The Foundation is a fully compliant 501(c)(3) non-profit to include charity registration in applicable states as required by law. In May 2022, its status as a tax-exempt organization was automatically revoked and then reinstated retroactively in January 2023. This information is publicly available on the IRS website.
Why did the Foundation lose its 501(c)(3) status?
The Foundation did not file its 990-tax returns in a timely manner. By default, if a nonprofit organization doesn’t file for three consecutive years, its 501(c)(3) status is automatically revoked by the IRS.
Why were the tax returns not filed?
Fundamentally, there was a lack of oversight by The Board to make sure that the tax returns were filed in a timely manner. Steps were immediately taken to ensure that appropriate governance was put in place to prevent this lack of oversight from happening again.
When was the Foundation informed that it lost its 501(c)(3) status?
The revocation took effect in May 2022, but The Board was not made aware until November 2022. The Foundation Board immediately hired a CPA to assist with the work needed to file the missing tax returns. In addition, the Foundation took advantage of the IRS option to request retroactive reinstatement of its 501(c)(3) status and it was granted in January 2023.
What will be done in the future to keep the Foundation compliant with the IRS?
The Board erred by asking a single person to take responsibility for the Foundation’s tax filings, then failed to oversee the process. There was an immediate restructure and governance processes were initiated to make sure that this doesn’t happen again.
Can you tell me more about the restructuring and governance improvements that were undertaken with the Foundation?
As a result of the events leading up to and following to the loss of our 501(c)3 status, and in accordance with declarations made in the reinstatement forms filed with the IRS, our past President/Treasurer stepped down from those leadership positions. In keeping with our bylaws, our Vice-President stepped up as Acting President/Vice-President with the full support of the board of directors. A full review was done of the Foundation financials and process improvements were implemented. A CPA specializing in nonprofit financials has been retained. Care is taken to provide access and oversight to all accounts and financial process by the executive committee members.
Further steps have been implemented to improve the organization’s workflow to make certain important business processes do not fall through the cracks. The board is committed to continue implementing nonprofit best practices for good governance and understands the importance of recruiting the skilled volunteer talent that will best serve the future of the Foundation and its mission.
How does this impact my donation to the Foundation during the revocation period?
All donations made in 2022 during the revocation period are tax-deductible as the Foundation’s 501(c)(3) status was restored retroactively.