Operating Effectively 201: Operating a Faith-Based Nonprofit

What You'll Learn

This skills course will build on the concepts you learned in Starting a Nonprofit 101 and 102. Here you will acquire a greater depth of knowledge about legal compliance, including what compliance requirements may apply to your organization. You will also develop the skills to identify your organization’s compliance requirements and to build the organizational tools to keep track of and complete necessary tasks in a timely manner.

Lesson 1

Toward a Spirituality of Compliance

Compliance can often seem tedious, but for a faith-based organization, compliance is an opportunity to offer up inconveniences and serve faithfully in all matters, great and small. An apostolate’s legal and tax compliance demonstrates its love of neighbor. While an apostolate’s noncompliance could harm the organization’s ability to operate or attract donors, the more spiritually significant concern is that such noncompliance could actually rise to the level of scandal, which could distract from – or even prevent – the witness of the apostolate and its staff or volunteers through whatever good work they do. Faithful completion of the most mundane tasks, even legal compliance, is the stuff of saints!

Lesson 2

Voting Requirements: Why They Matter

At first glance, the voting requirements in a nonprofit’s bylaws may not seem an exciting topic. Most nonprofits have not seriously considered their bylaws, perhaps because they have inherited old bylaws, copied the bylaws of another company, or even originated their bylaws from a quick internet search! If any of these scenarios applies to your organization, your organizations’ bylaws may include director voting requirements not tailor-made to your preferences or the specific needs of your organization. Taking just a few minutes to read and think through some key provisions within your bylaws may save you from major issues down the road.

Lesson 3

Creating a Compliance Calendar

Using a compliance calendar can minimize the risk of fines and penalties associated with missed or late filings and have a measurable impact on an Organization’s efficient functioning, financial bottom line, and reputation. An effective compliance calendar will identify:(1) key filing obligations, (2) important deadlines, and (3) the individual or parties responsible for preparing and submitting the filings.

Lesson 4

Nonprofit Spring Cleaning: Corporate Records

Complete and well-organized corporate records are important both for efficient organizational performance and for legal compliance. Without up-to-date and organized records, finding the answer to these questions might involve calling retired directors and executives and digging through old computers and archived email inboxes. Too much delay could jeopardize the organization’s ability to respond to funding opportunities and receive applicable exemptions.

Lesson 5

Compliance Alert: IRS Form 990 Filing Deadline Approaches

Most organizations must file the Internal Revenue Service (“IRS”) Form 990 or request an extension by May 15. Many organizations also have state tax filings, charitable registration forms, corporate annual reports, or some combination of these due on the same date.

Lesson 6

Nonprofit State and Federal Filing Requirements: Methods for Compliance, Consequences of Non-Compliance, and Steps for Reinstatement

Is your 501(c)(3) nonprofit complying with its regular filing requirements? Are you incurring penalties for late filing? Has your tax-exempt status been revoked? Read on for an overview of the filing requirements necessary to maintain or regain - a nonprofit’s tax-exempt status under federal law. Below is an overview of best practices for compliance, the consequences of non-compliance, and methods for reinstatement of both state and federal filing requirements if an organization has become non-compliant.

Lesson 7

Introduction to Volunteer Risk Management

‍A strategy for identifying and responding to volunteer risk management issues at Catholic nonprofit organizations. Volunteers are the cornerstone of many Catholic lay apostolates. Often volunteers have as much or more influence and responsibility as full-time employees. Unlike the formal hiring programs used with employees, most volunteer programs are informal, evolving organically according to the organization’s needs. Unfortunately, an approach which is too informal leaves the apostolate and its participants at high risk.

Lesson 8

When to Consider a Third Party Audit

In the same way that some private companies regularly carry out external audits, (audits performed by a third party, not someone affiliated with the company), religious organizations can also carry out external audits. As this post will demonstrate, there are times it may be wise for your organization to do so.

Lesson 9

Conflicts of Interest: Avoiding Common Mistakes

The directors of faith-based nonprofits have a duty of loyalty that requires them to put the organizations’ faith and mission ahead of personal interests, both in fact and in appearance. If the organization plans to enter a conflicted transaction, in which the organization will directly or indirectly compensate a person (such as a director or officer or a company owned by a director) who exercises authority or influence over the organization, special due diligence and approval is necessary. If the board does not conduct the required diligence, state and federal penalties may apply. These penalties include financial penalties, legal actions, and even the voidance of the transaction itself. Not all conflicted transactions are prohibited or improper, but all conflicted transactions must be carefully reviewed.

Lesson 10

Protecting Freedom of Speech Against De-Platforming

Many vendors include provisions in their contracts and user agreements empowering the vendor to unilaterally cut service to faith-based organizations based on subjectively assessed violations of ambiguous hate speech policies. Protect your organization by negotiating for provisions that provide reasonable protection for free speech and religious exercise. This resource gives sample language and a case study of an organization that successfully navigated this challenge.

Lesson 11

Lesson 12

Lesson 13

Lesson 14