A cohort of nonprofit organizations on Chicago’s West Side have recently signed on to take the 30-day “Compliance Challenge.”
The program was developed by Valerie F. Leonard to help nonprofits increase their fundraising capacity by ensuring they are current with all the necessary filings at the state and federal levels within 30 days.
This will remove one of the many barriers to fundraising, freeing organizations to focus more on the day-to-day activities of running programs and services.
Leonard, an expert in community and organizational development, cited the need for organizations to step back and review their nonprofit filings.
“I work with organizations on a number of issues, including strategic planning, financial management and board development,” she said. “What I found, is, no matter what issue I’m hired to address, all roads lead to compliance. Organizations – large and small – have challenges navigating the requirements of state and federal reporting for nonprofits.”
Between 2010 and 2014, over 25,000 Illinois nonprofits lost their tax-exempt status for failure to file the 990 federal tax form for three consecutive years. About 43 percent of the state’s nonprofits were impacted.
Over 8,900 of those organizations were in Chicago. Nationwide, 40 percent f the nation’s 1.4 million nonprofits lost tax-exempt status during the same period.
Some organizations that have lost tax-exempt status have been able have it reinstated after paying taxes, penalties and interest and submitting applications to the IRS. Given the costs and time involved to have tax-exempt status reinstated, most impacted organizations decide to close their doors.
Paul Norrington, vice president of the K-Town Historic District, signed up for the 30-Day compliance hallenge to do a reality check for his organization.
“There are so many people in our communities who fight every day to make our lives better. Many of them form or join organizations to make a bigger difference,” Norrington said. “Unfortunately, too many of those organizations fail because they don’t understand the ‘business’ of nonprofits. These workshops are very helpful for organizations that want to address those issues.”
The challenge is a series of four intensive workshops that cover a number of issues, including what to do if your organization’s tax-exempt status is revoked; a review of the reporting requirements for federal and state regulating agencies; an overview of the role of the community, foundations, the nonprofits and GuideStar in maintaining nonprofit compliance; the limits of nonprofits’ involvement in political campaigns and lobbying efforts; and the relationships between maintaining compliance, board governance and effective fundraising.
The workshops are held on Wednesdays, from 10 to 11:30 am at BUILD Inc., 5100 W. Harrison St.
The last of the two workshops will be held Oct. 15 and 22. The cost of each workshop is $25 in advance and $30 at the door. Organizations that complete the 30-day challenge will receive certificates.