Running a nonprofit

Most of running a nonprofit is one annual cycle, repeating. Once you can see the shape of it, your year stops being a series of unpleasant surprises and becomes a calendar you can plan around.

This is the section for the part of the job nobody warns you about: the filings, the policies and the paperwork that quietly keep your charter alive.

Your annual return, and the rule that catches people

Every exempt organization files an annual return. Which one depends entirely on size.

• Form 990-N, the electronic postcard, if gross receipts are normally at or under $50,000. Eight questions, a few minutes, free.
• Form 990-EZ if receipts are under $200,000 and total assets are under $500,000.
• Form 990, the full return, if receipts are at or above $200,000 or assets are at or above $500,000.

The deadline is the fifteenth day of the fifth month after your fiscal year ends. For a calendar year organization, 15 May.

Now the part worth putting in your calendar today. Miss the return three consecutive years and your exempt status is revoked automatically. Not reviewed. Not appealed. Revoked by operation of law, and the IRS publishes the list.

Getting it back means applying again and paying again, and donations received in the gap may not be deductible. This is the single most common way small organizations lose exemption, and it overwhelmingly happens to groups who assumed the postcard was optional because they were small. It is not. The 990-N exists precisely so that small organizations have something to file.

The state layer nobody mentions

Your federal return is not the end of it, and filing it does not trigger anything at state level.

Most states want an annual or biennial corporate report to keep the entity in good standing. Many separately require charitable solicitation registration, renewed annually, before you may ask residents for money. These are different filings, with different deadlines, handled by different offices, often with different fees.

An organization can be perfectly current with the IRS and administratively dissolved by its own state. It happens more than you would think.

Governing documents that actually govern

Bylaws are not a formality you write once and file away. They decide who can call a meeting, what counts as a quorum, how directors are elected and removed, what happens when the board deadlocks, and who has authority to sign.

A dispute is exactly when someone reads them properly, and exactly the wrong moment to discover they say something unworkable. Read yours now, while nothing is wrong.

Alongside them, a conflict of interest policy is expected rather than optional. The full Form 990 asks whether you have one, and answering no is a signal to anyone reading your return.

When you actually need an audit

Less often than people assume, and the trigger is rarely the IRS.

Audits are usually required by one of three things: a state threshold tied to contributions received, a specific funder's grant conditions, or your own bylaws. The IRS does not require an independent audit of exempt organizations as a matter of course.

Before commissioning one, find out which of those three is actually driving the requirement. A review or a compilation costs considerably less than a full audit and sometimes satisfies the condition.

Records worth keeping, and for how long

• Board minutes for every meeting where a decision was made. Permanently.
• Your determination letter. Permanently, and somewhere you can find it. Funders and banks ask for it constantly.
• Governing documents and every amendment. Permanently.
• Financial records supporting each 990. At minimum through the audit window for that return.
• Written acknowledgements issued to donors. Your donors depend on these, and reissuing from memory is not possible.

What we are writing next

Bylaws with a template and a clause-by-clause explanation, a conflict of interest policy, which 990 applies to you and how to file it, when an audit is genuinely required, and board composition and duties in practical terms.

Your compliance year, at a glance

Note that these are separate obligations to separate authorities. Filing your federal return triggers nothing at state level, and an organization can be perfectly current with the IRS while being administratively dissolved by its own state.

In this subject

• Which Form 990 do we file? The thresholds, the deadline, and the three-year rule that ends organizations.

The single highest-value hour

Put your annual return deadline in a shared calendar, with a reminder a month ahead, and record in your board minutes who is responsible for filing it.

Almost every automatic revocation traces back to the same event: a treasurer left, and the filing left with them. A shared calendar entry and a named owner in the minutes costs an hour and prevents the failure that most commonly ends small organizations.

Reference information, not legal or tax advice. Requirements vary by state and change. For anything with real consequences, check irs.gov or your state registry and talk to a nonprofit attorney or CPA.