Nonprofit “To Do List” for 2013


Whether you run a nonprofit or serve on the board, you have a responsibility to make sure your organization is both in compliance and in shape to weather any storm or to take advantage of growth opportunities.  But with everything else on your plate, there never seems to be enough time to step back, take stock, and launch that preventative compliance review, even if you know you should.  At minimum, there are 6 key things that any nonprofit can do – and every nonprofit should do - in 2013:

  1. Update Your Conflict of Interest Forms.  Ensure that every Board member and key officer has a current conflict of interest form on file.
  2. Review Your Internal Policies for Best Practices.  Under the new 990, several written policies are either required now or may become required soon.  Check to see whether your nonprofit has, or needs, a written policy on:
    • Conflict of interest
    • Whistleblower protection
    • Document retention/destruction
    • Investments/gift acceptance/use of charitable assets
    • Joint ventures
    • Easements
    • Compensation (including use of comparability data)
    • Grant-making
  3. Prepare for Filing Your 990.  Make sure to provide a copy of your 990 to your entire board, and to review the 990 at a board meeting with a quorum, particularly with regard to financial health, executive compensation, private inurement/excess benefits, unrelated business activity, relationships among board members and officers, and lobbying and political activity.
  4. Update Your Corporate Documents.   Ensure your mission statement complies with Section 501(c).  Make sure that your articles of organization and bylaws have been reviewed and updated in accordance with state law and (perhaps more importantly) with actual practice.  Make sure that any amendments are sent to the IRS and remain consistent with your exemption.
  5. Exercise Fiduciary Oversight of Third Parties.  If you haven’t sent contracts out to bid for professionals – especially auditors, attorneys, and investment professionals taking care of your charitable assets – in 3 years or more, consider doing so.
  6. Review Your Liability Protection. Take a look (or have your broker take a look) at your professional liability and D&O insurance policies to ensure that the coverage is adequate and there are no unintended exclusions (e.g. liability under ERISA).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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