With the year’s end in sight, now is a great time for nonprofit board members and other key leaders to think ahead to next year’s plans and goals. From a legal perspective, the beginning of a new year may be an optimal time to check up on the organization’s annual and other legal compliance matters as follows. By doing so, nonprofit leaders can better fulfill their fiduciary duty of due diligence to responsibly govern the organization. The following guidance is an updated version of our law firm’s year-end reminders.
1) Check Filing Deadlines for Government Reports.
Most nonprofits must file periodic government reports, ranging from annual reports owed the Secretary of State (typically in the anniversary month of incorporation), the IRS Form 990, state charitable solicitation renewals, and employment-related filings (due quarterly and/or annually). For effective leadership, nonprofit board members should be aware of these filing requirements and exercise oversight to make sure they are satisfied. A spreadsheet or chart may be helpful for organizations that operate in multiple states to track the applicable filing deadlines, since they can vary from state to state. Coordination with the organization’s accountant and payroll service may be key, as well, especially for significant employment changes. Since the proverbial buck stops with the board, directors need to stay informed and on top of these requirements.
Note that the IRS Form 990 deadline is May 15 for organizations operating a calendar fiscal year (i.e., four and half months after the fiscal year close). Early preparation can be critical, particularly for organizations that receive more than $200,000 in annual revenues and therefore must file the full-blown Form 990. (And one question on the Form 990 asks whether board members have had an opportunity to review it. The “right” answer is “Yes.”) Other organizations with lower revenues may be eligible to file the considerably shortened Form 990-EZ or even the “e-postcard” Form 990-N.