Five IRS-safe tech tips for nonprofits

Five IRS-safe tech tips for nonprofits

Summary: If you're considering starting a nonprofit and want to sail through government approval, here are five tech tips (and a few bonus ideas) that will make the process as painless as possible. This article is certified politics-free.

TOPICS: Google, SMBs

In honor of the "ripped from the headlines" headlines about the emerging IRS scandal targeting conservative nonprofits, I thought it would be helpful to provide some proven IRS-safe tech tips for nonprofits.

Given that most government articles go from zero-to-Obama in four comments or less, I've decided to steer far away from actual political discussion and simply discuss practical suggestions.

Some of you may know that I volunteer my time pro-bono to a 501(c)3 nonprofit known as the U.S. Strategic Perspective Institute. I was heavily involved in its creation and the process of getting IRS approval as a nonprofit.

The process itself is not easy, and not all that cheap. There are a ton of forms, and quite a bit of IRS interaction. All told, it took us almost two years to go from proposal and filing of our initial application to being granted 501(c)3 status.

Before I start with the tech tips, I'll give you one additional tip. Rather than retaining a general-purpose attorney, we retained a company that works specifically with the process of getting IRS approval, the Foundation Group.

They weren't cheap, but they probably cost less than an attorney. More to the point, when the IRS examiners came back to us with some baffling gov-speak questions, the folks at the Foundation Group knew how to interpret those questions and prepare full and complete responses. I can't recommend them enough. They were incredibly helpful.

Okay, so now some quick tips.

Free hosting

Outreach is incredibly important for a nonprofit, and while Web site hosting isn't terribly expensive, it's nice to be able to get it for free. If you've got your IRS determination letter, a number of hosting companies will provide you with either free or discounted hosting. One such host is the one one USSPI uses, DreamHost.

Google for nonprofits

Google has a number of services and even a grant program for nonprofits. Once again, you have to be an established 501(c)3 with your determination letter, but once you are, consider applying to Google for Nonprofits.

Scan everything

These days, there's no real excuse to have a pile of paperwork. Nonprofits need to run lean and mean. Rather than filling an office with file cabinets, buy yourself a scanner like the Fujitsu ScanSnap (I own two of them).

When I bought the device, it came with both a free copy of Adobe Acrobat and a year of Evernote Premium. Evernote is an ideal tool for operating a nonprofit, since you can share out notes or notebooks to just board members, or to the entire organization -- making everything immediately available online quickly and easily.

Hold meetings online

Board and stakeholder meetings are a critical part of nonprofit operations. If you run a national nonprofit, like I do, you'll find that you have participants scattered all over the country.

When you want to keep costs down, the last thing you want to do is incur a lot of travel expense (and the time is a big drain, as well). Instead, consider putting everyone into a Google+ Circle and using Hangouts as a quick way to bring everyone up to speed, face-to-face.

File your IRS reports online

Probably the most important activity for any nonprofit (at least in the eyes of the IRS), is filing your paperwork. The IRS now offers e-filing for charities and nonprofits. Just point your browser to the e-file home page and tell the IRS all your secrets.


I find my work for public charities and nonprofit research organizations to be incredibly fulfilling. If you're not helping out a nonprofit, consider volunteering. It's not only good for the country and your community, it's actually good for you as well.

Topics: Google, SMBs


David Gewirtz, Distinguished Lecturer at CBS Interactive, is an author, U.S. policy advisor, and computer scientist. He is featured in the History Channel special The President's Book of Secrets and is a member of the National Press Club.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Oh and 1 more

    Don't include tea party or conservative in your nonprofit groups name!
    • Or "progressive", for that matter

      After all, things can easily work both ways, and given historical patterns, the next President of the U.S. will probably be a Republican.
      John L. Ries
      • Seriously...

        ...I suspect it's a lot easier to protect a non-profit from political flack if it really is non-partisan, instead being only nominally so.
        John L. Ries
  • Another tip

    ALso ensure your non-profit donates generously to liberal groups and Democrat politicians...
    • Know what you are talking about

      First, progressive groups WERE targeted. You might know this if you'd bothered to check your facts. Second, it has nothing to do with liberal versus conservative. Please tell me when,m after Obama was elected, the staff at the IRS at the time was all forced to resign, and new political appointees hired. It has to do with expediency, and the fact that if you have a political cause emblazoned on your very name, it is reasonable to assume you might be a political group, and therefore might NOT be a valid 501(c)(4).
      So, how about you name a single tea party group that applied for 501(c)(4) status, that actually deserved it, and was denied.
      The fact is, the vast majority of these tea party groups had NO business getting 501(c)(4) status, and instead should have applied for 527 status, and only applied for 501(c)(4) status to hide their donor lists. If they did this knowingly, which is pretty clear they did in many cases, this is FRAUD.
  • He was right

    The comments DID go from zero to the O-name ... almost. At least they avoided mentioning him specifically.

    The third post had some practical advice: make sure that you DO non-political things mostly (the original law said EXCLUSIVELY, but the IRS interpreted that in 1959 as "mostly" and that is the reality). The stickler is that if your non-profit is threatened by some political proposal (I will use a hypothetical example: you are the Red Cross and your blood bank is threatened by a sudden surge of Jehovah's Witnesses pressure groups who want to ban transfusions), naturally you will alert your members to SAVE your mission by trying to stop that political proposal. But it is easy to tell when your "non-profit" exists ONLY to funnel political contributions without naming the donors. For example, has Karl Rove organized any hurricane or tornado relief through Crossroads GPS? EVER?

    Maybe we need to "clean house" by either banning or legalizing ALL tax exempt political activity. And to make the floors of that house even cleaner, how about an AUTOMATIC entitlement to enough media time to make the contributions just to buy media time less valuable? Perhaps a neutrally moderated town hall debate every week during campaign season could count as public service programming for FCC broadcast licensees?

    But as for REAL non-profits, these sound like good ideas in the nuts-and-bolts department.
  • Safe IRS tips for 105c3 non-profits

    Hmmmmm, nothing in the article about what to avoid after you have the 105c3 status as most churches in the USA are currently registered under. Why didn't you explain to the readers about how 501c3 organizations have agreed to not speak about politically relevant topics or face punishment. Or in other words you have to be politically correct to keep that status. No mention of the "Clergy Response Teams" under FEMA control either (Google it if you think I'm blowing smoke). But since you've organized your own personal 501c3 you already know and completely understand these facts and I'm quite sure abide by your masters instructions. No mention of the federal agents paid to sit in on Sunday masses and report back to their masters if the Pastor got out of line that Sunday afternoon and mentioned a forbidden topic at the pulpit. 501c3=government control of churches universally from sea to shining sea. No mention of this FACT at all. Even though the IRS has just demonstrated that is exactly what they are doing on a daily basis. No mention that over 1500 churches this year alone, up from only 500 last year, have told the IRS they won't play any longer, dang 1st amendment thing is always getting in the way isn't it. No wonder the IRS applied the heat and got caught asking questions like what do your parishioners pray about, like that is anyone's business. The C-SPAN coverage was incredible. Too bad it never makes the main stream snooze or into blogs like these. I'll be quite surprised if this post actually makes it onto the blog. We'll see.
    • Um, so?

      Why are churches considered non-profit in the first place? It is only government largess that prevents them from being taxed. They are welcome to do all the political speech they wish, no one is preventing them. But they then have a choice: either pay taxes, as is your legal obligation, or admit you are a political organization, and file as a 527, and shine light on who gives you money in order to make these political statements.
      Please explain where, exactly, you feel the first Amendment is being infringed.