The board members of a nonprofit are legally responsible for overseeing everything the nonprofit does. California state law strictly controls how a board manages its affairs and sets high standards for board members’ conduct. Failure to satisfy these legal standards – i.e., the board members’ “fiduciary duties” – can result in personal liability for directors …
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Disclosure Requirements for Nonprofits
The IRS and some states require nonprofits to disclose certain documents to the public upon request. Additionally, the IRS and some states even make these documents available to the public. Donors want to be able to ensure that the nonprofits they donate to are spending their contributions wisely. Maintaining transparency – which nonprofits accomplish in …
How to Handle Conflict of Interest Transactions Within a Nonprofit
It is a best practice for nonprofits to have a conflict of interest policy to guide them on how to approach conflict of interest transactions. Such a policy will help ensure that, when actual or potential conflicts of interest arise in connection with a proposed transaction, the nonprofit has a process in place under which the relevant individual(s) will advise the governing body about all the pertinent facts concerning …
Charitable Solicitations: What to Know About Fundraising Registrations and Permits as a Nonprofit
Most states and even some localities require nonprofits to register or obtain permits for the privilege of asking their residents for donations. This type of fundraising activity is called “charitable solicitations” and is heavily regulated to prevent fraud and harassment of the public. While it varies by state, county, and city, any activity that invites someone to …
Charitable Donations and Nonprofits
Any organization that has received an IRS determination letter recognizing it as a 501(c)(3) organization may offer donors a tax deduction for their donations. However, for your donors to receive a tax deduction, your nonprofit must properly acknowledge charitable contributions it receives by following the requirements described below. What is a Donation Acknowledgment? As summarized …
Annual Filing Requirements for California Nonprofit Public Benefit Corporations
Introduction A California Nonprofit Public Benefit Corporation is required to file several forms each year to remain in good standing as a nonprofit corporation and maintain 501(c)(3) status. This blog summarizes the main annual filing forms, which forms to file, due dates, and potential ramifications for failure to comply. Why These Forms Are Crucial The …