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Keep Your Nonprofit In Good Standing

ost

nonprofits

are started by

idealistic

individuals

who see a need, and

come together because

they want to make

a difference. During

these early stages, the

energy is high and the mission is clear.The nonprofit,

if approved by the IRS, must continue to document

and meet certain IRS requirements if they wish to

ask for tax-deductible donations. Here is a list of

four often overlooked on-going requirements to

maintain your IRS status.

Is your nonprofit in line with your mission?

This might seem like the basic foundation of all

nonprofits but, in some cases, as the nonprofit grows

and more people become involved, the mission

becomes lost. From the board of directors, to the

employees, to the volunteers, does everybody have a

clear understanding of the goals of the nonprofit?

The mission statement should guide the board,

employees and volunteers as they represent the

nonprofit.

Are you dotting your I’s and crossing your T’s?

All nonprofits have a heavy burden of documentation.

Failure to follow the basics of what is required

can result in the loss of nonprofit status and, in a

lot of cases, significant tax penalties. Supporting

documents that justify the actions of the company

should be kept organized and in a safe place for

review. Invoices, donations, grants, employee records,

approved mission statements, state and federal

filings, and receipts are just a few of the documents

that must be maintained by the nonprofit.

Are the deeds of the nonprofit transparent to the

public?

Your mission, financials, good deeds and activities

should be clear and promoted to the public. If you

don’t have a website, you should.This is a great place

for you to promote the

mission and the cause

of the organization.

Not only is this a great

way to self-promote

the cause, it’s also

a way to show that

you are meeting the

requirements as outlined by the rules and regulations

for maintaining your nonprofit status.

How strong is your governing board?

The board of the nonprofit plays a critical role

in overseeing the eligibility of the nonprofit,

fundraising, and providing direction by leveraging

their individual strengths as directors. Not only

do you want to recruit people who believe in the

mission of the nonprofit, you want people who

understand how to read financials and have strong

connections in fundraising and marketing. Board

members should be individuals who don’t have any

relationship to the nonprofit. This helps eliminate

the perception that transactions are benefiting the

individuals and not the organization as a whole.

Most people or groups start nonprofits with the

intention of making a difference. Unfortunately,

good intentions are not enough to keep a nonprofit

legal in the eyes of the law or required regulations.

To obtain or maintain the benefit of nonprofit status

requires a great deal of work and documentation.The

good news is that there are many services available

that can help you manage this side of the business,

so don’t let the extra effort stop you from fulfilling

your mission.

Aaron Young has empowered business owners for over 20 years

to build strong companies and proactively protect their dreams.

Aaron has made it his life’s work to arm business owners with

success formulas that immediately provide exponential growth

and protection. As CEO of Laughlin Associates, Aaron advocates

for entrepreneurs and is a pioneer in the incorporation industry.

Aaron Young

Planning