1. Purpose and Activities:
-Clearly define the organization's mission and charitable purpose.
Ensure that the activities align with the stated purpose and are exclusively for charitable, educational, religious, or scientific purposes.
2. Governance and Board Responsibilities:
-Establish a governing board with a minimum of three unrelated individuals.
Maintain documentation of board meetings, minutes, and decision-making processes.
Ensure the board members do not receive excessive compensation and avoid conflicts of interest.
3. Non-Distribution Constraint:
-Prohibit the organization from distributing profits or assets to individuals or private shareholders.
Dedicate the organization's assets solely to furthering its tax-exempt purpose.
4. Financial Recordkeeping:
-Maintain accurate and detailed financial records, including income, expenses, and balance sheets.
Implement appropriate accounting practices to demonstrate transparency and accountability.
5. Fundraising and Donor Relations:
-Comply with all state and federal regulations regarding charitable solicitations and fundraising activities.
Provide donors with timely and appropriate acknowledgment letters for tax purposes.
6. Reporting and Filings:
-File the annual Form 990 with the IRS, including all necessary schedules and attachments.
Submit state-specific annual reports and comply with any additional reporting requirements.
7. Employment and Compensation:
-Adhere to fair employment practices, including equal opportunity and non-discrimination policies.
Ensure reasonable and appropriate compensation for employees, avoiding excessive salaries.
8. Lobbying and Political Activities:
-Understand the limitations on lobbying activities for 501(c)(3) organizations.
Prohibit participation in political campaigns or endorsing specific candidates.
9. Maintaining Tax-Exempt Status:
-Monitor activities to ensure ongoing compliance with IRS regulations.
Seek legal advice when making significant changes to the organization's structure or activities.
10. Public Disclosure
-Make the organization's Form 990 and other required filings available to the public upon request.
Maintain transparency by providing information about programs, finances, and governance on the organization's website.