March mi
Philanthropy Journal of North Carolina • 3
Connections
Coalition
to help
nonprofits
Independent Sector, a
Washin^on-based coalition of non
profits, has launched a new initiative
designed to help nonprofits communi
cate better with the public, policy
makers and the media.
Peter Shiras, a vice president of
InterAction - another nonprofit coali
tion - has been named director of
Independent Sector’s new public poli
cy initiative.
In that role, Shiras will direct a
large-scale grassroots education pro
ject that will encourage nonprofits to
speak out on important policy issues
and promote tax policy supports for
charitable giving.
Prior to working for InterAction,
Shiras was director for public policy
for Catholic Relief Services in
Baltimore and has published articles
in The New York Times, The
Washington Post and The
Christian Science Monitor.
“We are pleased to have someone
with Peter’s extensive public policy
and media experience heading up
this new effort,” said Sara Melendez,
Independent Sector’s president, in a
statement announcing the program.
“He has a strong background in gov
ernment relations, a good knowledge
of IS members and demonstrated
experience in the planning and devel
opment of national issues.”
In his new role, Shiras will devel
op communications strategies and
materials to promote understanding
of the nonprofit sector and develop
support among policymakers, the
media and local charities.
The new public policy initiative is
part of Independent Sector’s plan to
step up advocacy and communica
tions efforts on behalf of nonprofits.
Founded in 1980, Independent
Sector is a national leadership forum
that works to encourage philan
thropy, volunteering and citizen
action. The coalition consists of 800
nonprofits, foundations and corpo
rate giving programs.
For details, contact the coalition
at (202) 223-8100 or visit the organi
zation’s Internet Web site,
http://www.indepsec.org.
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Increasing efficiency
Smart Start leaders OK incentives
Leaders of the state's Smart Start '
program for early childhood
development have approved a
plan designed to encourage
more multi-county partnerships
for children’s services.
By Barbara Solow
As part of an effort to become
more efficient and effective, leaders
of North Carolina’s Smart Start early
childhood development Initiative
want the program to go regional.
A plan adopted in January by the
board of the North Caroiina
Partnership for Children will offer
incentives to existing or new Smart
Start programs that establish multi
county partnerships or other means
to “improve administrative efficien
cy”
CHILDREN
Incentives wUl include giving high
er priority to multi-county applica
tions and added financial resources
and technical help from the state
partnership - which oversees the
Smart Start program.
Gov. Jim Hunt has said he wants
to see Smart Start extended from 55
to all 100 North Carolina counties by
2000. Three of the existing local pro
grams already are multi-county mod
els: The Region A Partnership for
Children (Haywood, Jackson, Macon,
Swain, Graham, Clay and Cherokee);
the Down East Partnership (Nash and
Edgecombe); and the Lenoir/Greene
Partnership.
New regional partnerships would
be developed to address “many areas
of responsibility, including fiscal and
Regionalizing the state's Smart Start program would help it expand, supporters say.
contracts management, transporta
tion planning, health services, pro
gram planning and evaluation, as
well as resource development,” the
board’s plan says.
Guiding principles for organizing
regional Smart Start partnerships
include increasing efficiency of ser
vice delivery to children and families,
and maintaining local autonomy, deci
sion-making and control over those
services.
In addition. Smart Start leaders
say the new plan will allow inclusion
of as-yet unfunded counties that may
not be able to launch Smart Start
organizations on their own.
The state partnership launched a
request-for-proposal process in
February, for applications for multi
county programs. Recommendations
for approval of those applications will
be made in May.
Decisions on the governance,
staffing and structure of multi-county
partnerships will be left to local
boards of directors - as long as they
stay within broad guidelines estab
lished by the General Assembly.
Standards for fiscal integrity and
accountability will be set and moni
tored by the state partnership.
The regionalization plan was
developed hy a special committee
appointed by the state partnership
board. The committee, chaired by
state Rep. Carolyn Russell, R-Wayne,
consisted of 10 state partnership
hoard members, four local partner
ship directors and David Walker,
executive director of the state Smart
Start organization.
For information on Smart Start,
call the state partnership at (919)
821-7999 or visit the program’s
Internet Weh site:
http://www.smartstart-nc.org.
Checking the books
IRS audit of UNC- CH eyes benefits, taxes
An Internal Revenue Service audit of the
University of North Caroiina at Chapel Hill,
probably will focus on fringe benefits, retire
ment programs and unrelated business
income, officials at those institutions say.
By Barbara Solow
An audit of the University of North Carolina at
Chapel Hill, UNC-Hospitals and UNC-Charlotte
which is expected to last two years or more - is part
of a nationwide effort the IRS has launched to
examine the books of nonprofit colleges and hospi
tals.
EDUCATION
The agency does not comment on specific audits
or acknowledge which ones are underway But it
has acknowledged that teams of auditors began in
the early 1990s to look at large institutions at which
the lines between nonprofit and for-profit activities
sometimes can be blurred - specifically, universities
and hospitals.
The agency has collected approximately $5.2
milUon from 11 such audits it has completed. In one
case, at the University of Nebraska, the IRS found
the university had made mistakes in failmgto with
hold taxes from foundation stipends that went to
highly-paid employees such as coaches and admin
istrators, and from medical practices of university
professors.
The University of Wisconsin at Madison report
edly still is fighting an IRS bill for $81 million in
back taxes, and the University of Michigan recent
ly negotiated its $7.7 million bill down to $124,366.
When asked if the North Carolina audit will
have any effect on grant programs or foundations
operated by UNC-Chapel Hill, Roger Patterson, the
The IRS is looking at the books of UNC-Chapel Hill as part of
a larger focus on U.S. nonprofits.
university’s vice chancellor for finance, says proba
bly not.
“Fm not saying the IRS hasn’t been looking at
that,” he says. “But it’s generally not an area where
they spend a lot of time. They look at some
research-type grants, but not Pensively. They
know the areas they want to hone in on.”
Those areas likely are fringe benefits paid to
university employees, retirement programs and
activities that mi^t generate “unrelated business
income taxes” such as university-owned golf cours
es, Patterson says.
Even if no penalties are levied, IRS audits can
cause headaches for large nonprofits.
In a previous review of Duke University, the
IRS said officials should treat instructors for the
university’s continuing education program as
employees. Past practice had been to treat the
instructors as independent contractors.
University officials have said that making the
change would generate significant red tape and
could affect the willingness of individuals to work
as instructors for continuing education programs,
such as the statewide nonprofit management cer
tificate course.