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VIDEO Q&A for Subscribers: June 2025
Ben and Mike answer questions from subscribers about preparing to serve on a nonprofit Board of Directors, the pros and cons of group exemptions, mitigating auditor concerns about pledges receivable, and whether the rationale for a Board member's dissenting vote should be included in Board meeting minutes.
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TEMPLATE: Document Retention and Destruction Policy [SUBSCRIBERS-ONLY]
This Document Retention and Destruction Policy template is intended to help your nonprofit organization ensure compliance with the Sarbanes-Oxley Act and other applicable record-keeping laws, and to avoid inadvertent destruction of important organizational records. Unlike many other document retention and destruction policies (sometimes called “record retention policies”) that specify difficult-to-track holding periods (3 years, 7 years, 10 years, etc.) for specific categories of documents, this template uses a more flexible approach that aims to minimize administrative and operational burdens while addressing key compliance issues.
Video Podcast: Using Funding Pipeline Reports to Navigate Financial Disruptions
Ben and Mike discuss the challenges of planning in a period of financial instability and how funding pipeline reports can help nonprofit organizations document real-time information affecting funding plans, provide a framework for assessing the reliability of future funding sources, fill in gaps not covered by financial reports, and more.
Q&A #175 – Can a nonprofit organization’s 501(c)(3) tax-exempt status be revoked by executive order?
It is well-established that a nonprofit organization’s tax-exempt status cannot be revoked by the mere issuance of an executive order. Revocation generally requires an individualized examination by the IRS with a notice of determination and opportunities for organizations to appeal both within the IRS and in federal courts, subject to certain specific exceptions (such as automatic revocation for failure to file Forms 990 for 3 consecutive years).
Adding Spending Provisions to an Operating Reserve Policy
Virtually all nonprofit organizations aspire to accumulate operating reserves to help bridge short-term disruptions and funding gaps and to provide working capital for the future. What most people do not think about is how these operating reserves could be used or spent when the need arises. Misunderstandings can be avoided by making sure your organization’s operating reserve policy has provisions for the future allowable use (spending) of operating reserves.
VIDEO Q&A for Subscribers: May 2025
Ben and Mike answer questions from subscribers about the role of legal counsel in leading updates to an organization’s employee handbook, the best time to start planning for the end of an office lease, transitioning from fiscal sponsorship to becoming an independent 501(c)(3) nonprofit organization, and whether it’s a good idea to promote a staff bookkeeper or accountant to controller, director of finance, or CFO.
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TEMPLATE: Whistleblower Policy [SUBSCRIBERS-ONLY]
This Whistleblower Policy template is intended to help your nonprofit organization establish a process for Board members, staff, and others to report potential violations internally in good faith without fear of retaliation. This sample document includes basic language addressing the mechanism for reporting and investigating whistleblower claims, the prohibition on retaliation, and other provisions to help ensure compliance with the Sarbanes-Oxley Act and demonstrate your organization’s commitment to transparency, accountability, and good governance.
Video Podcast: Common Nonprofit Fiduciary Duty Issues
Ben and Mike discuss the fiduciary duties that apply to the Board of Directors of a nonprofit organization, with a focus on how to apply the duty of care, duty of loyalty, and duty of obedience to issues and examples that arise frequently for nonprofits, such as delegating matters to experts and committees, navigating conflicts of interest and serving on multiple Boards, the corporate opportunity doctrine, and more.
Q&A #174 – Are past due Forms 990-N required to be filed for retroactive reinstatement of tax-exempt status?
Internal Revenue Service (IRS) Revenue Procedure 2014-11 describes the process for reinstatement of tax-exempt status that has been automatically revoked for failure to file annual tax filings. Under this guidance, it is not entirely clear whether the Section 5 and Section 6 retroactive reinstatement processes require filing past due Forms 990-N. However, there are strong arguments that filing Forms 990-N for prior years should not be required under any of the retroactive reinstatement processes.
VIDEO Q&A for Subscribers: April 2025
Ben and Mike answer questions from subscribers about the potential consequences of having 501(c)(3) tax-exempt status revoked, whether a mid-year amendment to the budget should be made if an organization’s federal grants have been terminated, tax forms and disclosures required when hiring foreign contractors, and what to do when a project must be stopped in the middle of a capital campaign.
How to Prepare Your Nonprofit for a Bank Loan or Line of Credit
Nonprofit organizations often come up empty-handed and frustrated when their attempts to borrow funds or establish a line of credit from a bank hit multiple roadblocks. This can lead to delays and, at worst, being denied or outright blocked from starting the application process. Using a business-like approach to planning and having regular meetings with your bank representative is the best way to avoid these outcomes.
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TEMPLATE: Volunteer Services Agreement [SUBSCRIBERS-ONLY]
This template volunteer service agreement provides basic terms and conditions that are generally recommended for nonprofit organizations when using volunteer services. This sample document covers areas such as thanking the volunteer for their service, clarifying that compensation is not owed, waiver of liability / release language, confidentiality, use of the volunteer’s name, image, and likeness, intellectual property ownership, and more.
Video Podcast: The Purposes and Roles of the Audit Committee
Ben and Mike discuss why nonprofit organizations have audit committees, their traditional role throughout the annual audit process, the importance of the Board's perception of an audit committee's purposes, how the independence of the audit committee can serve nonprofits in expanded ways, and more.
Q&A #173 – Can a 501(c)(3) nonprofit organization convert to for-profit status?
In theory, there are ways for a 501(c)(3) public charity to transition to operating as a taxable for-profit business entity. However, this is a difficult process with many legal pitfalls, including the excess benefit transaction, inurement, and private benefit rules under federal tax law, and state laws governing nonprofit corporations and the use of funds received for charitable purposes.
VIDEO Q&A for Subscribers: March 2025
Ben and Mike answer questions from subscribers about record-keeping and document retention practices, using LLCs to limit liability risk in a fiscal sponsorship, disclosure of committee meeting minutes as part of the audit process, whether abstaining Board are counted for purposes of satisfying unanimous written consent procedures, and whether a quarterly Board meeting can be delayed into a subsequent quarter.