Charitable or nonprofit licensees must make "significant
progress" toward their stated purpose. They have made "significant progress"
when they have:
(1) Complied with all
requirements set forth in their bylaws and articles of incorporation;
and
(2) Actively engaged in
providing services to the public or their members during the fiscal year under
review, and the services directly relate to the stated purposes of the
organization; and
(3) Held
elections to select officers at least once in the previous two years;
and
(4) Held a general membership
meeting to conduct the business of the organization at least once in the
previous two years; and
(5) Used a
substantial portion of the licensees' "available resources" for providing
program services during the fiscal year under review. For purposes of this
section, "available resources":
(a) Include
the income generated by or from:
(i) The net
of all activities used to raise funds, including net gambling income;
and
(ii) Grants, gifts, and
contributions from private sources; and
(iii) Public support.
(b) Does not include:
(i) Funds generated in periods other than the
fiscal year under review; or
(ii)
Funds that are raised or contributed from outside the organization for purposes
of purchasing land or capital assets or to endow future operations when those
funds are specifically identified by the board or contributors as restricted
and separately recorded in the organization's records; or
(iii) Net income from the sale of assets;
or
(iv) Fees paid by members or the
public to receive services or to participate in specific activities. (Example:
Fees to attend a swimming lesson or event.) These fees must be classified as a
reduction to both program service and supporting service expenses on a pro rata
basis and as a reduction to resources available for providing services in the
fiscal year. (Example: In the chart below, licensee X has revenue of five
thousand dollars. They must calculate the pro rata reduction by adjusting the
total by the percentages of support services, program services expenses, and
functional expenses.)
(6) This rule will be effective for fiscal
years ending on or after December 31, 2009.
|
Revenue
|
|
Fees paid by public
|
$5,000
|
|
|
Calculation:
|
|
Expenses
|
Unadjusted Amount
|
% of Total
|
Pro Rata Reduction Fees Paid by Public
($5,000)
|
% of Total
|
Adjusted Amount
|
|
Support Service Expense
|
$35,000
|
|
32%
|
|
($1,591)
|
|
32%
|
|
$33,409
|
|
|
Program Service Expense
|
$75,000
|
|
68%
|
|
($3,409)
|
|
68%
|
|
$71,591
|
|
|
Functional Expenses
|
$110,000
|
|
100%
|
|
($5,000)
|
|
100%
|
|
$105,000
|
|
