The Nonprofit FAQ

We want to change the mission and work we do. How difficult is it to make such a change?

The program coordiator of a Florida nonprofit asked on May 26, 2006: I would like to ask someone out there for an answer to this dilemma. We are currently a 501C3 organization doing medical education conferences. We want to change the mission and work we do to assist children. How difficult is it to make such a change?? Is it legal? Do we have to re-file? Putnam Barber answered: You will need to answer this question with respect to three separate frameworks. 1. The state where you are incorporated (Florida?). You will need to look at your articles of incorporation to see what purposes are specified there. If the specified purposes encompass your new mission and activities, then no action is required; otherwise, you will need to follow your home state's laws and the procedures specified in your articles of incorporation and bylaws (if there are any) for amending your articles of incorporation. At the same time, you will want to look at other elements of your articles of incorporation and bylaws to bring them into alignment (if needed) with your new mission. It may be necessary for you to file the amended articles and bylaws with your home state's corporations authority; the answer to that question will depend on your home state's nonprofit corporation law. Obviously, you will need to make sure that your new activities are in fact a permitted purpose under your home state's nonprofit corporation statute. (If you are registered as a "foreign nonprofit corporation" in any other states because you have significant business activities there then you will need to look into notifying those states of the changes according to the procedure each requires.) 2. The IRS. You will need to notify the Internal Revenue Service of the changes in your purposes and activities. This is usually done by checking "yes" in items 76 and 77 on the form (they may have different numbers on Form 990-EZ used when total revenue is small) and attaching the required descriptions and copies. Item 76 asks about changes in activities; item 77 asks "Were any changes made in the organizing or governing documents but not reported to the IRS? If “Yes,” attach a conformed copy of the changes." A "conformed copy" is one that shows the original signatures (or is accompanied by a signed declaration by an officer that it matches the original in all respects) along with evidence that the original has been received and filed by the appropriate state official. You can examine a blank Form 990 on the IRS website at http://www.irs.gov/pub/irs-pdf/f990.pdf Usually, this notification is sufficient. It may happen, however, that when the IRS reviews your filing you will be asked further questions or required to file a new form 1023 (application for recognition as an exempt organization). Again, you will want to be sure your new activities are within the scope of the section 501(c)(3) list of exempt purposes; that's something you will want to consider carefully as you go through this process. If your organization is not required to file at all because revenue is normally less than $25,000, use the Form anyway and check the box at the top that says that, but complete items 76 and 77 as described above, sign and send the form. Put "n/a" on the financial lines but check no (or yes if need be) in answering all the questions and supply the names of officers and directors as required. (You should look at the checklist for a "complete" 990 in the Instructions for the Form.) 3. Charitable Solicitations Registration and Reporting. You will need to examine the registration(s) you have on file with state charitable solicitations officials and amend them as required to declare your new purposes. Answering the question whether you need to file (or refile) charitable solicitations registrations in one or more states depends on the nature of your solicitations (if any) and the states where they are conducted. The National Association of State Charitable Officials has a list of state officials with addresses and weblinks on its website at http://www.nasconet.org. More detailed information about filing requirements in each state can be found at http://www.multistatefiling.org. The Florida Association of Nonprofit Organizations (http://www.fano.org) may have more information you will find useful. There is a list of all state associations on the National Council of Nonprofit Associations website at http://www.ncna.org. You may also want to look at other Nonprofit FAQ items to explore this and other questions concerning nonprofits. Posted May 27, 2006 -- PB