5 Nonprofit Myths You Need To Leave in 2018

Do you remember getting in trouble for telling a “little white lie” while growing up? Well, a few white lies and myths are floating around regarding nonprofit organizations that we want to do away with, starting today. Here are five nonprofit myths you need to leave in 2018. 

5 Nonprofit Myths You Need To Leave in 2018

1) Form 990 only has to be filed every 3 years

Tax-exempt organizations are required to file Form 990 tax returns annually. If an organization fails to file IRS Form 990 for three consecutive years, their tax-exempt status will be revoked. 

2) My organization used all our donations for the year and has no money left. There is no way we can be penalized for failing to file

Myth! IRS penalties are calculated based on the gross receipts of an organization, not its income. For this reason, organizations must file a Form 990 [annually] regardless of the amount of money that remains after the organization’s tax year has ended. 

3) Nonprofits only report substantial contributions on IRS Form 990

Too easy, right? A tax-exempt organization filing IRS Form 990 must report all donations. You will also need to include contribution details for donations $5,000 or more.

4) All small nonprofits can file Form 990-N

Private foundations must file a Form 990-PF regardless of their size or gross receipts. To learn more about IRS Form 990-PF, click here.

5) Nonprofits focus on big donors, not small ones

Lies, lies, and more lies. Nonprofit organizations are thankful for any donation they receive! As a nonprofit leader, you know how hard it is to muster up funds to adequately impact your community.

Although large donors are great and help sustain the work of your organization, be sure to also focus on those that make smaller donations to keep a good “cushion” of donors.

The Truth Sets You Free

As you lead your organization into the second half of 2018 leave these nonprofit myths behind and walk in truth. Don’t forget to keep detailed financial records and documents so you can be prepared to file your organization’s Form 990 at the end of your tax year.

ExpressTaxExempt offers a simplified e-filing process to handle your annual 990 tax filings and takes pride in keeping nonprofits compliant with the IRS. If you have questions or concerns, please contact the experienced team of experts located in historic Rock Hill, SC. We are available by phone, live chat, and email in both English and Spanish for your convenience. Click here to contact us today! 

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Are You Making These 5 Crowdfunding Mistakes?

Back in the day, fundraising was usually a face-to-face, spoken word kind of venture. But in the digital age, things have changed.

In order to maintain competitive fundraising, you need to look towards the Internet! But with great crowdfunding comes great responsibility.

I mean, there are certain rules, drawbacks, and benefits to Kickstarter, IndieGoGo, and GoFundMe. But no matter what, there are mistakes you can make on every crowdfunding site.

Your Campaign Is Not Clearly Defined

Don’t use a crowdfunding campaign for general fundraising.

Instead, focus your crowdfunding to a specific project, and how it will inspire donors to be a part of it.

Also, a specific project will have a smaller goal ($10k is a lot more palatable than $100k).

You Have No Mass-Market Appeal

Be realistic. You’re a big supporter of your cause, but the Average Joe isn’t.

If you do your market research, you can find the broadest appeal for your project. Research allows you to target your fundraising efforts.

You Have No Dedicated Resources

After you research, you need to make sure you have the capabilities to manage a big campaign.

If you don’t have a dedicated marketing professional on your team, you need to split the duties of a marketer between your current staff.

Also, you need to spend a little to earn a little in most situations, so make sure you have a budget that accounts for marketing.

You Don't Have a Plan

With proper resources, a real plan comes together.

Every plan has a before, a during, and an after. Start by setting goals you plan to meet, metrics you will measure with, and a time frame for all of this to occur.

With prepared content and continuous outreach, you can build relationships with your new donors even after your campaign ends.

You Have No Existing Donor Network

In order for your campaign to succeed, you need a relationship with your existing donors. First of all, they’re passionate about your cause.

Second, they have friends and family to share your project with. New donors are more likely to give if their loved ones have vetted the cause already.

Once you have your crowdfunding road-map in order, you can implement your plan!

With a solid crowdfunding campaign, your project is sure to be successful.

And it’s never too early to start planning your tax exempt return—once all these donations roll in, use the awesome recordkeeping features of ExpressTaxExempt to import donations. If you have any issues e-filing your 990 form, contact our support team at 704.839.2321.

Are you making these crowdfunding mistakes?

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End of Year Tax Tips For Nonprofit Organizations

I had the chance to sit down with the Express990 crew to discus what is most important to be aware of at the end of the year. Now, they had a lot of tips, but a few really stood out. So to kick of this important series, End of Year Tax Tips, we start with Yearly renawal of state articles of Incorporation. 

Yearly renew of state Articles of Incorporation.

All nonprofits must renew their articles of incorporation with their respective state(s) each year. If you only solicit charitable contributions locally, then you are only required to register your non-profit in that one state. If you intend to solicit charitable contributions nationally, you will have to register in 39 states and the District of Columbia before you can solicit within their jurisdiction.

Another Express990 crew member was on the phone with a Nonprofit Organization (NPO) and was asked a question about intellectual property. Now i'm not one to eavesdrop, but this question seemed really important. So I listened in on  the answer, and it was just perfect. Here is exactly what was said...

​Can a NPO generate money through intellectual property?

Consider intellectual property as public radio, public, television, or even the National Geographic Society, they are organizations that sell or lease their intellectual property to make a profit. This same method can use used with art groups, educational organizations, and other organizations that develop their own intellectual property for sale to others.

​If the sale of that intellectual property furthers the charitable exempt purpose of the organization, then the sales do not generate unrelated business income; regardless of the amount. However, if the material sold is unrelated to the charitable organization exempt status, this would generate unrelated taxable business income.

And too much "unrelated" business income can cost an organization its exempt status.

So even though this is an extremely busy time for nonprofit organizations, keep in mind the tips and reminders for the end of the year. You don't want to be late, or risk losing your tax exempt status. And don't forget to file your 990. If you miss filing your 990 for three consecutive years, you will automatically lose your tax exempt status. Express 990 supports e-filing of the 990-N (e-postcard) and the 990-EZ. We even have an app the file the 990-N so you can get that baby to the IRS no matter where you are. If you have any questions about filing Form 990, don't hesitate to give us a call at 704-839-2321 or send us an email: support@expresstaxexempt.com 

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Filing Tips for Form 990-PF

Before we get to the filing tips, let's demystify IRS Form 990-PF. This form is the information return U.S. private foundations file with the Internal Revenue Service. This public document provides fiscal data for the foundation, names of trustees and officers, application information, and a complete grants list. 

The IRS Form 990-PF may be the only source where one will find complete grants lists for smaller and mid-sized foundations. Larger foundations often issue annual reports, which provide descriptions of the grants awarded during the year for which the return is filed, and many have web sites. 

When filing the 990-PF, the IRS is ever so kind to provide these helpful filing tips based on common errors:

Complete Schedule B (Form 990, 990-EZ, or 990-PF). All organizations must complete and attach Schedule B or certify the organization is not required to attach Schedule B by checking the box in Line 2, Form 990-PF.

Part XV, line 3 must be completed if Part I, Line 25 has an amount. Be sure to state the purpose of the grant or contribution. If the foundation only makes contributions to pre-selected charitable organizations and does not accept unsolicited applications for funds, check the box on line 2, Part XV.

Complete Part XV, lines 2a through 2d, if the foundation had assets of $5,000 or more at any time during the year, unless the box in Part XV, line 2 is checked.

Be sure to complete all required Parts. Enter amounts in all applicable lines. For Parts or lines that do not  apply, enter "N/A" (not applicable). Answer "Yes", "No" or "N/A" to each question.

Complete Part II, Balance Sheets. Foundations with total assets of $5,000 or more at any time during the year must complete all of columns (A), (B), and (C). Foundations with total assets less than $5,000 at all times during the year must complete all of columns (A) and (B) and only line 16 of column (C).

Complete Part XV, Supplementary Information. Part XV must be completed if the foundation had assets of $5,000 or more at any time during the year.

Sign The Return. An officer of the organization must sign the return. An officer is the president, vice president, treasurer, assistant treasurer, chief accounting officer, corporate officer or tax officer. If the return is filed by a trust, it must be signed by the authorized trustee or trustees.

Complete Part X. All domestic foundations, foreign foundations claiming status as a private operating foundation, and private operating foundations described in 4942(j)(3) or 4942(j)(5) must complete Part X.

Reminder: protect personal information.  Do not include unnecessary personal identifying information because the IRS is required to disclose approved exemption applications and information returns, exempt organizations should not include Social Security numbers on these forms. Documents subject to disclosure include attachments filed with the form, and correspondence with the IRS about the filing.

You want to make sure you do not leave any question blank, for Pats or lines that do not apply simply enter "N/A". For more filing help you can visit  IRS.gov. To know more about the Form 990-PF and how to e-file your return to the IRS, visit Express990.com 

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