Alex’s collaborative movement for fair taxes in Oregon

Welcome to Ideal-to-Real Updates, a series where we check in with idealists taking action on their good ideas to see what they’ve been up to and what gems of wisdom they’ve learned along the way.

A little over a year ago we wrote about Alex Linsker, an Oregonian who was undertaking the ginormous task of overhauling the state’s tax system through his initiative, Tax and Conversation.

It’s a big project to lead, but Alex has been taking small steps forward. Since we last spoke, he’s talked with thousands of people—friends, influential people in the state, tax experts, people affected by underfunded state and local services—to learn more and get buy-in for the project.

“Sometimes the work gets tiring but then I talk with someone who is affected by tax and who cares about people, and that inspires me and shows me the way forward,” he says.

Alexnotes

Alex taking notes at a City Club of Portland meeting.
(photo courtesy Rachel Loskill, Program & Communications Director, City Club of Portland)

Most of the people he’s met with have been referrals. Others have been chance encounters with everyday Oregonians.

Once, when Alex was biking home from an event, a guy walking on the sidewalk stopped him while he was at a stoplight. He was a farmer and former Marine from Eastern Oregon, and started telling Alex about his son and grandson, and a motorcycle they all rode over the years. He talked about limits and rules, and Alex saw the connection to Tax and Conversation, which on a fundamental level, is about the same thing.

“He leads an agricultural co-op and he sends out two trucks each day: one sells milk to Idaho, and the other gives cream, cheese, and gas to Oregonians who can’t afford it. He wanted the tax system to change so the people around him can buy those things,” Alex says. “Even though he doesn’t speak the same words I do, we realized we share a lot of the same values. We talked about tax, food, medical care, government, courts, schools. I listened, he listened, we learned and agreed.”

The idea is that this farmer’s voice and thousands of others are informing the rewrite of the current policy, which in a nutshell is this: people and companies who have the most money pay less tax.

Alex wants to flip this system by refunding all payroll tax to residents, ending Oregon income and property taxes, and progressively taxing net assets. This will simplify tax law so that people can better understand where their money’s going, and create more jobs, especially for teachers.

Of course, it takes time to build momentum. As the co-founder of The Collective Agency, a democratically-run shared workplace, Alex knows one thing for sure: only move forward if the majority agrees to move forward.

“There was one week last year where I had an idea, and asked people about it. They all said it was terrible. If I think something is good, and everyone else says it’s terrible, then it’s not worth pursuing,” he says. “So there are a lot of checks and balances.”

The project has had its ups and downs and there’s a lot of work ahead—like raising $15 million (!) for a statewide campaign—but for Alex, the sometimes taxing nature of it is anything but an obstacle.

“This project is a mix of statistics and empathy. It’s similar to how I started Collective Agency, but a lot harder,” Alex says. “I’m constantly choosing to work on this. It’s challenging, but I’m meeting amazing people and it’s fun.”

Want to help? From referring to writing to donating, there are many ways you can support Tax and Conversation.

If you’re looking to start a similar initiative where you live but don’t know how to begin, feel free to get in touch with Alex for tips and advice: Council@TaxAndConversation.com.

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‘Tis the season: Tips for end-of-year donations

Happy holidays! While our writers take a couple of days to savor the season, we thought you might enjoy this classic post (which originally appeared here).

It’s December, which means you’ve probably started getting requests for donations from worthy causes. Here in the U.S., the income tax rules and the holiday spirit both nudge in the same direction: give what you can, before January 1.

Here are three tips for making gifts that matter. (And matter they do, no matter the size!)

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From Flickr user Alexandra Campo

Tip #1: Understand the tax rules.

If you choose to itemize deductions on your income tax return and you want to include your charitable contributions in the mix, then it’s important to follow the guidelines that the law, and the IRS, have established:

  • the organization must be eligible (usually it will say so in the materials);
  • you’ll need a receipt or some other documentation of the amount;
  • and the gift must be made before the 1st of January to go on this year’s tax return.

There are other, more complicated, rules about larger gifts and in-kind donations. And if you don’t itemize deductions, you still get some credit in the standard deduction. These are calculated using the giving habits of all non-itemizing households. Check the IRS site if there’s anything unusual about what you’re planning to do.

Tip #2: Choose wisely.

Maybe you’re getting a lot of requests, more than you can afford to give. How do you get through the thicket of year-end appeals that tug at your generosity? If you don’t have a personal philanthropy plan, you can make a simple one:

  • Decide on an amount you’re willing, and able, to give. The average household donates about 2 percent of disposable income each year.
  • Consider the organizations you already know, and know you want to support, so you can decide how much to give to each of them.  Then you’ll know how much you might have left over to respond to new requests.
  • If you’re thinking of giving to a new organization, ask yourself “What does this organization do?” and “Do I admire how they do it?” With nearly 2 million nonprofits at work in the U.S., there are lots to choose from.  Looking at websites, reading fundraising appeals, and searching online to see what others have said about the group are good ways to see how strongly the goals, and the methods, appeal to you.

Tip #3: Maximize.

Financial data—the sort of information many charity “watchdogs” focus in on—can only take you so far.  Some causes are hard to administer, others are hard to raise money for.  Spending less than counterpart organizations doesn’t necessarily mean greater efficiency, it may just mean a different approach to the problem.

There are some things donors can do to help put the maximum resources to work, though:

  • Respond quickly to requests, especially to renewal notices.  It costs money to prepare mailings so a quick response, even if it’s a “not this year,” is doing the organization a favor.
  • Consider making fewer, larger gifts. That will focus your support on program work, not processing costs.
  • Positive you won’t ever support Organization X? Ask them to take you off the mailing list so they won’t waste their money on appeals addressed to you.

Finding the money to build stronger, healthier, more lively communities is hard work. With a little preparation and some thought, your year-end gifts can support that work and make an important difference for causes and organizations you care about.

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Support Alex in rewriting Oregon’s tax law

An ongoing experiment: can our community’s collective brainpower help an idea become reality?

Meet Alex

Alex Linsker has done a little bit of everything. He studied playwriting and business as an undergrad at NYU, did marketing for an online T.V. seller, created a software company, interviewed shoppers, and most recently, co-founded and acted as president of the democratic co-working space, Collective Agency in Portland, Oregon.

But one common theme threads his pursuits: the less he knows, the more he wants to do it. So when his time as Community Organizer of the Collective Agency was up, he turned to an issue he knew little about yet would affect any business choice he’d make: taxes.

“As a playwright, I really like figuring out what the false story is and finding what the true story is,” he says. “There’s a lot of mythology about how jobs are created. The truth is that a higher tax rate on people who are the richest grows jobs.”

The intention

Alex wants to introduce a progressive income tax in Oregon through a lobbying group called Tax and Conversation.

He envisions a diverse group that writes an Oregon constitutional amendment, acquires 100,000 signatures to get it on the ballot, and petitions people to vote. He also sees the group building community and promoting education about tax, government, and civics through workshops, meetups, and more. Similar to Collective Agency, the structure will be democratic with membership fees that go to representatives.

The hope of Tax and Conversation is two-fold: On a practical level, getting rid of tax breaks will mean more money for quality K-12 education, healthcare, and other basic services in Oregon. “There’s this scarcity mentality that’s been created and talked about in the news. But there’s more than enough to go around if we choose,” he says.

On a deeper level, Alex believes that a fair tax will help reduce income disparity and therefore generate more trust and empathy in society, a viewpoint he shares with the social researcher Richard Wilkinson.

Obstacles

Alex has been reading, networking, talking, and working with various people and groups such as Tax Fairness Oregon as much as he can. So far he’s created a website that includes a first draft of the amendment.

Here are some current challenges he’s facing:

  1. Alex finds that there is a general lack of awareness about how the tax system works and subsequently, myths about what government services our tax dollars go to.
  2. Communicating the value of the group can be tricky. Different people will read different things into the description.
  3. Some of the feedback he’s gotten from others is that it’s too big of a project given the scope, and they question whether or not will it make a difference.

How you can help

One of many public parks in Oregon Alex hopes more money can go to. (Photo from Ian Sane via Flickr’s Creative Commons.)

  • Do you know of any organizations and/or community organizers he could partner with to help him reach people of all ages, races, incomes, etc.?
  • How would you make the Tax and Conversation website even more relevant? What else do you want to learn about tax in Oregon and/or our government services?
  • What are the benefits of a project like this?
  • What issues and questions does it raise?
  • What would motivate you to become a member? What would you need?
  • What government services do you like, and what government services would you like to see improve?
  • Civics education, which promoted the idea of citizens having an active role in solving problems in their communities, was phased out of schools in the late 60’s. What specific examples of civics education are you aware of? What kind of optional civics education for adults would you value?
  • If you’re Oregon-based, would you like to get involved? (Alex is also open to support from outside the state.)

Leave a comment below or send him a message through Idealist and if the project progresses, we’ll keep you posted!

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Do you have an idea that’s just starting to brew? If you’d like us to consider posting it as part of this series, email celeste [at] idealist [dot] org.

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Who files 990s for your organization?

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Two weeks from today, May 15th, is the deadline by which most U.S.-based nonprofits need to turn in their Form 990 to the IRS. (The deadline is four months and 15 days after the end of an organization’s fiscal year.)

Larger organizations have procedures in place to get this done, and can get an automatic six-month extension just by filing Form 8868. Smaller organizations have an easier form to file: the “e-postcard” Form 990-N. But they often have a harder time remembering to do it. Do you know who’s taking care of this at your favorite organization?

The stakes

As I wrote a few weeks ago, the consequence of not filing for three years in a row is automatic loss of tax-exempt status. Without tax-exempt status, supporters can’t take a tax deduction for their donations. If you miss three 990s, say goodbye to your nonprofit.

And this happens more than you might think: This year over 435,000 organizations appear on the IRS list as no longer exempt. Only 16,000 have asked the IRS to have tax-exempt status restored, which suggests that most of the revocations involve organizations that had already ceased operation. But if you’re connected to a small organization that is hard at work taking care of its mission, you might want to check in to see whether someone is on top of the filing this year.

What to do

For groups with less than $50,000 in annual revenues, here’s how to file online. Larger organizations can file a 990-EZ or full 990 online at the Urban Institute’s website Form990.org. Using the site is free for smaller organizations and inexpensive for larger ones. Filing online results in fewer errors (saving both the filer and the IRS time and trouble) and is much less expensive for the government. Form990.org also offers a way to file Form 8868 when organizations need an extension on their due date. There is no option for an extension for organizations that file Form 990-N.

Here’s hoping we all make it through tax time with ease. Don’t end up “in the soup”!

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Nonprofits have tax deadlines too

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Photo by Alan Cleaver (Flickr/Creative Commons)

If you hurried to the Post Office today to pay your taxes or claim your refund, you’re in good company. Estimates are that 25% of U.S. taxpayers file on the last day each year. But don’t expect long lines at the post office; the IRS is hoping 80% of returns will be filed online, up from 77% last year. The deadline (technically tomorrow this year because of a holiday in Washington, DC) is critical for individual taxpayers – filing late results in penalties and interest for everyone.

Nonprofits get a break on their filing deadline in two ways: First, the due date for organizations with a December 31 fiscal year end is not until May 15th. And second, larger organizations can get an automatic six-months extension to pull their records together just by filing Form 4868.

But the risks for nonprofits of not filing at all are pretty dire. More than 400,000 entries have been removed from the roster of tax-exempt organizations since a 2006 law took effect. The IRS is now required to cull out of the list recognized organizations that don’t file the required reports for three consecutive years. When that happens, donors can’t take deductions from their personal taxes (and may have to file amended personal tax returns – a double whammy) and the organization will probably have to start all over again—filing a new application for recognition and paying the fees—if it wants to continue to operate. Not a good thing.

The “information return” that nonprofits file is called IRS Form 990. It comes in several versions. Time and trouble can be saved by picking the right one.

  • Use Form 990-N (the “e-postcard”) if total revenue from all sources is normally less than $50,000 per year. Note that Form 990-N is only available online (there is no paper verson) and, though there’s no penalty for filing late, there’s also no way to get an extension. So that three-times-you’re-out rule applies to an organization that missed the last couple of years and then files late this year.
  • Use Form 990-EZ if total revenues (the IRS calls it “gross receipts”) are less than $200,000 and total assets are less than $500,000.
  • Bigger organizations use the full Form 990. And private foundations have their own different version called Form 990-PF.

The Urban Institute offers an electronic filing service for groups that need to do a 990-EZ or a full 990 and don’t have anyone else to do it. Information about how that works is online at efile.form990.org. The service is free for organizations with less than $100,000 in revenue and carries a small fee for groups with larger annual budgets.

Larger organizations will usually have staff or outside help with accounting and bookkeeping to keep them on track with these requirements and deadline. Smaller organizations need to be sure they have clear answers to a short, but important, list of questions:

  • When is our filing deadline? It’s always four months and fifteen days after the end of the last fiscal year.
  • What do we need to know to be sure we stay current with all these rules and regs? The IRS website is a good place to start – a list of frequently asked questions is here.
  • Who is going to file our Form 990-N? It takes a few minutes, access to a computer, and knowing the answers to a few simple questions. But somebody has to do it.

If you’re not sure all three questions have been answered for an organization you care about, then tomorrow—after your personal tax return is safely on its way—would be a good time to start getting things sorted out to be sure everything goes smoothly this year.

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U.S. nonprofits: Monday is the deadline for lots of 990s

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The clock is ticking! Photo via Flickr user Elaron (Creative Commons)

Nonprofits with a January to December fiscal year probably need to file a Form 990 with the IRS by Monday, May 16.

Oops…how do I know if it’s time to file?

The deadline for 990s is 5.5 months after the end of the organization’s fiscal year. If December 31 was the end of the year, then May 15 is 5.5 months later.

What happens if I don’t file in time?

If the last time a 990 was filed was in 2008, and none has been filed since, then the new three-years-and-you’re-out rule will apply this year. The IRS will automatically remove the organization from the list of recognized nonprofits when this year’s deadline is missed. If you’re responsible for your organization’s filings and you’re not sure things are up to date, then now would be the time to check! There are also penalties for just filing late even if the earlier year forms were filed, so getting on top of these deadlines has to be a priority.

How do I file?

Here are the thresholds that dictate which version of the Form 990 to file:

  • If gross receipts are normally less than $50,000 per year, then the form to use is the e-postcard called Form 990-N. You answer a few short questions online as explained at http://epostcard.form990.org/. The Urban Institute contracts with the IRS to operate the website for filing the 990-N.
  • If gross receipts are more than $50,000 and less than $200,000 (and total assets are less than $500,000), then the form to use in the 990-EZ.
  • Larger organizations use Form 990.

You can also file the 990-EZ and the full 990 online using tools developed by The Urban Institute. This is free for organizations with gross receipts under $100,000; there’s a fee for larger organizations.

Filing online offers many advantages: less chance of errors; no fat envelopes to mail with return-receipt requests at the post office; quicker and more efficient handling for the IRS.

I need more time!

Unless the process got underway a while ago, it may be too late to get everything done by the end of the day next Monday. If you’re a little behind, there’s just one form needed for an automatic three-month extension! All you have to do is file Form 8868 online at Form990.org.

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'Tis the season: Tips for end-of-year donations

It’s December, which means you’ve probably started getting requests for donations from worthy causes. Here in the U.S., the income tax rules and the holiday spirit both nudge in the same direction: give what you can, before January 1.

Here are three tips for making gifts that matter. (And matter they do, no matter the size!)

featured

From Flickr user Alexandra Campo

Tip #1: Understand the tax rules.

If you choose to itemize deductions on your income tax return and you want to include your charitable contributions in the mix, then it’s important to follow the guidelines that the law, and the IRS, have established:

  • the organization must be eligible (usually it will say so in the materials);
  • you’ll need a receipt or some other documentation of the amount;
  • and the gift must be made before the 1st of January to go on this year’s tax return.

There are other, more complicated, rules about larger gifts and in-kind donations. And if you don’t itemize deductions, you still get some credit in the standard deduction. These are calculated using the giving habits of all non-itemizing households. Check the IRS site if there’s anything unusual about what you’re planning to do.

Tip #2: Choose wisely.

Maybe you’re getting a lot of requests, more than you can afford to give. How do you get through the thicket of year-end appeals that tug at your generosity? If you don’t have a personal philanthropy plan, you can make a simple one:

  • Decide on an amount you’re willing, and able, to give. The average household donates about 2 percent of disposable income each year.
  • Consider the organizations you already know, and know you want to support, so you can decide how much to give to each of them.  Then you’ll know how much you might have left over to respond to new requests.
  • If you’re thinking of giving to a new organization, ask yourself “What does this organization do?” and “Do I admire how they do it?” With nearly 2 million nonprofits at work in the U.S., there are lots to choose from.  Looking at websites, reading fundraising appeals, and searching online to see what others have said about the group are good ways to see how strongly the goals, and the methods, appeal to you.

Tip #3: Maximize.

Financial data—the sort of information many charity “watchdogs” focus in on—can only take you so far.  Some causes are hard to administer, others are hard to raise money for.  Spending less than counterpart organizations doesn’t necessarily mean greater efficiency, it may just mean a different approach to the problem.

There are some things donors can do to help put the maximum resources to work, though:

  • Respond quickly to requests, especially to renewal notices.  It costs money to prepare mailings so a quick response, even if it’s a “not this year,” is doing the organization a favor.
  • Consider making fewer, larger gifts. That will focus your support on program work, not processing costs.
  • Positive you won’t ever support Organization X? Ask them to take you off the mailing list so they won’t waste their money on appeals addressed to you.

Finding the money to build stronger, healthier, more lively communities is hard work. With a little preparation and some thought, your year-end gifts can support that work and make an important difference for causes and organizations you care about.

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