For those starting a charitable nonprofit, completing the IRS Form 1023 - Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code – may be the most difficult part of the process. Form 1023 includes 11 Parts and 8 Schedules. A critical section for an applicant to complete carefully is Part IV, Narrative Description of Your Activities.

The Form itself provides the following directions:

Using an attachment, describe your past, present, and planned activities in a narrative. If you believe that you have already provided some of this information in response to other parts of this application, you may summarize that information here and refer to the specific parts of the application for supporting details. You may also attach representative copies of newsletters, brochures, or similar documents for supporting details to this narrative. Remember that if this application is approved, it will be open for public inspection. Therefore, your narrative description of activities should be thorough and accurate. Refer to the instructions for information that must be included in your description.

The Instructions to Form 1023 provide further guidance: 

Describe completely and in detail your past, present, and planned activities. Do not refer to or repeat the purposes in your organizing document. You may refer to other parts of the application rather than repeat information provided elsewhere.

For each past, present, or planned activity, include information that answers the following questions.

• What is the activity?
• Who conducts the activity?
• When is the activity conducted?
• Where is the activity conducted (for example: Los Angeles and San Francisco, California)?
• How does the activity further your exempt purposes?
• What percentage of your total time is allocated to the activity?
• How is the activity funded? (This should agree with the financial data in Part IX.)
• List any alternate names under which you operate, including any “aka” (also known as) or “dba” (doing business as) names.

If you have a website, you may attach a paper copy to support your narrative description of activities. 

Despite the instructions, many applicants complete Part IV by simply stating their mission and providing a very short description of their programs. Such a deficient approach may create a couple of problems. First, the IRS agent reviewing the application may believe the IRS does not have sufficient information to make a determination of whether the applicant qualifies for 501(c)(3) status, which can cause a sometimes lengthy delay or, at worst, a denial of the application. Second, the Form 1023 is a public document that must permanently be made available to anyone who asks, and a sloppy attempt at completing the narrative may negatively influence regulators as well as prospective funders and supporters.

Form 1023 should be treated as one of an organization's most important and monumental documents (501(c)(3) status is conferred or denied on the basis of its contents). The narrative of activities, in particular, should reflect the values of the organization. If the organization wants to be viewed as professional, responsive, organized, compliant, honest, and trustworthy, the narrative should reflect all these qualities.