Shutting down or dissolving a nonprofit requires meticulous attention to detail. Because a certain chain of events will need to occur in precisely the exact order. For example, you don’t want to shut down the corporation before filing the form 990 tax return for the organization.
Let your employees know about an impending closure. If possible, provide job counseling and severance pay.
Make sure that your clients are taken care of. Perhaps they can be referred to another nonprofit. Subscribers or members can be given refunds.
Let your donors know what is happening. Do this before they find out from the rumor mill or in the news.
Pay debts. Either pay your outstanding debts or work with your suppliers to settle those debts.
Document the life of your nonprofit. Write down what your nonprofit has done, its history, its research, knowledge gained. Give the documentation to a library or historical society. Pass it on to other nonprofits that might benefit from your experience.
Honor staff, board, and volunteers. Give them credit and thanks.
Hold a board meeting where the board voted to dissolve the organization. Record that decision in the board minutes.
Inventory all assets, such as money, furniture, web domains, property, mailing lists, etc. Then pass them on to another nonprofit, sell them and use the proceeds to pay your bills, or return them if appropriate.
File a formal intent to close with your state (usually the Secretary of State office).
Make certain to perform all due diligence as it relates to your accounting, particularly, with any grant accounting.
File all reporting requirements with grants received.
File a final Form 990 tax return with the IRS within 4 months and 15 days of the dissolution of your organization. Business & Financial Solutions can effortlessly assist clients with these services in any state. If you are looking to shut down your nonprofit organization, contact our firm so that this challenge may be met without complications. We can assist you with all reporting, accounting, and tax-related concerns with the dissolution of the non-profit.