A career in a non profit organization is rewarding, full of desire to facilitate a change. But compliance with 501(c) mollies can be like walking through a minefield. Non-compliance with these requirements can have very serious repercussions and, ultimately, jeopardize the agency’s mission and reputation.
And that is why Mighty News exists. We help your organisation to thrive by providing compliance assistance and keeping you out of the weeds so that you can focus on your mission.
The Fundamentals of 501(c) Status
The 501c federal designation by the IRS is an extraordinary armor in this regard for non-profit entities. That looks all the more like house exemption welfares that come with state risks and cheaper rates of postage. His wish granting utility belt comes with responsibilities, and the way people treat him is necessary given this opportunity church.
Just to do a quick recap, in details let us go through the most common areas where compliance is required (it takes me seconds to write this out as so few are needed):
• Public Benefit: Your organization should be a registered nonprofit to provide public benefit and not for the private benefit of any individual.
• Political Activity Restrictions: As a 501(c)(3), your organization is restricted in the amounts that may be spent on lobbying and political campaign activities.
• Financial Transparency: These relate to record-keeping; annual returns (Form 990), etc., and other stewardship over fundraising and charity financial assets.
I am an eternal pit fall of awareness loss when it comes to compliance concerns and 501(c). How do I avoid them?
Even when nonprofits take every possible measure to avoid noncompliance, they can still be in violation. Some typical traps and the things you can do to avoid getting ensnared.
Constituent Documents: In case of indefinite orabsent constitutive documents;
• Pitfall: Governance which did not adopt bylaws, conflict of interest and whistleblower policies may result in governance glitches/and or potential liability.
• Solution: Structure that provides clarity on role, procedure also puts restriction in company structure/ decision making etc.
• Example — Create enough resolution such as who is allowed to do what with shaped procedures of the Company It will conform a constitution in some stipulations and otherwise. Periodically update these to reflect state-of-the-art practices.
Financial Management Lack:
Pitfall: Weak financial management controls, mixing funds, or not submitting needed prudent financial reports to the IRS.
Solution: Tight control on the use of money, have other funds as well but you know who is responsible for what, profit & loss statements to board.
The one where they meet in the middle on organizational tasks and personal ambitions: Grey!
• Pitfall: Self-dealing by interacting with the nonprofit for your own advantage or entering into transactions that may violate IRS rules if benefits go to board members and/or key staff.
• Solution: such events shall be dealt as per the policy on resolution of incidents, which is attached herewith and A policy on conflict of interest to related party transactions assets being used for the personal purpose.
Mistake #1: Taking Fundraising Compliance Too Lightly
• Pitfall: Failure to register in certain states is the most likely misrepresentation of fundraising that will careen a charity’s public confidence, as well as to lead to litigation.
• Solution: Learn the state charitable solicitation rules & be compliant. Frame all your communication around the fundraising campaign transparently right from WHY, WHAT and HOW you plan to spend those funds.
Settling Down on the Form 990:
Pitfall: Penalties for not filing or filing forms 990 returns late. This might even Rub the Tax Exempt er on its nerve.
• One way of dealing with this: Everything staff needs to produce for marcoms should be gathered up at the beginning of each month/quarter and placed in a folder that everyone knows about. Remember that nearly all of the accounting software packages come from large for-profit corporations so consider this too. Have a more skilled accountant walk you through the completion of the forms.
Credit where it’s due: Your partners in 501(c) compliance— Mighty News
INTRODUCTION Life does not have to whither on the vine in an effort to meet 501(c) mandates. The Mighty News provides the direction and support you need so you can do what you do best and keep money coming in for your clients.
Some of our services provide:
• Compliance Audits: We will conduct a review of practical application to determine the actual existing risk areas(Expression ) → we need a modern language here.
Policy making:-We will help in Policy changes or introduction in relation to the Finance and Kanthari fund policies.
Training and Educational Workshops: We offer workshops and resources to educate your board and staff so you can comply the right way.
• Enforcement Support: We will respond to or refer you in accordance with any compliance needs you experience.
Do make sure, however, that compliance concerns never get in the way of doing good for your nonprofit. Mighty News Contact us for a FREE consultation to see how we can help you in your goals.
