Shelter’s Edge

Guest blogger Adam Liebling, ASPCA’s Grants Director, is here to provide tips that can help with your grantwriting to the ASPCA and other funders. Today he explains how to ensure your tax-exempt status is in good standing.

You’re a 501(c)(3) nonprofit, right?

Are you sure?

Last summer, the IRS revoked over 275,000 organizations’ tax-exempt status. Any nonprofit that hadn’t filed their annual information return (Form 990, 990-EZ or 990-N) to the IRS for three consecutive years automatically lost their status, regardless of the good work they do. The IRS continues to revoke statuses on a regular basis for this reason.

I can’t begin to tell you how common this story is: An executive director assumed the accountant submitted the Form 990 each year to the IRS, but they hadn’t. The charity continued doing its important work, oblivious that their nonprofit status was revoked.

As a result, donations to the charity actually couldn’t be tax deductions for their donors. The organization suddenly became ineligible for grants from foundations, who typically make grants only to 501(c)(3)s. Red flags are raised, grantmakers and donors become concerned. Oh, and the organization may have to start paying federal income taxes, excise taxes and other penalties!

Have I panicked you? Luckily, there are a couple of easy ways to make sure your organization is still in good standing. You can search for your organization on the IRS’ revocation list here.

But even better is checking your organization on GuideStar.

GuideStar serves as a central repository of nonprofit information. It provides easy-to-read information about charities to donors, funders and the general public. This information includes past 990s, audited financial statements and information about your board, key staff and programs. GuideStar also pulls information from the various IRS databases – if the IRS revokes your status, it will appear on GuideStar!

GuideStar’s mission is to encourage transparency in the nonprofit world, and they offer incentives for organizations to log in and update their information each year. As a grantmaker, I highly recommend that every nonprofit organization visit their page at least annually to ensure that their information is updated, complete and accurate.

And it never hurts to make sure that your organization, which may be outstanding and upstanding, is also in good standing with the IRS!

Got questions for Adam? Share them in the comment box or email grants@aspca.org.

Related links
“Grantseeking: The Four Don’ts You Should Do”
ASPCA Grants
ASPCA Interactive Grants Map

Tags: Adam Liebling, Fundraising, Grants

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