Ensuring compliance on a regular basis can be a daunting task for many nonprofit organizations. This undertaking can be simplified to some degree by leaders reviewing certain organizational and governance aspects that could expose weaknesses and prompt action towards compliance. Simple tasks include:
- Confirm that required annual filings have been made to maintain the organization's good standing with the appropriate state agency.
- Review governing documents, such as articles of incorporation and bylaws, to confirm that the governing body has the requisite number of directors and officers that have been duly elected.
- Review corporate records for documentation of the annual meeting and other meetings that have taken place throughout the year.
- Ensure that the organization's mission and activities conform to the governing documents and filings made with the IRS.
- Determine whether the organization's activities cross state boundaries and require compliance with each state's registration requirements for doing business or soliciting for charitable contributions.
- Review Form 990-PF or Form 990, as applicable, for accuracy in disclosing the organization's activities for the reporting year and to ensure annual reporting with the IRS and state department of revenue is completed.
- Check the organization's information posted on guidestar.org to ensure it is current and accurate.
- Acknowledge the existence of, and compliance with, the organization's conflict of interest policy.
- Confirm that donations are properly acknowledged and receipts are given.
- Review employee compensation for reasonableness.
These are some of the basic actions that should be taken by nonprofit organizations to review its level of compliance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.