Running a Nonprofit Right.

File your Form 990 every single year

This is the one that ends nonprofits. Miss your IRS filing three years in a row and your tax-exempt status is automatically revoked — no warning letter, no appeal. Which 990 you file depends on your size:

• Form 990-N (the "e-Postcard") — if your gross receipts are normally $50,000 or less. It's a few online questions, free.
• Form 990-EZ — gross receipts under $200,000 and assets under $500,000.
• Form 990 (full) — gross receipts $200,000+ or assets $500,000+.

It's due the 15th day of the 5th month after your fiscal year ends — May 15 if you run on the calendar year. The 990 is also public: funders, donors, and watchdog sites read it. Treat it as a yearly report card, not just a tax chore.

Give receipts that actually hold up

If your receipt is wrong, your donor loses their deduction — and word travels. Two thresholds to burn into memory:

• $250 or more (single gift): you must give a written acknowledgment with your org's name, the date, the amount, and a line stating whether the donor got any goods or services in return (and their value) — or that they received nothing but your thanks. A canceled check is not enough at this level. The donor needs it before they file their taxes.
• $75 quid pro quo (they gave money and got something back — a dinner, a ticket): you must give a written disclosure with a good-faith value of what they received, so they know the deductible portion. Example: someone pays $100 for a gala seat worth $40 — only $60 is deductible, and you have to say so. Skipping this carries an IRS penalty.

Donated goods, vehicles & equipment

Noncash gifts (a truck, laptops, supplies) have their own rules — and a key one: you describe what you received, the donor assigns the value, never the other way around.

• Over $500: the donor files Form 8283 with their taxes. You just acknowledge the item and date.
• Over $5,000: the donor needs a qualified appraisal, and you sign Form 8283, Section B — that signature only confirms you received the item, not that you agree with the value.
• If you sell or dispose of a donated item worth over $5,000 within 3 years, you must file Form 8282 (unless you used it for your mission, or sold a piece for $500 or less).

Never let money flow to insiders

The fastest way to lose everything is private inurement — the org's money or assets benefiting an insider (founder, board member, family). The IRS treats this as a cardinal sin. The guardrails:

• Reasonable compensation only. You can be paid for real work, but the pay has to match what similar roles earn elsewhere. Document it: have the independent board members approve salaries using outside comparables, and record the vote in the minutes.
• Excess-benefit penalties are personal. If an insider takes more than fair value, the IRS can hit that person with an excise tax of 25% — rising to 200% if it's not paid back — plus a penalty on the board members who approved it.
• Recuse on conflicts. When a decision touches a board member or their relative, they disclose it and step out of the vote. Write the recusal into the minutes.

Restricted vs. unrestricted funds

When a donor or grant says money is for a specific purpose (a housing program, a specific build), that's a restricted gift — you're legally bound to use it only for that, and you must track it separately and report it on your 990. Spending restricted money on something else is a serious breach. Unrestricted gifts you can use wherever the mission needs them most. Grant money is almost always restricted — keep clean books that show every restricted dollar went where it was promised.

Your state filings

• Illinois Attorney General — Form AG990-IL, filed annually with a copy of your federal 990, due within 6 months of your fiscal year-end. Keep your Charitable Trust registration current.
• Illinois Secretary of State annual report — about $10, due before your incorporation anniversary month. Miss it and the state can dissolve you.

Get your property-tax exemption

If your nonprofit owns property used for the charitable mission (a shelter, program housing), you may not have to pay property tax on it — but it's not automatic just because you're a 501(c)(3). You apply with Form PTAX-300 through your county Board of Review, and the Illinois Department of Revenue makes the final call. The property must be both owned by the nonprofit and actually used for the exempt purpose — vacant or rented-for-profit property usually doesn't qualify. On the properties you hold for a housing program, this exemption can save real money every year, so it's worth filing for properly.

Good governance is what makes you fundable

Every habit above isn't just compliance — it's what a funder checks before trusting you with a grant. Keep these tight:

• Board that actually meets — real meetings, real minutes, a quorum.
• Conflict-of-interest policy that's followed, not just filed.
• Financial controls — separate the person who writes checks from the one who reconciles the bank; two signatures on big amounts.
• Your Determination Letter, 990s, and bylaws organized and ready — funders ask for all three.

The yearly rhythm

File your 990 (never skip — 3 misses = revoked) → receipt every donor right ($250 acknowledgment, $75 quid-pro-quo disclosure) → handle in-kind gifts by the 8283/8282 rules → keep all money flowing to the mission, never to insiders → track restricted funds separately → file AG990-IL + the state report → maintain your property-tax exemption → run a real board with real records. Do this every year and your 501(c)(3) stays healthy, legal, and fundable.

Note: General educational information for 2026; thresholds and rules change, and insider/related-party and property-tax situations get complicated fast. For compensation of insiders, related-party leases, or anything involving significant money, have a nonprofit attorney or CPA review it. Confirm current details on IRS.gov, the Illinois Attorney General's charitable site, and your county assessor.