We can all agree that starting a nonprofit organization has its advantages. You can register for tax exemption from the state and local government. You have access to grants and other forms of public funding. And—most importantly—you get to work for a cause that truly matters to you.
However, all of those advantages come with responsibilities, and it’s important to not take those responsibilities lightly.
In receiving significant financial benefits from the government, nonprofits are held to a high standard. It’s your responsibility to stay in compliance with the rules that allow you to continue operating as a tax-exempt nonprofit.
Here are six things you must remember to do in order to keep your nonprofit compliant:
1. File Your Paperwork on Time
Depending on your nonprofit’s structure, location, and other factors, you will need to file a lot of paperwork as a routine part of doing business. Common examples of forms you may need to file include IRS Form 990, a license to fundraise, a state business license, and more.
2. Maintain Detailed Records
Maintaining accurate and comprehensive records of your organization’s activity is vital to ensuring your nonprofit is operating correctly. Be sure to keep organized records of organizational information, as well as expenses, contributions, and other financial information.
3. Hold Routine Board Meetings
Nonprofit organizations must conduct board meetings at least once per year. Board meetings are the appropriate setting to make major decisions and review your organization’s activities. Specific rules about how to conduct your nonprofit’s board meetings should be included in your bylaws.
Speaking of bylaws…
4. Don’t Violate Your Bylaws
Your organization’s bylaws govern all aspects of your nonprofit’s activity. Failing to operate appropriately within the parameters of your bylaws can have consequences, both legal and otherwise.
5. Stay Out of Politics (Unless You Know What You’re Doing)
Unless you intentionally set up your nonprofit to be politically active, it’s important to use caution when making political donations or lobbying for legislation. Political nonprofits are held to different standards than those that are not politically involved, so make sure you know what you’re getting into if you decide to become politically active.
6. When in Doubt, Call the Experts
As you can see, keeping your nonprofit in compliance and in good standing with government regulatory agencies can be complicated, tedious, and even frustrating. And that’s just scratching the surface. Thankfully, that’s why we’re here.
Resilia’s Tax Exemption and Tax Exemption Plus plan comes with an Essentials service, designed to ensure nonprofit founders like you are doing everything necessary to stay compliant with all government agencies. Say goodbye to the complications of trying to remember every aspect of staying compliant. Schedule your free consultation today to learn more about how Resilia can help you!