Part VI of the Form 990 is exclusively focused on whether the filing exempt organization is following the IRS’s governance best practices. In such regard, it is essential that the exempt organization be aware of these recommended best practices so as to mitigate their risk of attracting any sort of attention from the IRS or a state Attorney General. Notwithstanding the fact that these governance best practices promulgated by the Internal Revenue Service are not statutorily addressed, we believe that an exempt organization is “required” to comply with the best practices in order to best protect the exempt organization from unwanted attention from governmental authorities, charity watchdogs and members of the media.

That being said, we provide the following consulting services in the governance area:

  • As a standard operating procedure whenever we prepare an information tax return for an exempt organization (for example, Form 990, Form 990-PF, Form 990-T, state Forms), we offer, for no additional cost to our clients, to present such to their Board of Directors and/or Audit Committee and/or Finance Committee. During such presentation, we summarize the information tax return “hot buttons”, we identify any potential “red flags”, we explain the more complex portions of the information tax return and we respond to whatever questions the governing body has for us.
  • We have made countless presentations to exempt organization Boards of Directors to inform them of their required roles and responsibilities as an exempt organization Board member; for example,, one of our staple presentations is titled “What Your Charity Board Member Must Know”.
  • We have facilitated and participated in many exempt organization Board retreats to help the exempt organization improve their overall governance processes and procedures.
  • Regarding the Bylaws for an exempt organization, we have worked with many exempt organization clients regarding the updating and/or amending of their Bylaws in order to allow for better governance to be exercised by the Board of Directors of the exempt organization. For example, we have helped churches, animal rescue organizations, social services organizations, school booster clubs, supporting organizations, university auxiliaries, community foundations, etc. get their Bylaws more in compliance with how the organization is being governed.
  • We are very proactive in working with our exempt organization clients in drafting Form 990, Schedule O narratives regarding the governance of the exempt organization; for example, addressing the organization’s review of their Form 990, the implementation of certain policies and procedures, the undertaking of related party transactions, the compensating of the exempt organization’s executives and whether the exempt organization is satisfying their public disclosure obligations or not.
  • We are very focused upon working with our nonprofit clients in their implementation and monitoring of an effective conflict of interest policy, including the creation of a Conflicts Questionnaire and a Reasonable Efforts Questionnaire.
  • For a good number of our exempt organization clients, we have drafted and implemented Expense Reimbursement Policies that are quite beneficial in the avoiding of excess benefit transactions.