If you are starting a 501(c)(3) nonprofit in Delaware, you have come to the right place. After following the easy steps for Delaware nonprofit formation, follow this guide to help keep your Delaware nonprofit compliant and protected.
In this guide we cover:
How to Protect Your Delaware Nonprofit
Get Business Insurance
As with any other business, there may be risks involved in running the nonprofit. Getting insurance for your nonprofit allows you to focus on your passion while minimizing your liability.
Here are some of the common types of insurance you may want to consider for your organization:
- General Liability Coverage
- Directors and Officers Coverage
- Social Service Professional Coverage
Your coverage needs will vary based on your organization and the work you do.
Properly Sign Legal Documents
There will be times when you will be signing a document on behalf of your nonprofit. It is important that these times are easily distinguishable from when you are signing a document as an individual. If a document isn’t properly signed, you might suddenly find yourself personally responsible for something the organization should have been liable for.
To avoid such confusion we recommend you and all the members of your organization follow the following format:
- The official name of your nonprofit
- Your signature
- Your full legal name
- Your position in the organization
How to Keep Your Delaware Nonprofit Compliant
Maintain A Delaware Registered Agent
Nonprofits that have incorporated are required to maintain a registered agent with an office address in Delaware. If the agent or the office address changes, you must file the Change of Agent form with the Division of Corporations to effect a change to the Certificate of Incorporation. This form can be mailed to the address found below:
Delaware Division of Corporations
401 Federal Street – Suite 4
Dover, DE 19901
NOTE: Failure to do so may result in termination of the corporation.
For more information, you can call the Division of Corporations at (302) 739-3073.
File Required Periodic Reports
All nonprofit organizations in the State of Delaware must file an annual report. It costs $25 to file this report and you can simply file your report online.
NOTE: Failure to file a requested report may result in the termination of the corporation.
Pay Your Delaware State Franchise Tax
Every exempt nonprofit corporation in Delaware is exempt from paying state franchise taxes.
Determine Delaware Business Permits and Licenses
When you complete your Delaware consolidated business and tax registration, you will automatically be registered for applicable Delaware business licenses.
If you will be running a charitable game (raffle, bingo, etc.), you will need to obtain a permit for each event. These permits can be obtained from the Delaware Board of Charitable Gaming.
As a nonprofit in the State of Delaware, you are not required to register or apply to solicit charitable contributions.
If your organization will have employees you must enter that information when you submit your consolidated business application to the State of Delaware. Again, this application can be mailed to the address found below:
Delaware Department of Revenue
P.O. Box 8750
Wilmington, DE 19899-8750
For more information, you can call the Division of Revenue at (302) 577-8205 or visit them at their website.
Public Inspection Rules for all 501(c)(3) Organizations
Organizations that have been granted the 501(c)(3) status are required to disclose the following documents to the public when requested:
- Annual returns for 3 years after the due date (this includes returns like Form 990, 990-EZ, 990-PF, and any Forms 990-T)
- All Form 990 Schedules (except portions of Schedule B), attachments and supporting documents.
- Application of exemption and all supporting documents such as Form 1023
- The official paperwork from the IRS that shows that your organization has tax-exempt status.
The following do NOT need to be shared with the public
- Portions of schedule B of Form 990/990-EZ that identify the contributors. (You only need to disclose the amount contributed and the nature of the contributions)
- Any unfavorable rulings such as an earlier denial of tax-exempt status.
- Any information the IRS has said you can withhold. This may include things like sensitive patents and trade secrets.
How long do I have to produce these documents if requested?
Ideally within the same day. If your organization doesn’t have an office or maintains limited hours during parts of the year, the information should be made available within two weeks.
Do I need to provide copies of the documents?
If someone asks for copies in person or in writing you must provide them with copies.
Can I charge for copies?
You can charge a reasonable amount for making copies of the documents requested.
NOTE: It may be easiest to have the documents available on your website so that anyone who requests copies can be sent to the site. This allows you to stay compliant without having to spend a lot of time dealing with document requests.
Annual Returns for Tax-Exempt Organizations
Most tax-exempt nonprofit organizations are required to file an annual return with the IRS (Check the list of exceptions).
Which form you should use to file the annual returns depends on the annual gross receipt amounts for your organization.
"Gross receipt" is defined by the IRS as “the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses”
- For gross receipts ≤$50,000 --- File 990-N
- Gross receipts <$200,000 and total assets <$500,000 --- File 990- EZ
- Gross receipts >$200,000 or Total assets >$500,000 --- File 990
For any questions, you can call the IRS at
- (800) 829-3676 (Form-related questions)
- (800) 829-1040 (General information)
When is form 990 due?
You have a little over 4 months after your taxable year comes to an end to file Form 990. It is due on the 15th day of the 5th month. So if your taxable year ends on Dec 31st, your form 990 is due on May 15th.
NOTE: If your organization fails to file form 990 for 3 consecutive years, it will automatically lose its tax-exempt status.
Report Unrelated Business Income
If your Delaware organization has a gross income of ≥$1000 from a trade or business that is not related to the stated purpose of the organization, then it must file Form 990-T to pay tax on that income.
If you expect to pay $500 or more for the year in taxes on unrelated business income, your organization must pay a quarterly estimated tax on the unrelated business income using Form 990-W.
State of Delaware Nonprofit Quicklinks
IRS - Information for Charities & Nonprofits
IRS - Required Provisions for Organizing Documents
IRS - 990 Series for Tax-Exempt Organizations
IRS - Applying for Tax-Exempt Status
IRS - 501(c)(3) Compliance Guide
Small Business Administration - License and Permits