Easy Steps To Protect Your Virginia Nonprofit and Keep Your Nonprofit Compliant

Last Updated: September 28, 2023 By TRUiC Team

If you are starting a 501(c)(3) nonprofit in Virginia, you have come to the right place. After following the easy steps for Virginia nonprofit formation, follow this guide to help keep your Virginia nonprofit compliant and protected.

In this guide we cover:

How to Protect Your Virginia Nonprofit
How to Keep Your Virginia Nonprofit Compliant

How to Protect Your Virginia 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 Virginia Nonprofit Compliant

Maintain A Virginia Registered Agent

Nonprofits that have incorporated are required to maintain a registered agent with an office address in Virginia.

If the agent or the office address changes, you must fill out Form SCC635/834 online or request a copy be mailed to you.

NOTE: Failure to do so may result in termination of the corporation.

File Required Periodic Reports

Every year the Virginia State Corporation Commission will send a notice to the registered office with instructions on when the annual report is due.

You have the option to file the annual report online if there have been no changes to the directors or officer information on record. You may also request a form be mailed to you.

NOTE: Failure to file a requested report may result in the termination of the corporation.

Determine Virginia Business Permits and Licenses

As a nonprofit in the state of Virginia, your organization will not need a general business license.

When you access Virginia Tax Nonprofit Online, you can easily print off a copy of your sales and use tax certificate.

To read more about taxes, catering, and to access contact details applicable to Virginia nonprofits, access the Virginia Tax website.

Fundraising

Any nonprofit who will be soliciting charitable contributions will need to register with the Virginia Department of Agriculture and Consumer Services.

You will need to submit the following:

Form 102
Articles of Incorporation
Bylaws
Current Form 990
A list of officers, directors and principal executive officer
A copy of each contract with professional solicitors
A copy of the IRS 501(c)(3) determination letter

To:

Virginia Department of Agriculture and Consumer Services
P.O. Box 536
Richmond, VA 23218-0526

Information: (804) 786-1343

Website: www.vdacs.virginia.gov

Employees

If your organization will have employees you must register with Virginia Tax for employer withholding and unemployment insurance taxes.

For more information you can contact:

Virginia Department of Taxation
Office of Customer Services
P.O. Box 1115
Richmond, VA 23218-1115

Information: (804) 367-8037

Website: www.tax.virginia.gov

Public Inspection Rules for all 501(c)(3) Organizations

All 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.

FAQ:

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 Virginia 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.