Now that the Internal Revenue Service has confirmed it is scrutinizing the finances of 501(c)6s, one of the triggers of an audit is executive compensation. Too high, in an examiner’s mind, could put an association under the IRS microscope. A simple defense, however, can be something that is common in the association community – salary surveys.

George Constantine, an attorney in the Associations and Nonprofits Group of Venable LLP’s DC office, says associations can learn from the experiences of (c)3s and (c)4s, which have been dealing with IRS scrutiny of executive compensation since the 1990s, covered by the intermediate sanctions law. Large nonprofits often hire compensation consultants to create analyses that support the executive compensation levels they pay out. But smaller nonprofits often rely on salary surveys.
When a nonprofit uses a survey to support its salaries, one of the key indicators the IRS looks for is valid comparability data, and the more detailed, the better, Constantine says. Boards that use salary surveys to set compensation should look at the publisher’s methods, and ensure that variables such as size of organization or geographic location are included.

Worst-case scenario of a (c)6 association running afoul of IRS regulations is revocation of exempt status, but Constantine says the IRS “probably would have to see something egregious” for that to happen.

“Even in the (c)6 context, it’s wise to follow the same sort of steps that apply to the (c)3 and (c)4 intermediate sanctions law. Make sure you get valid comparability data when setting compensation,” Constantine advises.

Editor’s note: Association TRENDS currently is compiling our National Compensation Report. Participation is free, and participating associations receive an executive summary.

This information was written by TrendingTopics Columbia Books.

PLEASE NOTE – THIS IS NOT AN OFFICIAL STATE DOCUMENT!

The Corporate Controllers Unit is not affiliated with any state agency and while the letter may appear to be an official document, this is not the case.

In reality a periodic report can be filed online with the Secretary of State’s Office at www.sos.state.co.us, in most cases for the fee of $10.00, and requires little time to complete.

With almost every sponsorship and exhibitor booth sold out at this point, our next step will be going through those lists on companies and cross-liking each other to develop the largest footprint of Facebook connections that we can.  Additionally, we embedded code into  CAI-RMC’s primary website so attendees who sign up can “Like” the page and stay informed with information leading up to this wonderful event!

One of the factors that helps create this buzz is staggering the sale dates of the various opportunities.  Put your sponsorships on sale way in advance – and provide real value to a sponsor for the dollars they are injecting into the event.  Capturing these sponsors early lets you perpetuate them throughout all the subsequent emails, print pieces and marketing of the overall event.  Do the same with exhibitors – place the exhibit space on sale well in advance of the event and promise to “include exhibitors who register by date _X_” to be listed on the attendee brochure.

JMS Association Management Professionals coordinates and plans more than 25 events per year for its various non-profit partners.

JMS provides the ability to deliver this type of impromptu communication via blast email to an entire membership of an organization, providing information and direction about an important issue when needed.

Starting on February 10th, business partner members began submitting their booth selection and payment to reserve space for the April 29th event.  Within 24 hours, 60% of the exhibit space had been reserved.  We expect the exhibitor space to sell out for the second year in a row!

We incentivized early registration by inclusion of companies into the attendee brochure which will be published in early March.

Find out how JMS can manage your conference and trade show by contacting our office.

As a principal owner of JMS Association Management Professionals, I oversee our production operations. JMS provides administrative services for the UpFront Mortgage Brokers Association (UMBA), Community Associations Institute, Rocky Mountain Chapter (CAI-RMC), Colorado Art Education Association (CAEA), National Lawyers Association (NLA), National Society of Professional Engineers – Colorado (NSPE-CO) and the Broadcast Professionals of Colorado (BPC).

Our team of professionals provides a multitude of services for non-profit organizations.  Membership management, administration, headquarters, bookkeeping, event & meeting planning and many more.

Contact our offices to explore how JMS can help your your Non-Profit Thrive!