Legal Considerations for Rescues October 15, 2017

Fiscal Sponsorship as Alternative Resources: https://www.sfbar.org/forms/jdc/fiscal-sponsor-memo.pdf http://www.publiccounsel.org/tools/publications/files/fiscal_sponsor.pdf https://www.councilofnonprofits.org/tools-resources/fiscal-sponsorship-nonprofits

10 Steps to Start a California Nonprofit Determine the name of the corporation Draft and file the articles of incorporation Appoint the board of directors and officers Draft the bylaws and conflict of interest policy Take the initial board actions Obtain an employer identification number (EIN) File the initial registration form with the CA Attorney General’s Registry of Charitable Trusts File the Statement of Information with the CA Secretary of State Apply for federal tax exemption with the Internal Revenue Service Apply for California tax exemption with the CA Franchise Tax Board National Council of Nonprofits Graphic Resources: http://www.calnonprofits.org/resources?id=65 https://www.harborcompliance.com/information/how-to-start-a-non-profit-organization-in-california

Determine if Compliant Visit CA State Registry of Charitable Trusts to determine if missed any annual filings: http://rct.doj.ca.gov/Verification/Web/Search.aspx?facility=Y If delinquent or suspended, contact the Attorney General’s Office for help to make current: https://oag.ca.gov/charities/contact

Federal Annual Filings Rescues charities must file an annual informational return with the IRS: Large rescue organizations Gross receipts ≥ $200,000, or total assets ≥ $500,000 Due 4 months and 15 days after FYE Form 990 Medium rescue organizations Gross receipts <$200,000 and total assets <$500,000 990-EZ Small rescue organizations Gross receipts ≤$50,000 990-N (e-postcard) Form 990-T if unrelated business income Perform independent audit if gross annual revenue ≥$2M Review solicitations and donor receipts Other Resources: https://www.irs.gov/charities-non-profits/form-990-series-which-forms-do-exempt-organizations-file-filing-phase-in

California Annual Filings Who: All rescue charities What: Annual Registration Renewal Fee Report with CA Attorney General When: Deadline 4 months and 15 days after FYE Fee: $0 - $300, based on revenue RRF-1 Form Who: Rescue charities w/gross receipts >$50,000; or ≤$50,000 can file 199N What: Exempt Org Annual Information Return with CA Franchise Tax Board When: Deadline is 4 months and 15 days after FYE Fee: $10 for 199; $0 for 199N FTB Form 199 or 199N (“e-Postcard”) What: Annual Statement of Information with CA Secretary of State When: Within 90 days of incorporation; every 2 years thereafter Fee: $20 Form SI-100 FTB Form 109 if unrelated business income Form 3509 if declared political or lobbying activities Forms CT-NRP-1/-2 if planning to have or had a raffle Form 267-A if welfare exemption from property taxes Other Resources: http://www.calnonprofits.org/resources/nonprofit-compliance-checklist

Prioritize Organization

Annual Issues for Board to Consider Hold meeting at least annually (quarterly or more recommended) Record minutes Conduct officer, director, and committee elections Review major financial reports Approve upcoming year budget Approve Form 990 before submission to IRS Evaluate executive performance Compare purpose statement and mission against activities Review bylaws and updated if needed Perform legal compliance and risk management Resources: http://www.nonprofitlawblog.com/issues-nonprofit-board-consider-annually/

Sample Board Calendar Resources: Jan Executive performance Financial review Mar Form 990 (due May 15) Major program(s) May Director and officer elections (@ annual meeting) Legal compliance Jul Mission Board and committee composition Sep Risk management Fundraising and communications Nov Programmatic plans Budget for next year *Calendar assumes that the directors elect their successors and the organization follows a calendar accounting year. Resources: http://www.nonprofitlawblog.com/nonprofit-board-calendar-agenda/

Prioritize Recordkeeping

Reduce Liability Exposure 3 C’s for reducing risk: Conduct (policies/protocols) Contracts CYA (insurance) Use written agreements for adoptions, volunteers, and fostering Example foster terms: Rescue retain animal ownership Expense allocation for routine care and veterinary care Indemnification and hold harmless to protect rescue agency Other: nutrition and exercise needs, inspection of foster home, records disclosure, anticipated length of foster relationship, documentation required on return, etc. Simpler is better when possible Resources: More on insurance: https://bestfriends.org/resources/animal-rescue-insurance Sample (long) foster agreement: http://aldf.org//downloads/samplefosteragreement.pdf

Helpful Resources Nonprofit Attorney: Gene Takagi, NEO Law Group 415.977.0558 gene@neolawgroup.com Animal Law Attorney: Bruce Wagman, Schiff Hardin 415.901.8762 bwagman@schiffhardin.com Legal Zoom https://www.legalzoom.com/knowledge/nonprofit Cal Nonprofits http://calnonprofits.org/resources National Council of Nonprofits: https://www.councilofnonprofits.org/tools-resources

Brandy Kuentzel, Esq. SF SPCA General Counsel bkuentzel@sfspca.org Thank You Brandy Kuentzel, Esq. SF SPCA General Counsel bkuentzel@sfspca.org