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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.

01 | Federal (IRS) Financial Compliance
Nonprofit organizations must maintain tax exempt status and also comply with annual IRS filing requirements. For information on keeping your tax exempt status, see our articles How to Keep your Tax Exempt Status: Part 1 and Part 2.

02 | Form 990
After receiving a favorable determination as a 501(c)(3) organization, the IRS further requires nonprofit organizations to annually file an information return as a Form 990. Different types of 501(c)(3) organizations may file slightly different versions of Form 990 such as:

  • 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.

03 | Form 990-T for Unrelated Business Income
In addition to a Form 990, a 501(c)(3) organization that receives unrelated business income needs to file a Form 990-T, which is used to report income from a trade or business that the organization regularly carries on and that is not substantially related to its exempt purposes.

04 | Annual Report
Although an annual report doesn’t have to be filed with the federal government every year, nonprofits are still required to disclose certain information when requested by the public. Publishing an annual report on the organization’s website proactively makes that information transparent– and serves as a powerful marketing tool. Learn more here.

05 | California State Requirements
All nonprofits must also comply with California’s filing requirements with the Franchise Tax Board, Attorney General and Secretary of State. This includes:

  1. 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.
  2. 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.
  3. 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.

Related Resources:

Disclaimer: Although this article may be considered advertising under applicable law and ethical rules, the information in this article is presented for informational purposes only. Nothing herein should be taken as legal advice and this content does not form an attorney-client relationship. If you would like further information, Wilkinson Mazzeo would love to hear from you, so please feel free to reach out with any questions! Privacy Policy / Disclaimer

FROM THE EDITOR
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