When a nonprofit discovers that misuse of funds has occurred, it’s critical to report the misuse to all appropriate agencies.

One often overlooked area that can cause significant problems for an organization is nonprofit board succession planning.

While it is hard to think about, nonprofit organizations need to be prepared by engaging in succession planning for their key staff positions.

Conducting a thorough nonprofit risk assessment can help each organization understand the potential risks and put plans in place to reduce that risk.

Board training is crucial to the health of a nonprofit organization. As the leaders of the organization, a well-informed board of directors sets the foundation for all aspects of the organization.

Nonprofits may need to file paperwork for tax exemptions at three different levels: federal, state, and county.

But as with any establishment or event that serves alcohol, there are rules to follow and required licensing to obtain. As you plan your events, don’t get complacent about these rules or think they don’t apply to you, as it can create significant risk for your organization and your board members.

For organizations who are classified as 501(c)(3) tax-exempt organizations, there are restrictions on how money can be spent.

Insurance is all about assessing risk and mitigating the risk to your organization should any issues arise.

With more than 100,000 private foundations throughout the United States, it is vital for both—private foundations (grantors) and nonprofit organizations (grantees)—to understand the legal requirements encompassing their charitable relationship.

When setting up a nonprofit organization, it can be tempting to use an online legal service to complete your paperwork. However, based on recent client feedback and experiences, caution should be exercised in using these platforms.

Charitable organizations face heightened scrutiny around usage of organizational funds. Both private foundations and 501(c)(3) tax-exempt entities are subject to many regulations detailing such usage. One major prohibition is self-dealing, which means that organizational funds may not directly or indirectly benefit a disqualified person. Self-dealing can result in both the disqualified person and charitable organization facing sanctions from the IRS including penalties and excise taxes.

At Nonprofit Solutions, we love the excitement and passion that people have as they start a new nonprofit. People who are inspired to start a charity have a mission they want to accomplish and are excited to get started. We want all nonprofits to have a solid foundation to stand on — one that will allow them to accomplish their goals without running into problems or legal challenges.

Nonprofit and for-profit organizations often work together for the good of the community, but it’s important to understand the guidelines surrounding nonprofit and for-profit interactions to reduce risk to both entities.

Correctly filing this information is the responsibility of a nonprofit’s leader and board. So, while it may be your CPA who prepares and submits the paperwork, they are only as good as the information you provide them. That’s why it’s critical for nonprofit leaders and boards to communicate with your CPA about not only the numbers, but also the mission and governance of the organization.

As we come up on two years of living in a pandemic environment, nonprofits have been and continue to be impacted in many ways. One recent development is in court rulings related to business continuity insurance and vaccine mandates, but nonprofits also see continued impact on programming and fundraising.

Most grant applications require submitting a budget that then must be followed for the duration of the grant. If there are changes to the budget after a grant has been awarded, an organization needs to give official notification and receive approval before funds are spent

For many nonprofits, grants are a major source of funding. Grants are a means for the federal government to fund ideas and projects that provide public services and stimulate the economy. Oftentimes, nonprofits get excited at the funding possibilities and forget that grants come with the responsibility of adhering to the grant guidelines and reporting on how the money is spent. Unfortunately, the consequences of not following the requirements of the grant create significant risk for the nonprofit.

Nonprofits have become the second highest target of cybersecurity attacks with hackers attempting to gain access to nonprofit databases every 39 seconds, according to the 2021 Cybersecurity Guide for Nonprofit Organizations. Attackers have recognized that many organizations lack secure networks and organizational protocols, which makes nonprofits a significant target for gaining access to donor and client data.

Several years ago, the IRS estimated that 37% of the 1023EZ forms that were filed contained errors. These errors often went unchallenged, and sometimes an organization (or their legal counsel) would find the error and correct it in hindsight. Now, the IRS increasingly calls to verify information and request documentation when processing the application.