Once your nonprofit has obtained 501(c)(3) status, it’s crucial to maintain compliance to keep your tax-exempt status and continue operating effectively. Task Wiz provides ongoing support to ensure your nonprofit stays compliant with all regulatory requirements.
Step 1: Annual Filing Requirements
Nonprofits must file an annual return with the IRS using Form 990, 990-EZ, or 990-N, depending on their financial activity.
Annual Filing Schedule
- IRS Form 990 Due Date: Typically due on the 15th day of the 5th month after the end of your fiscal year.
- State Annual Report Due Date: Varies by state; check your state’s specific requirements.
- Charitable Solicitation Renewal Dates: Ensure timely renewal of your state registrations.
Filing these forms accurately and on time is crucial for maintaining your tax-exempt status and avoiding penalties.
Step 2: Board Governance
Maintaining a strong and active board of directors is essential for effective nonprofit governance. Regular board meetings and ongoing training are important for keeping your board engaged and informed.
Board Meeting Agenda
- Call to Order: Opening of the meeting.
- Approval of Minutes: Review and approval of previous meeting minutes.
- Financial Report: Presentation and discussion of financial status.
- Old Business: Updates on ongoing projects and initiatives.
- New Business: Introduction and discussion of new topics.
- Adjournment: Closing of the meeting.
Regularly scheduled board meetings, documented with detailed minutes, ensure that all board members are aware of the nonprofit’s activities and decisions.
Step 3: Financial Management
Implementing sound financial practices and conducting regular audits are critical for maintaining transparency and accountability.
Financial Management Checklist
- Monthly Financial Statements: Regular review of income and expenses.
- Annual Audit: Independent audit to ensure financial integrity.
- Budget Review: Regularly review and adjust the budget as needed.
- Financial Policies Update: Update policies to reflect current practices and regulations.
Proper financial management practices help build trust with donors, beneficiaries, and regulatory agencies.
Step 4: Conflict of Interest Policy
A conflict of interest policy helps prevent and address potential conflicts within your organization, ensuring that decisions are made in the best interest of the nonprofit.
Conflict of Interest Policy
- Purpose: Statement of the policy’s purpose.
- Definitions: Explanation of what constitutes a conflict of interest.
- Procedures: Steps for disclosing and addressing conflicts.
- Annual Statements: Requirement for board members to disclose potential conflicts annually.
- Periodic Reviews: Regular review of compliance with the policy.
Adopting and enforcing a conflict of interest policy helps maintain the integrity and reputation of your nonprofit.
Step 5: Fundraising Compliance
Fundraising activities must comply with federal and state laws. This includes registering with state charity officials and obtaining necessary permits.
Fundraising Compliance Checklist
- Register with State Charity Officials: Ensure your nonprofit is registered in all states where you solicit donations.
- Obtain Necessary Permits: Secure permits for fundraising events as required.
- Report Fundraising Income: Accurately report all fundraising income to the IRS and state authorities.
- Acknowledge Donations: Provide proper acknowledgment to donors for their contributions.
Compliance with fundraising regulations ensures that your nonprofit can continue to raise funds effectively and ethically.
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