Charitable Organization Annual Report Form (Minnesota Attorney General - Charities Division)

"The Charitable Solicitation Act states that a Charitable Organization Annual Report Form must be filed with the Attorney General by the 15th day of the 7th month after the close of the organization's fiscal year. An organization must also include a copy of IRS Form 990 and an audited financial statement, if applicable. The filing fees are $25 and should be mailed with the annual report form to: State of Minnesota, Office of the Attorney General, Charities Unit, Ste 1200, NCL Tower, 445 Minnesota St., St. Paul, MN 55101."
Charitable Organization Annual Report Form

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charitable organization registration statement (MINNESOTA ATTORNEY GENERAL Charities division)

"The Charitable Solicitation Act, Chapter 309 of the Minnesota Statues, states that nonprofits must register as a charity with the Attorney General’s Office, Charities Division. An organizations does not need to register only if it meets one of the following three conditions:

1. does not hire staff or a professional fundraiser and does not plan to receive more than $25,000 in total contributions;

2. is a purely religious organization; or

3. is a private foundation that does not solicit contributions more than 100 persons during a fiscal year.

An organization must register with the Attorney General before soliciting contributions. Do so by  filing a Charitable Organization Registration Statement with a a copy of the organization's articles of incorporation, IRS determination letter, and most recent financial statement.  The filing fees are $25.  Mail the Statement, attachments, and fee to: State of Minnesota, Office of the Attorney General, Charities Division, Ste 1200 NCL Tower, 445 Minnesota St., St. Paul, MN 55101."

Charitable Organization Registration Statement

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IRS Form 990 - Return of Organization Exempt from

Income Tax

IRS FORM 990-EZ - Short Form Return of Organization Exempt from Income Tax

Even though a nonprofit organization may be tax exempt, it must file an annual tax return with the Internal Revenue Service. Generally, charities with more than $100,000 in gross revenues and more than $250,000 in total assets must file IRS Form 990; smaller charities may file the IRS Form 990-EZ Form.

This is the most detailed and most misunderstood filing for nonprofits. It is the most complete documentation of an organization’s financial history and is often used to hold the organization accountable for its past actions and future decisions. Recent rulings by the Internal Revenue Service state that nonprofit organizations must make their Form 990 and applications for tax-exempt status widely accessible and available to anyone who requests.

There are no filing fees but severe penalties apply for filing late or failing to file. IRS Form 990 should be mailed to: Internal Revenue Service, Ogden, UT 84201-0027.
 IRS Form 990 - Return of Organization Exempt from Income Tax

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IRS Form 990-EZ - Short Form Return of Organization Exempt from Income Tax

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Sample Completed IRS Form 990 (Minnesota Council of Nonprofits)

This is a copy of the Minnesota Council of Nonprofit's most recent IRS Form 990 as an example of a completed form.
MCN's IRS Form 990

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Sample Conflict of Interest and Disclosure of Certain Interests Policy (Charities Review Council of Minnesota)

"Philosophy: A well managed nonprofit organization should have a policy that addresses conflicts of interest of its directors, officers and key staff. Conflict of interest policies help to ensure that no person benefits inappropriately from any transactions in which the organization is involved.

Standard: The organization addresses director, officer, and key staff conflicts of interest pursuant to a written policy that prohibits the interested party from approving or voting on the conflicted transaction and requires full disclosure of all material facts to the appropriate decision makers."
Conflict of Interest and Disclosure of Certain Interests Policy

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Sample Conflict of Interest Policy (Minnesota Attorney General - Charities Division)

"The Attorney General's Office offers this Sample Conflict of Interest Policy for nonprofits to consider when developing policies to govern their operations and the conduct of board members, officers, directors and employees. The policies are offered as guides, and are not meant to prescribe the exact manner that nonprofits, officers, directors or employees must act in all situations. The policies are based upon the policies adopted by Allina and Medica in connection with the Attorney General's recent compliance review of those organizations. These policies are not to be construed as legal advice in any way."
Sample Conflict of Interest Policy

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Sample Ethics Policy (Minnesota Attorney General - Charities Division)

"The Attorney General's Office offers this Sample Ethics Policy for nonprofits to consider when developing policies to govern their operations and the conduct of board members, officers, directors and employees. The policies are offered as guides, and are not meant to prescribe the exact manner that nonprofits, officers, directors or employees must act in all situations. The policies are based upon the policies adopted by Allina and Medica in connection with the Attorney General's recent compliance review of those organizations. These policies are not to be construed as legal advice in any way."
Sample Ethics Policy

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SAMPLE POLICY ON DISCONTINUING CONTACT UPON REQUEST (Charities Review Council of Minnesota)

"Philosophy: Appeals that are threatening or intimidating are inconsistent with the essential aspects of voluntary charitable giving.

Standard: Solicitations do not cause donors to feel threatened or intimidated. The charity maintains a written policy to discontinue contacting any person upon that person’s oral or written request directed to the charity, its professional fundraiser or other agent."
Sample Policy on Discontinuing Contact Upon Request

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Sample Policy Governing Retention of Outside Counsel (Minnesota Attorney General - Charities Division)

"The Attorney General's Office offers this Sample Policy Governing Retention of Outside Counsel for nonprofits to consider when developing policies to govern their operations and the conduct of board members, officers, directors and employees. The policies are offered as guides, and are not meant to prescribe the exact manner that nonprofits, officers, directors or employees must act in all situations. The policies are based upon the policies adopted by Allina and Medica in connection with the Attorney General's recent compliance review of those organizations. These policies are not to be construed as legal advice in any way."

Sample Policy Governing Retention of Outside Counsel

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DOCUMENT RETENTION POLICY

Similar to the whistleblower protections enacted, after Enron’s destruction of key documents, the federal government enacted laws to discourage such destruction. While the law does not require the adoption of a document retention policy, it is a recommended best practice. The Sarbanes-Oxley Act (SOX) requires boards to be aware of and accountable for the acts of an organization. Also, the adoption of a document retention policy sets guidelines and facilitates Directors’ fulfillment of the duty of care, establishes transparency and ensures compliance.

Legal Authority
It is a crime to intentionally or knowingly alter, destroy, conceal or falsify any record or document with intent to impede, obstruct, or influence a federal investigation or the administration of any other federal matter according to section 802 of SOX. 18 USCA 1519 (2009). Other state and federal laws, such as the Fair Labor Standards Act, require certain records to be retained for a certain period of time. Some states, such as California, have adopted nonprofit integrity statutes that set out specific document retention measures. In Minnesota, to date, there does not appear to be such a statute or legislation. However, statutes of limitations on various legal claims may provide meaningful guidance on retention length for documents.

990 Disclosure
The 990 in Part VI, Section B,

14 Does the organization have a written document retention and destruction policy?

A document retention policy generally sets out the length of time certain organizational physical and electronic documents must or should be retained, held in organizational files, and the manner of disposal of such documents. The adoption of this type of policy serves to provide notice to employees and Board of the types of documents to be retained and for how long. It also helps guard against preemptive destruction or inappropriate disposal ahead of an investigation.

Thinking through tailoring a Document Retention policy for your Organization
Generally, document retention policies contain a list of types of documents that an organization should retain and the length of time the organization should retain those documents. Policies specify who in the organization is responsible for retaining such documents, guidelines for electronic files and procedures for backup files, archiving documents and regular check-ups on system reliability.

This policy requires organizations to intentionally make several decisions surrounding which documents to include and the length of retention time. The documents and retention period identified below will vary for individual organizations.

• Section 1: Intent and Purpose
  • Some policies introduce document retention and destruction procedures with a statement of intent and purpose of the policy.
    • Ex. Purposes
      • “The organization takes seriously its obligations to preserve information related to litigation, audits, and investigations.” MSBA sample policy
      • “The purposes of this document retention policy are for organization to enhance compliance with Sarbanes-Oxley Act and to promote the proper treatment of corporate records of the Organization.” Winston & Strawn, LLP sample policy
• Section 2: Legal Holds
  • This section generally gives notice that Board chairs or presidents may issue legal holds. A legal hold requires suspension from any document destruction due to the reasonable likelihood of litigation, audits, government investigations, or similar proceedings. Generally, a legal hold specifies the type of documents that should not be destroyed even if scheduled for destruction.
• Section 3: Document List and Retention Time Period
  • This section outlines in list format:
    • the category of records and documents to be retained,
    • specific documents items, and
    • retention periods.
    • Some policies also require listing of where document is located or stored.
  • Categories of records or files and documents commonly retained include (PLEASE NOTE -- the following is an incomplete list of documents to retain, the following are only examples) :
    • Corporate records including
      • Foundational documents such as Articles of Incorporation and Bylaws
      • Governance and Board policies including corporate resolutions, board agendas and minutes, and conflict-of-interest disclosure forms, among others
    • Finance and Administration files including
      • Financial statements, payroll records, bank deposits and statements, invoices, sales records
      • Equipment files and maintenance records, contracts, general administrative and legal correspondence, donor records, and grant applications
    • Insurance Records including
      • Policies and claims made on policies, accident reports, OSHA safety reports and group disability records
    • Real Property records including
      • Real property deeds, leases (current and expired), mortgages and security agreements
    • Tax documents including
      • 501(c)(3) application – Form 1023, IRS Form 990s, charitable organization registration statements, exemption application
    • Human Resources documents including
      • Employee personnel files, retirement benefit plans, employee handbooks and training materials, employment applications
      • IRS Form I-9, tax withholding statements, payroll tax returns
    • Technology
      • Software licenses and support agreements
    • Other
      • Press releases and publicly filed documents
  • The retention period varies by type of document. Some documents, such as foundational documents should be retained permanently, other documents such as general correspondence may be retained for a certain number of years.
    • In determining retention periods, some considerations to keep in mind include:
      • Federal or state legal requirement to retain certain documents
      • Statutes of limitation for certain claims that may be brought against an organization by employees, third parties or the attorney general
      • IRS audit cycles
• Section 4: Electronic Documents and Records
  • This section outlines an organization’s procedures to retain electronic documents or correspondence. An organization may require that electronic documents be printed and stored with other physical files, or allow for electronic documents to be archived electronically with backup and recovery methods in place to prevent loss.
• Section 5: Emergency Planning
  • This section generally requires that records are stored in a safe, secure, and accessible manner.
• Section 6: Document Destruction
  • This section generally outlines who is responsible to overseeing document destruction process and mechanism for destruction.
  • Some policies also included an affirmative statement that requires suspension of any document destruction upon notice of an official investigation.
• Section 9: Compliance.
  • This section lays out possible consequences for non-compliance with the policy, including disciplinary actions, as well as, civil and criminal sanctions.
  • It also may call for periodic review of the policy with legal counsel and/or a certified public accountant.

Sample Document Retention Policies

• MSBA CLE, “Record Retention Policy”
• National Council of Nonprofits, “Document Destruction”
• Blue Avocado, “Model Document Retention Policy for Nonprofits”
• Winston & Strawn, LLP and DC Bar Pro Bono Program, “Document Retention Policies”

Additional Resources

• “Destruction, alteration, or falsification of records in Federal investigations and bankruptcy” 18 USCA 1519
• IRS, “Compliance Guide for 501(c)(3) Charities)"
• BoardSource, Independent Sector, “The Sarbanes-Oxley Act and Implications for Nonprofit Organizations”
• Hurwit&Associates, Nonprofit Law Resource Library, “Starting a Nonprofit Organization”

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