So You’re a Non-Profit Really? Are you Sure?

Right before and after the holidays, there are many solicitations for “tax deductible” donations to many organizations.  Some you recognize, some you don’t.  If you donate to a non-profit that does not have 501(c)(3) status, you could be jeopardizing your right to take that deduction.

A 501(c)(3) public benefit organization or corporation is an organization that has gone through the scrutiny of the IRS to determine if its purpose serves the public good.  A non-profit (501(c)(3)) that has been in existence for several years may not have filed the “Form 1023” that is now required by the IRS to obtain 501(c)(3) status. 

However, if your organization, an existing non-profit, has not filed the 990 tax return with the IRS for the past 3 years, you will lose your status, and then have to file the Form 1023 to be reactivated….And there is no guarantee that this time around, you will be granted non-profit status.

Once you receive Federal “tax exempt” status (501(c)(3)), you must then apply to the State for equivalent status.  You can create a completely new application with the state on the Form 3500 for California, or you can wait for your status to come through with the Federal Government, and then make an abbreviated application with the state (details on how to do that are not covered by this article).

After you receive the State’s approval, then you must submit an application to the California State Attorney General’s office to be entered into the Charitable Registry.  This brings us full circle. If you are a potential contributor to a non-profit, you can visit www.oag.ca.gov/charities and look at the Tools on the right side of the page for a Registry Search to see if your charity is listed.  There is also an explanation of the site on the left toward the bottom.

If as an officer of a non-profit, you assume that you are in good standing, guess again.  The majority of non-profits started out legitimately, but failed to file necessary paperwork to stay in good standing.  As the founder of a non-profit corporation, I have direct experience that will help you determine if your non-profit is in good standing, and what to do if it is not.

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

This information on this site is designed to provide a general overview with regard to the subject matter covered and may not be state specific. The authors, publisher and host are not providing legal, accounting, tax or other specific advice to your situation.

Copyright © 2012 Alvis Frantz and Associates.

Employers - Incentives That Work

During these recessionary times, I often counsel frustrated business owners trying to find ways to give their employees incentives other than money but that are also effective in promoting the behavior and results that the business is looking for.


For instance, the owner of a yoga studio wanted her employees to sell more yoga apparel but she was already giving employees a 20% discount without requiring them to meet any sales goals to receive that discount. Our solution: revamp the program to give the employee discount only after a certain level of clothes sales had been met. It’s a win-win with employees receiving the discount and the business receiving increased sales.

Keep in mind that different incentives work for different employees. What’s important to one employee is not necessarily important to another and, thus, the solution oftentimes is to offer more than one type of incentive program. The goal, however, is to find a win-win solution that gives the employees something they want and at the same time the business gets what it wants.

Some other examples of non-monetary incentives include:

1. Recognize and thank good performance; don’t wait for a performance review to acknowledge good performance. Many employees truly appreciate the recognition and the business gets a continuation of the good performance.

2. Give employees extra time off with pay (assuming you or other staff can cover) but make sure you tell the employee(s) in advance; nothing ruins extra time off faster than simply springing it on employees and they have not had a chance to plan or make necessary arrangements with family and the like. Even a few days advance notice is usually adequate.

3. Seek employees’ opinions and ideas. According to many experts, a large proportion of employees leave their jobs not because of low wages, but because they feel overlooked and neglected; that their voices are not being heard. Take advantage of your employees’ experience and ask for input.

Just because employees are staying in their jobs doesn’t mean businesses are getting full productivity from them. Most businesses are continuing to function on bare minimum staffing but that doesn’t mean business owners can’t be creative in providing incentives to get the most out of their staff. And in doing so, employees can be given the opportunity to get what’s important to them.

For more assistance and ideas tailored to your particular business, contact Rhonda Shelton Kraeber, Esq. at Alvis Frantz & Associates, (925) 516-1617. I have been assisting employers with these types of issues as well as all aspects of the employer-employee relationship for 20 years.

It's Cheaper to Prevent it than to Defend it

Many, many employers practice an ostrich approach to employee relations; they stick their heads in the sand and hope for the best. Of course, this leaves another part of their anatomy exposed, but for some this strategy works just fine for years. But then that employee happens—and we all know who that employee is—and the gig is up. Employers MUST be pro-active and implement appropriate policies and procedures BEFORE that employee happens.


Employment litigation is one of the most expensive types of lawsuits. Additionally, the California labor laws are “gotchas.” Employers are either in compliance or they’re not, and there’s no grey area. For example, employers either strictly comply with the overtime pay requirements or that employee will eventually bring a claim before the Labor Commissioner who will look back at three years of payroll records and potentially cause an audit of all employees’ payroll records.

Typically, an employer that is out of compliance with one aspect of their employee relations is out of compliance with many. Recently, a woman employed by an upscale retail establishment reported her employer was violating the laws related to overtime pay, meal and rest breaks, frequency of pay, and itemization of pay, and had then fired her for filing a claim with the Department of Labor. Similarly, employers routinely confide they are operating without employee handbooks, without the required postings, without a solid system for documenting employees’ hours worked, and the like.

While most employers are not purposefully violating labor laws, the effect is the same—you pay. Defending against these claims and ultimately paying for years of transgressions is almost always a very expensive proposition and has been the downfall of many businesses. The solution is to get your ship in order NOW, before that employee comes along. In fact, that employee may already be working for you.

For more assistance tailored to your particular business, contact attorney Rhonda Shelton Kraeber, Esq. at Alvis Frantz & Associates, (925) 516-1617 or Rhonda@alvisfrantzlaw.com. As the only employment law specialist in East Contra Costa County, I have been assisting employers with implementation of appropriate policies and procedures, as well as all aspects of the employer-employee relationship, for 20 years.