New Hampshire Supportive Housing Toolkit
Introduction Overview of Permanent Supportive Housing for Persons with Developmental Disabilities Exploration Development Housing Operations Supportive Services Other Living Expenses of Individuals Putting It All Together: Budgeting For The Individual Developing and Maintaining Your Nonprofit Tax-Exempt Entity Additional Resources Glossary |
A) Creating a New Hampshire Non-ProfitThe first step is to form a nonprofit corporation under state law. The laws governing New Hampshire non-profit corporations are published at RSA Chapter 292.[1]
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Linked document: Forming a NH Non-Profit Corporation 1) Identify Incorporators For the Corporate EntityIn New Hampshire, a nonprofit corporation must have at least five incorporators, each of whose name, signature and mailing address must appear on the formation document.
2) Select a Name For the Corporate EntityThe entity name must not be the same as, or likely to be confused with, the name of any other business entity on file with the New Hampshire Secretary of State. You can check for the names of existing entities on the Secretary of State’s website.[1] See also the Secretary’s Name Availability Guidelines.
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Linked document: Name Availability Guidelines - NH 2019 3) Prepare and File Articles of AgreementThe Secretary of State publishes a fillable PDF nonprofit Articles of Agreement form on its website[1] which you can use to create your New Hampshire nonprofit corporation.
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Linked document: Fillable PDF Articles of Agreement Note, however, that the Secretary of State’s website form will not require you to include information which the IRS will require you to have included when you later seek 501(c)(3) federal tax exempt status. If you intend to apply for tax exempt status as a charitable organization, you will need to include specific additional language in your articles, including:
For more information on IRS requirements for tax exemption, see IRS Publication 557, Tax-Exempt Status for Your Organization, available on the IRS website.[1] The Secretary’s articles of agreement form includes the minimal information needed to create a nonprofit corporation in New Hampshire:
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4) Prepare BylawsBylaws set forth the rules and procedures your corporation will follow for holding meetings, electing officers and directors, and addressing other corporate formalities. They do not need to be filed with the State. In New Hampshire, the initial bylaws of a nonprofit corporation must be adopted by a 2/3 majority vote of the signers of the articles of agreement.
Note that any New Hampshire nonprofit organization that will be applying to the IRS to be a 501(c)(3) organization or will solicit donations or distribute funds within the state is required to register with and report to the Attorney General, Charitable Trusts Unit on form NHCT-1. Linked document: Application For Registration - NHCT-1 5) Hold a Board of Directors MeetingThe initial board meeting is commonly referred to as the organizational meeting of the board. At this meeting, the incorporators should:
6) Keep a Binder of Corporate RecordsCreate a corporate records binder for your nonprofit to hold important documents such as articles of agreement, bylaws, and minutes of meetings. Ensure it is keep up to date and that more than one director knows where it is physically stored.
b) Seek Federal Tax ExemptionOnce your entity exists, to obtain federal tax-exempt status from the IRS, you will need to complete and file IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. This detailed form collects information about your organization, its history, finances, organizational structure, governance policies, operations, activities, and more. Smaller nonprofits - those with projected annual gross receipts of less than $50,000 and total assets of less than $250,000 - are eligible to use the streamlined 1023-EZ application, a simpler, shorter form completed online.
Note that a New Hampshire nonprofit that is granted 501(c)(3) tax-exempt status by the IRS must register with the New Hampshire Attorney General, Charitable Trusts Unit. Familiarize yourself with the nonprofit registration rules and requirements, New Hampshire Attorney General’s website for before you engage in any fundraising. c) Annual Corporate HousekeepingSchedule regular board meetings and keep reliable minutes. Develop a Conflict of Interest Policy and file an annual conflict of interest statement with the New Hampshire Director of Charitable Trusts. File an Annual Report with the New Hampshire Director of Charitable Trusts. File Form 990 with New Hampshire Director of Charitable Trusts and with the IRS. If the organization’s annual budget is under $25,000 a 990 is not required and form NHCT-2A should be substituted. If annual revenues exceed $500,000, additional requirements apply. The entity’s registration with the New Hampshire Secretary of State must be renewed every five years.
Linked document: NH Center For Nonprofits Webinar Linked document: NH Center For Nonprofits Checklist D) Board of Directors IssuesAll states require that corporations form a board of directors, hold at least one annual meeting, and maintain meeting minutes that document topics discussed and actions taken. State law makes the board responsible for the health of its organization, and directors owe legal obligations that underpin the board's corporate governance function.
1) Primary Legal Duties of Directors
2) Board Roles & ResponsibilitiesIt’s impossible to do a job well if you don’t know what the job is. A board must take the time to ensure that every member fully understands what’s expected of them, and then hold all members accountable when they get off track.
Linked document: Board Service Graphic Linked document: Board Responsibilities Checklist a) Consider Developing A Job Description For DirectorsNonprofit boards typically do best with internal oversight responsibilities and struggle most with external responsibilities, specifically fundraising, advocacy, and community-building and outreach.
Linked document: Sample Job Description 3) Board Governance Best Practicesa) MinutesMaintain accurate, contemporaneous minutes of all board meetings and of committee meetings for committees that are authorized to act on behalf of the board, such as an executive committee). See IRS Form 990, Part VI, Section A, line 8. The duty to record minutes should be the responsibility of one person. Written minutes of the prior meeting should be made available at the subsequent meeting and a vote should be taken approving their accuracy.
b) Conflicts of InterestAnnually review a written policy and complete a questionnaire about conflicts of interest. See IRS Form 990, Part VI, Section B, Line 12. Document in minutes of board meetings whenever the policy is invoked.
c) Executive CompensationThe board should review and approve the executive director’s compensation and benefits, and document how the board determined that the compensation is appropriate and not excessive. See IRS Form 990, Part VI, Section B, line 15.
d) IRS FilingsThe board should review a copy of the organization’s IRS Form 990 (Return of Organization Exempt From Income Tax) before it is filed. See IRS Form 990, Part VI, Section B, line 11. For smaller nonprofits that only file the Form 990-N, ensure the board knows about the annual filing requirement.
e) Public Transparency ObligationsMake available to the public the nonprofit’s three most recently filed annual returns with the IRS, as well as the nonprofit’s application for tax-exemption and related correspondence and attachments.
f) Contractual ObligationsIf the nonprofit will be engaging in a significant commitment, such as an agreement to purchase property, the board should review the contemplated action, including considering the governing mission of the organization and the financial repercussions. The minutes should record the board’s approval of such a transaction, as well as the steps the board took in reaching that approval. If the nonprofit engages in a joint venture, IRS Form 990 asks whether the nonprofit took steps to avoid prohibited private benefit. See IRS Form 990, Part VI, Section B, line 16.
Linked document: Sample Joint Venture Policy 4) Board Toolsa) DashboardsA dashboard is a periodic (typically monthly or quarterly) snapshot of certain important governance, management and oversight issues that can be viewed by the board in a straight-forward pictorial manner to describe and track each issue of concern, including the board’s goal or target regarding that concern, and compare its status now with what its status was six months ago. For example, the present status of a concern could be highlighted in color—green for “on target” yellow for “being off target” but not yet critical and red for “off target” and needs to be addressed.
The dashboard presents the board’s particular focus areas and their respective items in a summary manner not to exceed a couple of pages. It offers a handy way for board members to gauge progress on critical concerns at a glance and determine which issues are on track and which issues need to be discussed. A dashboard helps board members track progress and on its important issues and focus its own efforts. A Sample Dashboard
Potential Areas of Focus line items, with sample Targets based on Visions’ operations: Finance:
Program and Impacts:
Our greatest assets: Human resources
Board of Directors:
Oversight of building and growth plans:
Fundraising
Compliance and Risk Management
5) Board Growth and ChangeLinked document: Board Passages: Three Stages In A Nonprofit Board’s Lifecycle[1] A board should engage in periodic self-assessment. There are many tools available to do so, as well as consultants who can lead a board through a customized self-assessment. A nonprofit board should compare its own practices to benchmarks and then prioritize its own development accordingly.
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[1] Farmsteads for New England seeks balance on its board between those with business/financial competencies and those with human services expertise. As of this writing, they have three parents, an MD, a Special Ed teacher, and a business person. They would be happy to have a lawyer and more individuals of means serve on the board. Linked document: Self-assessment Tool Linked document: Tip-Sheet-Candid-Conversations-Board-Governance Finally, the board, leadership, and all critical staff should ensure they spread institutional knowledge and plan for succession.
The Visions Experience:
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