Accountability & Transparency
NPCC offers a checklist of items that have emerged in the past several years as definite to-do’s for organizations that seek to increase their transparency and accountability. First, we begin with the Annual Filings required of most nonprofits.
Not all of the items under the Compliance Checklist portion are required by law; however, with the implementation of NYS's Nonprofit Revitalization Act later in July 2014, many will become required. We provide a link to sample forms that can be copied and modified to suit your organization. If you need help with your password, email kjones [at] npccny.org.
If you’ve already:
- obtained an EIN (employer identification number) from the IRS: www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online
- incorporated and registered with the New York State, Department of State: www.dos.state.ny.us or www.dos.ny.gov/corps/nfpcorp.html#certinc
- registered with NYS Attorney General (Form CHAR 410): www.charitiesnys.com or www.charitiesnys.com/charindex_new.jsp#filing
- applied for IRS 501(c)(3) tax exempt status (IRS Form 1023) and received your IRS Determination Letter or advanced ruling letter: www.irs.gov. All organizations that have gross receipts of $5,000 or more must receive an IRS Determination Letter.
- applied for NYS and local sales tax exemption: New York State Department of Taxation & Finance, Form ST-119.2: www.tax.ny.gov. If the organization owns real estate, it should apply for property tax exemption by filing the Exemption From Real Estate Taxation for Property for Property Owned by Nonprofit Organizations form available at www.nyc.gov/html/dof.
you must file:
- Federal: Organizations with annual gross receipts of less than $50,000 may file IRS Form 990-N. Those with gross receipts greater than $50,000 and less than $200,000 and total assets less than $500,000 must file Form 990-EZ or a complete Form 990; Organizations with gross receipts greater than $200,000 or total assets greater than $500,000 must file Form 990. Private foundations must file Form 990-PF. (Read more at www.npccny.org/info/gti11.htm and at www.irs.gov/charities/article/0,,id=184445,00.html.)
Organizations having $1,000 or more in income from activities unrelated to their tax exempt purpose (UBIT) must file Form 990 T. IRS forms and instructions are at www.irs.gov.
- State: All organizations must annually file a report, CHAR 500, with the NYS Attorney General. Forms and instructions for the Charities Bureau of the New York State Attorney General are at www.charitiesnys.com.
- Audit Requirements: Organizations with gross revenues greater than $250,000 must undergo a financial audit by an independent CPA. Those with revenues between $100,000 and $250,000 must file a CPA’s review report. Those with revenues below $100,000 are not required to retain a CPA, but must submit a financial report certified by its board with its CHAR 500 to the NYS AG’s office. These levels will increase as of July 1, 2014. See www.npccny.org/info/fi21.htm for more.
Employee Filings & Requirements for Organizations with Paid Employees
- Obtain an Employer Registration Number (ERN) from New York State for reporting unemployment insurance, withholding and wage data. ERN: Download Form NYS-100 from www.tax.ny.gov.
- Workers’ Compensation Insurance & Short Term Disability:
New York State law requires employers to provide short term disability coverage to employees. Many organizations obtain these coverages through the New York State Insurance Fund, although there are alternatives. The State Insurance Fund: www.nysif.com.
- Unemployment Insurance
Payments based on your gross payroll are remitted quarterly to the NYS Unemployment Insurance Division. Nonprofits are exempt from Federal Unemployment Tax. NYS Unemployment Insurance division: www.labor.state.ny.us/ui/employer.shtm
and secure or file:
- I-9’s: Employees must complete and submit Form I-9, Employment Eligibility Verification, within 3 days of employment to their employers. I-9s are not filed with the U.S. government. Employers are required to retain I-9s for up to 3 years. Go to US Citizenship & Immigration: www.uscis.gov
- W-2s and 1099s: Employers (or their payroll service) must provide W-2s for each employee and 1099s for independent contractors paid $600 or more in a calendar year. IRS Form 1096 correlates to 1099 information, and Form W-3, Transmittal of Wage and Tax Statements, covers W-2 data. IRS forms: www.irs.gov
- If you have payroll, you must remit Federal and FICA (employer and employee) withholding payments, and NYS/NYC withholdings. The filing frequency is based on the size of your payroll. A reputable payroll service provider can provide this service and will assume the liability for failure to pay withholdings.
[ ] Create an Audit Committee. The roles and responsibilities of an audit committee are outlined at www.npccny.org/info/fi20.htm.
[ ] By-Laws. Review by-laws or other comparable governance documents to ensure they are compliant with the requirements of the New York Not-for-Profit Corporation Law, as amended by the Revitalization Act. A checklist is at www.npccny.org/members_only/ByLawsChecklist.doc.
[ ] Adopt a Conflict of Interest Policy. NPCC has a memo outlining why a nonprofit organization should adopt a conflict of interest policy along with a template. It’s at www.npccny.org/members_only/Sample_Conflict_of_Interest_Policy.doc.
[ ] Adopt a Document Retention and Destruction Policy. NPCC has a sample at www.npccny.org/info/RecordsRetention.doc.
[ ] Adopt a Whistleblower Policy. NPCC has crafted a policy that can be adapted by an organization. Download it at www.npccny.org/members_only/Whistleblower_Policy.doc.
[ ] Adopt an Investment Policy. NPCC has three sample policies at www.npccny.org/databank.htm#3: 1) organizations that have endowment funds; 2) organizations that have investment assets but no endowment funds (and delegation to external agents is not permitted); 3) organizations that have investment assets but no endowment funds (and delegation to external agents is permitted).
- NPCC's checklist, The Things You Gotta' Do to Start a Nonprofit Organization, is at www.npccny.org/checklist.htm.
- Independent Sector’s website is at www.independentsector.org.
- National Council of Nonprofits: www.councilofnonprofits.org
- The Charities Bureau of New York State’s Attorney General website is at www.oag.state.ny.us/bureaus/charities/about.html.
- NPCC’s Information Databank has scores of articles on various governance and management topics at www.npccny.org/databank.htm.