Legal Minute: 3 Annual Requirements Every Nonprofit Should Know
Congratulations, you’ve received 501(c)(3) status, so now what!? Read this article to learn about your yearly obligations as a nonprofit organization at the federal (IRS), state, and board governance levels.
- Private foundations file Form 990-PF
- 501(c)(3) organizations with gross receipts of less than $200,000 and total assets of less than $500,000 at the end of the tax year can file Form 990-EZ.
- Some small 501(c)(3) organizations whose annual gross receipts are normally $50,000 or less can file Form 990-N.
The Form 990 must be filed by the fifteenth day of the fifth month after the end of the organization’s accounting period. For a calendar-year filer, the return is due by May 15th. The filing deadline can be extended by filing Form 8868.
- Franchise Tax Board: To gain tax-exempt status at the state level, organizations must file an Exemption Application with the FTB, which is Form 3500. Additionally, each year tax-exempt organizations with annual gross receipts of $25,000 or less must electronically submit information using Form 199N.
- California Attorney General Initial and Annual Requirements: Nonprofits must initially register with California’s Attorney General Office within 30 days of receiving assets such as property or funds by filing Form CT-1. Each year after, nonprofits must file Form RRF-1 within four months and fifteen days after the end of an organization’s accounting period.
- California Secretary of State’s Statement of Information: Finally, nonprofits are also required to file the California Secretary of State’s Statement of Information, Form SI-100, initially within 90 days after filing Articles, and then every other year after that.
Note: WilkMazz automatically files Form 3500, Form CT 1, and Form SI 100 for all non-profit formation clients.
Board Governance: Annual Meetings Required, Quarterly Meetings Recommended
Nonprofit organizations must hold board meetings annually and each time a director is elected. But, because board meetings are such a crucial part of running an effective organization, we recommend the board meet quarterly.
What is board governance?
Every nonprofit organization must make informed choices—governance simply describes this process, a process that involves making choices about why we’re here, what we want to accomplish, the best ways to achieve those results, the resources we’ll need to do these things, how to secure these resources, and how we will know whether we are making a difference.
More specifically, for nonprofit organizations “board governance” refers to the process in which the board of directors provides strategic leadership to the nonprofit organization. In doing so, the board of directors helps set the organization’s direction, decide policy and strategic matters, oversee and monitor the organization’s performance and ensure overall accountability.
All this action typically occurs during board meetings. Therefore, even though meetings are only an annual requirement, nonprofits typically hold quarterly board meetings, recognizing that board governance is the foundation of a well-run, mission achieving organization. Read our article here, for more information on how to run a board meeting.
- Nonprofit Board of Directors FAQs
- 5 Legal Tips Every Nonprofit Should Know
- Required Tax Receipt Language (and a Tip)
FROM THE EDITOR
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