Welcome, October! In the last quarter of the year, we remind our clients about some of their year-end obligations, or help them get ahead on issues they may have been putting off. Or maybe both! Today we’ve got some tips for the busy nonprofit professional.
1. Annual Meeting & Minutes of Meeting(s)
Has your board held its annual meeting this year?
Your board needs to meet…in an official meeting! With minutes taken!
Your organization’s governing documents (articles of incorporation and bylaws) likely set out how often the board of directors must hold meetings. State corporate laws also may set out how often nonprofit board of directors needs to meet — at a minimum, it probably sets out that your organization should hold a meeting at least once a year. Check to determine how often your board is required to meet in an official meeting.
Also check to see notice requirements – how much notice do you need to give directors and/or members about the meeting? What type of notice are you required to give?
Meetings are the times when the directors (or members, for member meetings) conduct key business, which may include
- approving budgets, reviewing financial statements
- electing new board members and/or officers
- hearing updates of the organization’s work
- conducting other business matters
- review policies and procedures, which may include investment policies, conflict of interest policies, employment policies
- approving resolutions on various matters
If you find that your bylaws set out for multiple meetings a year (monthly, quarterly), and your board hasn’t been meeting that requirement, it may be time to consider your operations and possible revision of bylaws.
Read: What Does a Board Do?
Did you get minutes taken and approved from that meeting?
Keep minutes of these meetings! Your organization should keep a copy of minutes of meetings of directors and any committees having the authority of the board of directors. Different state laws may set out how to keep such minutes.
Read more: What Should We Include in Minutes?
2. Thank your donors
Have you thanked your donors for their gifts?
We know you may be in the midst of a year-end fundraising drive. Many nonprofits rely on donations for continuation of their work. In your asks, don’t forget to thank and acknowledge your donors.
We believe that all donations – regardless of size – deserve a quick and heart-felt recognition of thanks. Nothing makes donors happier than receiving a prompt thank-you from a charity just supported. (Try something different – give the donor a quick call or text in addition to that thank you email/letter) .
Note that donors who make contributions over $250 need written acknowledgement to claim the deduction on their individual tax returns. Are you helping donors get what they need? Acknowledgments differ for cash gifts and non-cash gifts.
Read more: Donation Acknowledgment Letters
3. IRS Tax Reports
Have you filed your IRS Tax Informational Report – IRS Form 990?
Most exempt organizations file this annual return. The type of Form 990 to be filed by an organization depends on the filing year and the gross receipts of the organization. The different forms include Forms 990, 990-EZ and 990-N.
When is your 990 due?
Due dates for this IRS Form 990 differs based on the end of your organization’s fiscal year. The Form 990 generally is due 5 1/2 months after the close of the fiscal year. So, for organizations on the calendar year (year end of December 31), the IRS Form 990 will be due May 15. You may have filed for extensions (3 months or 6 months) since that initial deadline – so it may be time to get that 990 submitted.
And related to taxes….Have you collected W-9s for service providers and/or vendors to your nonprofits? You’ll be getting those 1099-Misc. forms out in January…so now is the perfect time to make sure you have what you need.
Read more: Nonprofit Tax Returns / Form 990
4. Grants & Contracts Reporting
Do you have financial grants from the government or from foundations that require certain reports?
Many government and non-government grants require the recipient of the funds (the nonprofit organization) to report on financial and program activity. Some require periodic reports; others require year-end reports. Some are narrative in description (what you did with the funds, who you served, progress towards meeting objectives, etc.); others are financial in nature (profit/loss, budget to actuals, etc.). The donor wants to know how the funds were used. Review the terms of such grants and complete those reports.
5. State Reports & Registrations
Have you filed any required annual or periodic report with your state agency?
Many states require annual reports to be filed with the state corporation’s office (Secretary of State). Reports differ by state, but most reports request updates on addresses, registered agent information, and names of officers and directors. Filing these annual reports are required for the nonprofit to maintain an “active status” with the state.
Some of the best organizations find themselves being penalized because they didn’t know of this obligation. Sometimes, those organizations do not know of the obligation because they used the founding board member’s address as the organization address. Since board members move and move off the boards, sometimes mail can get lost. That is no excuse to the state business office for not getting reports filed.
Check with your state’s business office (again, often called the Secretary of State) to know for sure.
Texas nonprofits can check their status with the Texas Secretary of State and fill out Texas’s nonprofit periodic report at least every four years. We have our clients file such reports when officers and directors change.
Have you filed any required tax reports with your state’s tax office?
Many states require an annual state tax filing. Check with your state comptroller’s officer on tax filing requirements.
What about state charitable/fundraising requirements?
Most states have adopted “charitable solicitation” laws. These laws differ greatly by state, but they are mainly designed for nonprofits and charitable organizations that make fundraising appeals in that state. The definitions of “fundraising appeal” or “charitable appeal” vary by state.
In some states, these registration rules are called a registration statement; in others, it’s called a license, solicitation permit, or certificate.
The Multi-State Filer Project website provides lists of each state and what registration rules apply.
Ready to some compliance help?
Cullinane Law Group provides comprehensive report compliance for tax-exempt organizations. We work as an extension of your team, providing support to your organization.