’s taken example of that suppose closed. You have employees that are preparing mailings. You’ve got a five thousand piece mailing going out and you don’t hyre ah, male house, you’re doing it inside and you’ve got people stuffing in printing, stuffing envelopes, putting stamps on and then you bring some volunteers in to do that same work side by side with employees. That’s that’s, not a volunteer. I’d be very concerned about that. If i was the employer and i if i was their attorney, i would be tell saying we need to take a long, hard look at this because again, people sitting side by side, some people are being paid. Some people are, quote unquote volunteering very dangerous situation. Even if the volunteers volunteered, i mean, even if they walked in and they love the mission, they’ve said, i want to help you. How can i help? And you said, well, we could use ten hours on, you know, over the weekend to put this mailing together well not-for-profits tend to be generally charitable, religious or religious organizations and the servant public purpose and that’s why they’re allowed tohave volunteers to some extent, but to the extent that you’re basically just doing the same work as other employees and saying, i don’t want to get paid for it, the law doesn’t really sanction such things. Oh, my, okay, i got to take a little tension because you mentioned for-profit companies, and i’m interested in that on the intern side. What about all the unpaid internships that are coming right now? It’s, it’s, summertime, what about those? Well, and you read about them all the time in the paper about the irs or the part you read about them in the new york journal? Maybe i don’t not seeing it in the where i’m seeing in popular mohr maur, general press well, you get for-profit are allowed to have interns. But not that you can’t just but but i had on somebody and say, hi, you’re an intern, you’re gonna work for me and you’re not going to get paid. That would be violating the minimum wage laws for, among other things, but somebody can provide an internship if under certain circumstances, if they’re getting some sort of academic credit from an outside institution, if they are getting some sort of actual training from you that’s not specifically tailored to your organisation, but but taylor to their field of study, if they understand from the outset that they’re not going to get paid and that’s an internship also, it has to be a relationship where i understand from the outset otherwise it’s indentured servitude you tell them you’re going to get paid and then they don’t they don’t see a paycheck. That’s ah there’s got okay, that’s clearly got to be rolled. Believe it or not, that’s that’s what i passed that spelled out there, they have to understand that somebody’s done it? Yeah, all right, on and also they’re supposed to actually because they’re an intern and learning from you they’re supposed to be, if, if anything, and impediments. To the business not, ah bonus to the business. In other words, if the business says we’re going to hyre fifty interns to do all sorts of work for us and make money for us that’s not really a bona fide internship, the purpose of the internship, the primary purpose is to give training to the intern, not to make money for the company. And if it’s really a benefit to the company that’s one of the factors that will be looked at to say these air, not truly interns. Okay, thank you for taking little digression in tow. For-profit i love it, you know, you have these answers on top, your head man xero no notes, which i admire, i don’t like i don’t like notes, really? I have notes, but it is just off the top percent wonderful. I’ve been doing it for thirty plus years. I know you start to learn it if that helps. Yeah, yeah. So let’s go back to the non-profit side there are so the general rule is that you can’t have unpaid work as volunteers. But then there are these exceptions that we were starting to get into, right if it’s a bona fide organization, charitable organization and people are truly coming and say, i want to lend a hand to do you were having were having a blood drive or we’re having a special event, and i’m a community member. I’m going to come in and volunteer to give some of my time to help you that’s a true volunteer, but again, if if they’re volunteering simply to do work that the company not-for-profits would otherwise be paying for that’s a problem, employees of the not-for-profits basically can’t volunteer to give away free work. That’s interesting. I wonder if that comes up much. I don’t know. Well, if you see it well, i haven’t seen it, but it’s addressed in a number of decisions or regulations where somebody’s tried it. Yeah, obviously what’s in there? Yeah, right. That’s. Interesting. Okay, if you haven’t, i’d say you have an employee working for not for profit and and and there’s some child care, you’re going to sit with some child kind of thing. Simple. I don’t want to use the term baby sitting because that sounds majority, but some sort of ah monitoring situation, which is not within the normal scope of that. Employees work that might be okay for a volunteer for the employees, but certainly the employees can volunteer to do additional work that employees already getting paid for. And where do you see non-profits making mistakes around the volunteer and in turn, well, i get calls from from some of my not non-profits and so, you know, we’ve got we’ve got all these people are in here and, you know, they’re here for, you know, ten or fifteen hours a week doing all this stuff, and i say, really what’s your first question, what were some? Of course? Well, i say, well, what are they doing? Do you have other people that you’re paying to do the same work? And they’re working side by side are there are these people already employed by you? Because if they are that’s major red flag onda geun, if they’re duplicating or substituting their substituting for paid employees, that’s, that’s a problem? We’ve got somebody who’s out on a totally leave elearning leave a family medical leave act type of leave, so they’re gonna be out for twelve weeks. So we’re gonna have a volunteer fill in for twelve weeks, okay? Do you have? A sound of a klaxon in here or, you know, piela only like that. But that’s just my voice is all we have is scary enough. Thrill enough weak enough as it is. That’s very bad. So paternity leave maternity leave. You can’t have a volunteer filling in you’re basically saying, i’m going to have somebody do the same work as a paid employee, but i’m not going to pay them no lost don’t let you do that. All right? I think that’s very interesting. All right, so what do we do, teo, to remedy this. So when your clients are then calling and there, then finding out in this call that they’re they’re running afoul, what do we do next? Well, i tell them aside, i’m obligated to do as an attorney. You should change this, and you should start treating people correctly going forward because every day that you’re in violation of the labor laws or the or the tax code is ah, is a new problem. If you change things today or tomorrow and start treating people properly, pay them, then you don’t really have a problem. And by the way, all you have to do to comply with most laws is pay minimum wage and you know you don’t. You could have people have clerical people making fifteen dollars an hour. I need somebody to fill in, and i’m just going to pay the minimum wage. You can do that, you just can’t pay him nothing. You can’t have them volunteer if they’re not truly bona fide volunteers, can you work out some alternate form of compensation besides, besides money? Like maybe they get some benefits of services from the organization i get sort of a barter arrangements. What i’m thinking of is that is that possible barter arrangements are legal, but their taxable i don’t represent any barter companies, but i happen to have a close friend who’s involved in a bartering company, and i know that when party a’s trading goods or services with party be, both sides are issued ten, ninety nines and and the company, the bartering company, will report that to the irs. So if you just say instead of paying you seven twenty five an hour, which is the federal minimum wage, it’s hyre in new york state and a lot of other states, but but instead of paying you seven twenty five an hour for forty hours, which is with two, two hundred ninety eight dollars a week. I’m going to give you two hundred ninety dollars worth of free food, that’s that’s a taxable event and frankly, it doesn’t comply with the law. The fair labor standards act, which is the federal law that requires people get paid, requires that you get paid in cash or the equivalent of cash, not in goods and services they’re certain deductions allowed, but not completely excellent. Now we’re talking about federal and state law here, a cz well around the volunteers and interns. Absolutely okay, um, so we’re talking mostly federal, but with the same qualification you need to check about check what the standards are in in your state are you? Are you still pretty well on your way to compliance? If you’re if you’re complying with what the irs requires? Like like we said over on the independent contractor side e, i would say, you know, qualified lee, if that’s a word, if you’re complying with the federal rules, you are more than likely qualita complying with state rules, but i certainly can’t give that as a guarantee without taking a look at the state rules understand, okay, let’s, spend a little a little time. We’re just a couple more minutes on overtime for employees. What is the problem here that you see? Big problem is that certain employees aren’t being paid overtime because employers think they don’t have to. And the biggest fallacy, the biggest myth that i see is and and employers and employees both believed this is that if you’re paid a salary, you don’t get overtime that’s not true, you need to be paid a salary in order to be considered exempt from overtime. But on lee, certain employees performing certain duties are exempt from overtime the main ones. I don’t talk about those one of those executives, administrators or administrative xero and professionals, so if you’re ah not for-profit ifyou’re ah, counselor, a psychologist, psychiatrist, a professional you’re not in your pay and you’re paid on a salary you’re not entitled to overtime, but you may be a highly highly paid administrative person who works closely with management. You may be exempt from overtime, but if you are a lower levels let’s, say a clerical person lower simply on the orc chart, not in terms of your worth, but and you’re you don’t have a lot of discretion and control doesn’t matter if you paid on a salary you’re entitled to overtime. If you work more than forty hours in a work week and that’s not waivable, you can’t agree not to take it. You can’t enter into a contract dipped in blood notarized doesn’t matter. You have to get paid for all hours worked at time and a half and not less than time and a half. Pay attention to the labor law. Thomas l partner in the law firm of cullen c u l l e n and die kayman d y k m a n in garden city, new york and also in new york city. Thomas l thank you very, very much to in my pleasure mine as well. We are sponsored by generosity siri’s you’ve heard me talk about them because they host multi charity five k runs and walks, and the reason for talking to them would be if you are planning such an event as part of your fund-raising mix and another reason would be that i would be grateful because they are sponsoring the show, so if you think about that in your fund-raising, please consider generosity siri’s you can pick up the phone and talk to the ceo dave lynn. They’re at seven one eight five o six, nine triple seven you know they’re on the web as well, of course, generosity, siri’s dot com but i like the phone. They have events coming up in new jersey, miami, atlanta, new york city, philadelphia and toronto. Please check them out generosity, siri’s net neutrality, something i am not at all neutral on amy sample ward and i talked about this last week, and it bothers me that we could end up with two internet one for those internet service providers and people and non-profits who can afford to pay for fast lane service and one with slower service for everybody else. Amy and i talked about the implications of this for the way you do your work day today because so much is in the cloud and also for the people who you’re serving, who may very well need the internet to access your services. You can tell the f c c, the federal communications commission what you think about it at deer fcc dot or ge. Earlier this week, the fcc site crashed. I think that was monday because there were so many comments, but it was back-up very quickly and my video on the subject is at tony martignetti dot com that is tony’s take two for friday, sixth of june twenty third show of this year before we bring in jean i want to do a little more live listener love fellmeth, mass, san francisco, california that maybe gene beijing china gun po korea and kyoto, japan. In that order, the how i couldn’t on your haserot and konnichi wa. Now to continue this conversation about how far you can go in advocacy and lobbying we brought in jean takagi you know him he’s, our regular contributor on legal matters. He’s managing attorney of neo the non-profit and exempt organizations law group in san francisco. He and it’s the popular non-profit law blogged dot com which i go too often and he is at gi tak e ta ke on twitter jing takagi, welcome back. Thanks so much, honey, how are you? I’m doing great. Thank you, it’s. Good to talk to you. I always enjoy it on. We want to follow. Up on a conversation that amy sample warden i had last week on about the subject of net neutrality and just how far non-profits can go in in advocacy and lobbying first, let’s distinguish between advocacy and lobbying. Sure, and i think tony there’s, a big difference between advocacy and lobbying and advocacy really embodies lobbying and so much more than lobbying. So i think i’ll start by talking about lobbying in general, which is attempting to influence legislation and legislation is generally in action by some legislative body to make law. So when you’ve got legislation, that’s and we wantto influence that by contacting our legislators that’s lobbying. But if we’re advocating on public policy whether it be on net neutrality in general or we’re talking about, you know, the global warming or fair wages we’re talking about general issues and not specific law, their specific bills in front of a legislative body and all of that stuff non-profit or charitable non-profits khun do without limitation if it’s an advancement of their mission. So i really want to encourage non-profits tio let them know that they can engaged in a tremendous amount of that cassie without looking at the lobbying restrictions and also remind them that actually for most public cherries, the bath majority public charities, they could do a heck of a lot of lobbying as well. Okay, we’re gonna go into sales. No insects, no substantial lobbying. But you could do a lot. Yeah. We’re going to go into details. I know you got some. You have some tests, attorneys. You guys love these tests. It was a test which helps i think they do help. It’s just funny. That is always test. Now. Tony martignetti non-profit radio were a little loose with the word non-profit and i think for our purposes, jean, we need to break down charity versus a non versus the more general non-profit i four years ago, i did not want to call the show tony martignetti charity radio, but i think that for our purposes, i think we need to make that distinction. Can you help me? Yeah. And they’re all sorts of non-profits and charitable non-profits are certainly the most prevalent form of non-profit organizations, but there’s, you know, well, over half a million other types of non-profit organizations out there as well. Um, i’ll use some classification hopefully don’t go. Into jargon jailed for them but five oh one c three riposte to the charitable type organizations and their tax exempt under five a one c three of the internal revenue code. But we’ve got bible onesie for that social welfare organizations that can lobby all they want. And they sort of purse to public interest goals as well. And they include things or organizations like the sierra club, aarp, the n r a greenpeace, and in organizations of of that nature, their advocacy organizations. And they can lobby again all they want. And they can even do some endorsements of political candidates. We’ve got five one five unions, five a onesie, six trade associations, professional associations and chambers of commerce and five on twenty seven social clubs. And they’re probably another thirty two, thirty five categories of tax exempt organizations out there. Somewhere in there is the non-profit cemetery. I think that’s the last one listed. Yeah, under five. Five o one see something. Whatever the last one is, i think it’s i think it’s non-profit cemeteries, they just want to wrap up with the death. I guess so. All right, so all these other non-profits are not charitable. Write the only charitable is five o one c three yet the only one that we refer to as a charitable organization are the five oh one see threes, and those are the ones that are eligible to receive deductible contributions from donors, right? And a lot of the other types of organizations, like the ones you mentioned, sierra club and our etcetera, they will often have five o one c three charitable. I’m going to call them the non legal term arms or so that they can raise money to support charitable that can raise charitable dollars to support there. Bob being an advocacy is that do i have that right? Yeah, kind of. So they have hoexter organizations rather than arms. If i’ll say so, they’re completely separate corporations, but they’re using some sort of relationship between their boards of directors and so there will be affiliate or tandem. Five twenty three charitable organizations with cassie for social welfare advocacy type organizations or c six trade associations happens all the time. Okay. Wanna make that clear? That that that that’s how there, that’s how the money is being raised for the the non five oh one. See three’s. Okay, so there’s a lot that we can do around advocacy because around net neutrality or do you mention global warming? The the economy as long as we’re not? Is it referring to specific legislation in our advocacy? Well, much of our advocacy, if it’s not referring to any specific legislation directly or indirectly, may just be done by charity charities and charitable organizations without limitation and that’s kind of a nice thing, but i mentioned that legislation it is actions by legislative bodies and not administrative agencies, if all you know, add that and the fcc, which is the federal communications commission, is an administrative agency in part of the executive branch of the federal government it’s not part of the legislative branch. So when they make rules and we wantto advocate to change those rules, have them proposed new rules that’s not loving at all that’s advocacy and then that’s why i said that because he could be much, much more broader than lobbying and in the case of net neutrality, which i’m with you on this, i’m not neutral on this issue, and i don’t think most non-profits want to be neutral at all on this issue. As well. I think that advocating on behalf of these proposed rules is really important, right and wide open because it’s not legislation, right? The extent that you think it’s going further your mission, or protect your ability to do your mission to not be relegated to the slow lane or the fcc is putting it there’s a fast lane and a faster lane. And john oliver, in his very highly publicized video that helped crash the fcc servers that you mentioned, um, in his video, just called b s on that i agree with him as well. So if you’re going to be relegated to the slow lane and that’s going to affect your mission, you have every reason to get up and make this comment, which could do very, very easily on that site that you mentioned. Now i’m going to put you in georgian jail for b s jean what exactly did you work? You’re going to say but what exactly is b s jean? I also know that i understand. Go ahead. Okay. That’s. Just plain bullshit. Thank you, jean. I love having fingers. That’s. All right. That’s what i love. Thank you. You’re out of jargon jail instantly. Let’s. Go to the bar. You’re blushing. So safe. Listen, i don’t know where did your mom, your mom, live in orlando, florida? Or arco, idaho? Because if not, then she’s not list. Oh, found with mass. If not, then she’s not listening right now. Okay, then i may be well, there may be others, too. All right. Okay. Let’s, move to the lobbying side where we have these. Have a test for how much lobbying we can do as a five. Oh, one c three charitable organization. Yeah. So there to test on on how to measure lobbying for five, twenty three public charities. And the first test is kind of the default test that you don’t do anything. It’s called the insubstantial part test and it’s a tough one. Because if you look at all the facts and circumstances and the charity’s not allowed to engage in substantial lodging and that’s pretty great. You know what lawyers say is there’s this like old case from the fifties that said about five percent of your budget spent on lobbying was not substantial. So that’s kind of our own only guidance there if you spend five percent of your budget or resource is on lobbying and you fall under this default test. Then you know, you may be breaching the substantial limit if you go about five percent, so for the vast majority of charitable organizations and i’m going to say for any charity that qualified there’s, some that don’t qualify like churches. But granny church charity that qualifies with a budget under let’s say thirty million a year, tony, that embody most of the charities that ninety nine point five percent? I’m sure. Yes, yeah. So any any charity enter a thirty million dollars annual budget should make the fei bo won h election and it’s a half page form from the irs? It’s super easy, its name, address, check a box, and what that does is it makes it so much easier. It’s not all the facts and circumstances it just says you can’t engage in substantial lobbying as measured on ly by your expenditures by the dollars spent so you can rally all your volunteers and spend one hundred percent of your volunteer time lobbying on various issues and again lobbying meaning influencing legislation, actions by legislative bodies you consent all your volunteers to do that without limitation, and it doesn’t even count as any sort of lobbying for your lobbying limit purposes. Of course, their only volunteers if you’re not paying people to do that work a cz well, side by side with these purported volunteers, right? We know that. Yeah, i know that tom was self you were listening to. Tom will sell. I was listeningto the last half of it. Okay, well, i don’t know if you heard them, but to make sure that you’ve got the right volunteers actually fallen. Real volunteers. Okay, not uncompensated. What should have been classified as employees. Exactly. Right. All right. So the five oh, i know i’m usually you qualify things beautifully, but i didn’t mean to forced you into that confession. All right, so this five oh, one h election. I assume. That’s an internal revenue code. Section five. Oh, one h. And what is the simple irs form that you think? Almost all non-profits elle charity should fill out. It’s formed fifty seven. Sixty eight and you could do it any time during the year, even december thirty first, and it would count for that year. So it’s, a really simple form. It doesn’t create additional scrutiny for the organisation it makes measuring lobbying much more easy and the big point i wanted to make it that you’re lobbying limitation under five oh, one age expenditures is twenty percent of your first five hundred thousand dollars in in what will call exempt purpose expenditures our mission related expenditures twenty percent not the five percent that we’ve sort of guided people by under the other tests twenty percent of the first five hundred thousand fifteen of the next five hundred ten of the next up to one million dollars. Kapin and that that’s a pretty generous limit, and this doesn’t count any volunteer time lobbying, and it doesn’t count any of your advocacy efforts around let’s say, net neutrality and commenting to the fcc, which is not lobbying it all right, none of that none of that applies to this what we’re talking about now. That’s, that’s not lobbying. Okay, twenty twenty percent of your first half a million, and then how does it decline after that? The percentage fifteen percent of the next half million, ten percent of the next five percent of the next, and it capped at a million dollars. Told lobbying that’s, a lot of lobbying you could do for a million dollars and the list. You have that where they don’t need to be so scared. Yeah, okay, um, let’s, go out for a break. And when we come back, we’re going to keep talking about about this a little bit. And then we’re going to talk about this the bright lines project, which is intended to help these these gray areas, will stay with me and gene. You’re listening to the talking alternative network. Have you ever considered consulting a road map when you feel you need help getting to your destination when the normal path seems blocked? A little help can come in handy when choosing an alternate route. Your natal chart is a map of your potentials. It addresses relationships, finance, business, health and, above all, creativity. Current planetary cycles can either support or challenge your objectives. I’m montgomery taylor. If you would like to explore the help of a private astrological reading, please contact me at monte at monty taylor dot. Com let’s monte m o nt y at monty taylor dot com. Are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com way. Look forward to serving you. Talking alternative radio twenty four hours a day. If you have big ideas but an average budget, tune into tony martignetti non-profit radio for ideas you can use. I do. I’m dr. Robert penna, author of the non-profit outcomes toolbox. Welcome back. I get a sense of more live listener love. I love it. Decatur, georgia and delhi, india someone’s here suggested i say hello, deli i won’t say who that was. I thinkit’s that’s fun. Okay, it would be indiscreet of me to say who it was. Tom myself, delhi, india live listener love going out to you. I gotta send podcast pleasantries to all our listeners in germany. We got a lot of listeners from the podcast site podcast dot d to all our german podcast listeners couldn’t talk. Okay, jean takagi in san francisco, you have some other things that are like we can talk directly to legislators and and staffs about things and it’s and it’s not considered lobbying. Yeah, if we’re not talking about a specific piece of legislation and we’re talking about issues in general that affect the public that’s that’s not lobbying either. So we wanted to talk to members of congress and said, and open internet is really just an important thing for organizations, and we could get drowned out if we have this to lane highway, maybe we should treat the internet kind of like a public utility. And that might be going a little bit further towards some sort of legislation, but, you know, just in general, if we wanted to talk that way that i would not be lobbing either, so we can put that in the letter we can do an email way can have that conversation anyway. It’s not lobbying, and that includes legislative staff right now, we can talk with legislative staff as well. Sometimes we can’t directly, you know, contact our congress person, but we might be able to get a connection with one of their staff members on dh let them know what their constituents are thinking about this really, really important issues. How about research if we wanted to a research project on an issue? Yeah, you know, if we do it in a nonpartisan matter-ness and we make it available not just to one party or the other one candidate or the other and it’s a full and fair, what we’ll call exposition of the underlying facts has got to be objective doesn’t encourage the recipient to take action, but just informed them of what the issues are and how important it is. Teo address those issues in a reasonable manner that’s going to be fine as well. There is in a project the bright lines project teo to help clear the clear. The muddy waters around lobbying. And they’ve been around for about four years. What can you acquaint us with them more? Sure. They’ve actually been around since two thousand eight and six years. Oh, and just isn’t aside. I’ve been to the hello deli in new york with rupert g had. Sorry. I digress. There. Hello, deli. Where is that? Where? There’s a hello. Deli in new york. Yeah. It’s just around the corner. Rupert g the owners on late night with david letterman regularly and his his delhi is just around the corner from from the letterman theater with the sullivan theater where they do letterman. Okay. All right. That’s, a broadway and fifty six, i think, roughly is the theater is okay. There you go. Thank you. Head. So that’s it. That’s it that’s it. We’re going to wrap it up right there. We’re done valuable public now, more important than the great value for the listening audience. Gino, you know, people are gonna want to have you back next month. Now go ahead. Acquaint us with the bright lines project since two thousand. But i mean the bright line project what it’s done is really to address not just lobbying, but more towards the other types of political activities that organizations charities may engage in, including voter registrations, voter engagement, you know, comparing information amongst candidates in a non partisan manner to educate the voters on those things. Get out the vote drive on things of that nature as well. And the problem right now are that the rules are all kind of facts and circumstances. Rules where the irs looks at everything, but doesn’t provide very much guidance to charities about well, is this okay? Is that okay? Or where do i cross the line? An enforcement of those rules amongst irs agents is also really uneven on dh that’s, you know, partly what may have led to the big. I’ll call it a scandal, if you will, about screening for tea party applications that the tax exemptions that we saw last year. And, you know, with all of this confusion amongst not only the public and organizations but the irs self about howto apply these very, very vague rules, but the bright lines project this thing well, let’s, get some real rules that create some clear, objective standards, so we don’t have to rely on facts and circumstances in what every particular agent or what every particular organization thinks the relevant facts and circumstances are. This is a first amendment issue, isn’t it around speech? Well, it partly and partly deals with that, and it partly comes off of the citizens united case back in two thousand ten, although the bright lines project originated earlier because we had this problem earlier, but yeah, part part of it has to do with free speech and but part of it that just has to do with yes, you you know, the legislator can create laws around what it takes to maintain charitable status and tax exemption under five, twenty three, and we understand that there’s no political intervention allowed the political intervention is used in so many other contexts throughout the internal revenue code as applicable to other tax exempt organizations and for various reasons, including imposing taxes and there’s a different definition every time, and it just is immensely confusing lawyers don’t understand it. The irs doesn’t understand it. The courts don’t understand it, we need some clear rules and all this confusion is just going to lead people to stifle their own opinion. Yeah, leads what happens is the small guy on the small organization stifle their opinions because they’ve got to be conservative and protective of being able to advance their missions, the big guys, the big lobbying organizations or the dark money. So where donors can hide themselves by using five a onesie for five, twenty six organisations to shield that they’re supporting a particular candidates can hide themselves in this andi and use the law to their benefit. So we want to make sure that everything is transparent and open out there on dh that’s part of the reason we have the bright lines project as well. I’m not part of that group, but i’m definitely a supporter now. I arrest has made some efforts teo, to improve the rules, right? Yeah, the the irs has has taken a first shot at this on dh. You know, there were sixty nine thousand comments within, like, a couple of weeks after the fcc regulations for a proposed rule making on the net the trial of the issue, they’re over one hundred fifty. Thousand comments on when the iraq proposed new rules about political activities and five a onesie for social welfare organizations. I mentioned those before, like the sierra club, aarp and are a bacon engage in unlimited lobbying, but they do it for a public or social welfare purpose. Andi can engage in some election hearing as long as that’s not their primary activity, and some of them push it all the way up to forty nine percent of their budget being spent on election nearing, you know, getting candidates elected, and so the i r s is trying to improve things for us. They’re trying to yeah, they’re trying to figure out what the rules bar, but again they’re using different rules for five a one c four’s and five a onesie threes, and then it just muddies the water of well, you’re using similar terms, but they have different meanings. How do we interpret all of this? And if we create a big shield just that applies to five one fourth, the dark money will move the bible onesie, sixes or other other types of tax exempt organizations, so it doesn’t really plugged the hole very well and it doesn’t allow for things like non partisan election related activities that five one six weeks have been allowed to do for years and years and years without a problem. So it it muddies the waters greatly and that’s why the irs is actually rewriting the rules in total, and they’ve decided not to have any hearings based on their old rules because with one hundred fifty thousand comments, you can see that there was some distaste of what they first came out with. And i get the good process gene just very quickly. Where will we find the bright lines project? I think it’s a bright lines project dot org’s on bits that at citizen dot org’s is the host of the organization citizen dot org’s. Yeah, that’s public citizen’s website. Okay, we have to leave it there. Jim takagi, our monthly contributor on the law managing attorney of neo. You’ll find hizb blawg at non-profit law block dot com and you’ll find him on twitter at g tech. Thank you very, very much, gene. Thanks. Have a great day. My pleasure. Thank you. Next week i’ll have something from ntcdinosaur non-profit technology conference and maria simple is back to talk about the right to be forgotten and its implications for your prospect research. If you missed any part of today’s show, you’ll find it on tony martignetti dot com. Remember that we are sponsored by generosity, siri’s, generosity, siri’s, dot com, our creative producer, declare meyerhoff sam lever, which is our line producer, shows social media, is by julia campbell of jake campbell. Social marketing. Remote producer of tony martignetti non-profit radio is john federico of new rules of an independent contractor. Our music is by scott stein from brooklyn. Be with me next week for non-profit radio. Big non-profit ideas for the other ninety five percent. Go out and be great. You don’t know anything, including getting victims. You’re listening to the talking alternative network. Get in. Nothing. Cubine are you stuck in your business or career trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. 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Have you ever considered consulting a road map when you feel you need help getting to your destination when the normal path seems blocked? A little help can come in handy when choosing an alternate route. Your natal chart is a map of your potentials. It addresses relationships, finance, business, health and, above all, creativity. Current planetary cycles can either support or challenge your objectives. I’m montgomery taylor. If you would like to explore the help of a private astrological reading, please contact me at monte at monty taylor dot. Com let’s, monte, m o nt y monty taylor. Dot com. Are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you, too? 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