It’s about to be the end of another year which means there’s some yearly housekeeping every nonprofit organization must do. Here are six things every nonprofit should do before the end of the year:
1. Have Your Annual Meeting. The bylaws for most nonprofit corporations require the organization to have an annual meeting. This is usually the meeting where the organization’s members or board of directors elect new officers and directors, fill any open positions, approve budgets and approve actions taken by the organization during the year. If you want to make sure everything is done correctly, call Phoenix charity lawyer Abigail Neal. I can attend your annual meeting, answer any questions the organization, its board or members may have and prepare the organization’s annual minutes.
2. File Your Annual Report. The Arizona Corporation Commission requires all nonprofit corporations to file an annual report. This can be done online by looking up the organization in the ACC’s database and clicking on the “file annual report” button. Failing to file an annual report can have negative consequences for the corporation, such as the ACC administratively dissolving the corporation.
3. Review Accounting and Tax Information. Work with the organization’s CPA and confirm that all of the organization’s accounting and tax information is up to date. Even though 501(c)(3) organizations are exempt from federal income tax, they still must file their annual Form 990, 990 EZ, 990-N or 990-T, as well as a state return. Filing the organization’s tax returns is critical as failure to file a federal tax return for three consecutive years will cause the organization to lose its tax exempt status. Ensuring that all of your organization’s accounting and tax information is current will save the organization a lot of time come the tax deadline.
4. Calendar Solicitation Registrations. Arizona nonprofit corporations are required to file a solicitation registration with the Arizona Secretary of State. This is required if the organization intends to solicit funds for the organization from Arizona residents. The Secretary of State requires that the registration be filed between September 1 and September 30 of each calendar year. The registration form can be found here. Organizations with 501(c)(3) status may instead file a copy of their annual federal tax return with the Secretary of State or give the Secretary of State a link to the web address where the return can be viewed.
5. Review Insurance Policies. Every nonprofit organization should review their insurance policies annually to ensure that all coverage limits are adequate to cover the nonprofit’s current activities.
6. Thank Donors and Provide Receipts. The end of the year is a great time to thank your donors for their generous contributions. You can also kill two birds with one stone and use the opportunity to acknowledge the gift as required by IRS regulations. Remember, if you don’t give a donor the proper gift receipt which can be used to substantiate the deduction on the donor’s return, the donor probably won’t want to give to your organization again.
Questions? Call Arizona nonprofit lawyer Abigail Neal at (480) 699-7992.