Creating a 501(c)(3) nonprofit organization is a significant achievement that comes with ongoing responsibilities, including maintaining compliance with various legal and regulatory requirements. Here’s a guide to some of the key documents and regulatory tasks you’ll need to handle after your nonprofit has been established:
1. IRS Form 990
The IRS requires most tax-exempt organizations to file an annual Form 990. This form provides the IRS with information about your nonprofit’s activities, governance, and detailed financial information. The specific version of Form 990 you’ll need to file depends on the size and nature of your organization:
- Form 990-N: For organizations with gross receipts of $50,000 or less.
- Form 990-EZ: For organizations with gross receipts less than $200,000 and total assets less than $500,000.
- Form 990: For organizations with gross receipts over $200,000 or total assets over $500,000.
2. State Filings
Depending on your state, you may have additional annual or biennial reporting requirements:
- Annual Reports: Often required to keep your organization in good standing. These typically include updates on your address, directors, and operations.
- Charitable Solicitation Registration: Many states require nonprofits that solicit funds to register with a state agency, usually the Attorney General’s office or a specific Charities Bureau.
3. Corporate Records
Maintaining accurate records is crucial for compliance:
- Minutes of Board Meetings: Regularly update and store minutes from board meetings and any major decisions made by the board.
- Amendments to Bylaws or Articles of Incorporation: Any changes made to these foundational documents should be documented and reported as required by state law.
4. Conflict of Interest Policy
It’s important to have a conflict of interest policy in place to ensure that decisions are made in the best interest of the nonprofit without personal gain influencing those decisions. This policy should be reviewed annually by each board member.
5. Financial Audits
For larger nonprofits, particularly those that receive significant amounts of public donations or federal grants, an annual audit by an independent accountant is often required. This helps ensure financial transparency and trustworthiness.
6. Employment Laws
If your nonprofit has employees, comply with federal and state employment laws, including:
- Labor Posters: Display required federal and state labor law posters in a prominent location.
- Employee Classification: Ensure that workers are correctly classified as employees or independent contractors.
- Payroll Taxes: Regularly file payroll tax returns and ensure that taxes are properly withheld.
7. Insurance
Maintain appropriate insurance coverage:
- General Liability Insurance: Protects against claims of bodily injury or property damage.
- Directors and Officers Insurance: Protects board members and officers against claims arising from their organizational decisions.
8. 501(c)(3) Compliance
Ensure all activities and financial transactions support your mission and comply with IRS rules for 501(c)(3) organizations to maintain your tax-exempt status:
- Public Benefit: Operations must primarily benefit the public, not private interests.
- Lobbying and Political Activity: Understand the limitations on lobbying and prohibitions against political campaign activity.
Regularly reviewing these aspects and staying informed about changes in laws that affect nonprofit organizations will help ensure your organization remains in compliance and continues to thrive.
Disclaimer
Please note that the information provided in this blog post is for general informational purposes only and is not intended as legal advice. We do not guarantee the accuracy of this information, and it should not be used as a substitute for legal or professional advice. We recommend consulting with a qualified attorney or professional advisor to address specific legal issues related to your nonprofit organization.