NYU Midterm Exam Questions with
Complete Solutions6
How to be tax exempt - ANSWERS-1. Be organized and operated for exempt purposes
2. None of its earnings may be inured to a private shareholder or individual
3. May not attempt to influence legislation
4. May not partake in political activity
Benefits of being a 501c3 - ANSWERS-Exempt from Federal Income Tax
Tax-deductible contributions
How to lose your 501c3 - ANSWERS-Private benefit
Lobbying
Political activity
Unrelated Business Income (UBI)
Sarbanes-Oxley Act - ANSWERS-act made to protect investors from fraudulent accounting
activities by corporations
Required of Nonprofits - ANSWERS-"Whistleblower" Protection
Document Destruction Policy
"Whistleblower" Protection - ANSWERS-organizations are prohibited from retaliating against
those who report suspected fraudulent activities
, Document Destruction Policy - ANSWERS-organizations are prohibited from destroying or
altering documents to prevent their use in official proceeding
Board of Directors - ANSWERS-body of elected or appointed members who oversee activities of
the organization
Ex Officio - ANSWERS-member of board of director not by election, but for holding an office for
so long
Emeritus - ANSWERS-former member of board who completed service, but continues to be
associated with the organization
Board of Committees - ANSWERS-members of a board mandated to carry out specific functions,
programs, or projects assigned by the board (differs in scope of authority and ability to act
independently)
general operating support (unrestricted) - ANSWERS-grants made to support a nonprofit's
mission rather than a specific project or program
temporarily restricted - ANSWERS-donation that is limited to a specific project or program for a
specific period of time
permanently restricted - ANSWERS-donation that has a limitation on how it can be used
capital - ANSWERS-wealth in the form of money or other aspects for a particular purpose
endowment fund - ANSWERS-fund that is to be invested and only the income is available for use
Complete Solutions6
How to be tax exempt - ANSWERS-1. Be organized and operated for exempt purposes
2. None of its earnings may be inured to a private shareholder or individual
3. May not attempt to influence legislation
4. May not partake in political activity
Benefits of being a 501c3 - ANSWERS-Exempt from Federal Income Tax
Tax-deductible contributions
How to lose your 501c3 - ANSWERS-Private benefit
Lobbying
Political activity
Unrelated Business Income (UBI)
Sarbanes-Oxley Act - ANSWERS-act made to protect investors from fraudulent accounting
activities by corporations
Required of Nonprofits - ANSWERS-"Whistleblower" Protection
Document Destruction Policy
"Whistleblower" Protection - ANSWERS-organizations are prohibited from retaliating against
those who report suspected fraudulent activities
, Document Destruction Policy - ANSWERS-organizations are prohibited from destroying or
altering documents to prevent their use in official proceeding
Board of Directors - ANSWERS-body of elected or appointed members who oversee activities of
the organization
Ex Officio - ANSWERS-member of board of director not by election, but for holding an office for
so long
Emeritus - ANSWERS-former member of board who completed service, but continues to be
associated with the organization
Board of Committees - ANSWERS-members of a board mandated to carry out specific functions,
programs, or projects assigned by the board (differs in scope of authority and ability to act
independently)
general operating support (unrestricted) - ANSWERS-grants made to support a nonprofit's
mission rather than a specific project or program
temporarily restricted - ANSWERS-donation that is limited to a specific project or program for a
specific period of time
permanently restricted - ANSWERS-donation that has a limitation on how it can be used
capital - ANSWERS-wealth in the form of money or other aspects for a particular purpose
endowment fund - ANSWERS-fund that is to be invested and only the income is available for use
