Here are five key compliance areas a nonprofit public charity can review in one hour. If there are past compliance issues, it would be best to confer with a knowledgable attorney. But ensuring that you are doing these things correctly moving forward will strengthen your organization and your confidence in leading it.
One. Review your Articles of Incorporation. Make sure the purpose statement encompasses your stated mission and your current and planned activities.
Two. Review your Bylaws. Make sure the directors have all been selected consistent with the requirements in a timely manner. Most commonly, directors are elected by the board. However, some nonprofit corporations require voting members to elect the directors and some provide authority to certain designators to designate (appoint) directors. Also, Bylaws may provide for ex officio directors who are automatically directors by virtue of holding some other position within or outside of the corporation. Note that ex officio does not mean non-voting.
Three. Review the donation receipts you provide to donors to ensure they are sufficient to allow for donors to be able to take a charitable contribution deduction. For donations of $250 or more, the receipt must take the form of a written acknowledgment, which must include a statement that no goods or services were provided by the organization, if that is the case.
Four. Check your organization’s current status with the IRS using the Tax Exempt Organization Search (TEOS) Tool. If applicable, check its current status with the state taxing authority. In California, this can be done by obtaining an Entity Status Letter from the Franchise Tax Board.
Five. Check your organization’s current status with both your state’s Secretary of State (or business entity agency) and charity regulator. In California, this can be done by using the online Secretary of State’s Business Search (where you can also obtain a “good standing certificate” for a nominal fee) and Attorney General’s Registry of Charitable Trusts Verification Search.