It takes time, planning and patience to create a nonprofit organization so you want to make sure you are doing everything necessary to stay compliant to keep your nonprofit status. Nonprofit organizations, especially 501(c) 3 organizations, rely on fundraising, donations, community support and a variety of events to fulfill your mission. Did you know there are more than 40 states that require different forms, requirements, fees, due dates and extension dates? Keeping this in mind, there are also some very important steps you must take to maintain your nonprofit status. Here is a list of some things you need to know about charity compliance:
- File a Form 990 Return: A Form 990 is how nonprofit organizations provide the United States Internal Revenue Service with financial information. If it is not filed on time, the nonprofit may lose their tax-exempt status.
- Maintain Organized Records: All nonprofit organizations must keep accurate records for every fundraiser, donation, sponsorship, volunteer's in-kind hours, etc. Proper paperwork is critical to filing taxes but will also be essential if someone accuses the nonprofit of an impropriety or accuses an officer or member of an impropriety.
- Adhere to The Bylaws: Nonprofits apply to their states to become incorporated. To be incorporated, an organization must have a set of bylaws or rules established for everyone involved, the executive director, board of directors, etc., to follow. In the event that anyone violates the bylaws, legal consequences could occur and a nonprofit status could be in jeopardy.
- Hold Frequent Board Meetings: A nonprofit organization is governed by a board of directors who must have frequent board meetings (at least annually). The rules are usually stated in the bylaws to stay compliant.
- Refrain from Compensating Directors: A nonprofit organization should generally refrain from paying any of their officers or directors. This could be considered a conflict of interest, for example if the director were to vote on compensation or another topic that would personally benefit them. Boards are usually are consisted of volunteers who are passionate about the organization's mission, and some bylaws prohibit Directors from being paid.
- Know Your State Laws: You should know what forms your state requires to legally hold fund-raising events. For example, some states require special licenses for Bingo games, raffles and other games of chance. There are some activities that do not need to be licensed like volunteer activities, a resale of a donation or an activity that benefits officers, employees or clients. Knowing the state tax laws and adhering to them are essential for your charity compliance.
- Renew your State Charity Registrations annually. With each state there are different forms, requirements, fees, due dates and extension dates. Additionally, some states may amend their laws, so be sure to keep up with the states on any law changes, form changes, or fee changes.
But there is good news! This is where we at Charity Compliance Solutions steps in. We take you step by step through the registration process. With each state there are different forms, requirements, fees, due dates and extension dates. We sort all of that out for you so that you can stay focused on fulfilling your organization’s mission. We keep track of all the due dates, submit all available extensions on your behalf, and complete all of the renewal forms. We keep up with the states on any law changes, form changes, or fee changes.
We realize that each organization is unique and we go out of our way to tailor our services to meet your needs. With all of the different forms, due dates and fees this amounts to quite an overwhelming task. Let us handle it for you – Contact us today!