Year-End Compliance Checklist: Is Your Organization Ready for the New Year?

Filing your Form 990 is one requirement. Being ready for it starts long before the return is due.

December is a good time to ask a question that has nothing to do with holiday events or next year's fundraising calendar: Does the paperwork behind our nonprofit still match the organization we actually operated this year?

A lot can change in twelve months. Board members leave. New officers step in. Programs expand. Contractors get hired. Donations come in. Policies sit untouched. Financial records fall behind.

Then filing season arrives — and suddenly everyone is trying to reconstruct the year. I would rather catch those gaps now.

1. Start With Your Board and Leadership Records

Your board roster should reflect who actually served during the year. Before year-end, confirm:

• Current officers and board members

• Titles and roles

• When someone joined or left

• Compensation, if applicable

• Major decisions that should be reflected in meeting minutes

Why it matters: Your annual filing may ask about leadership and governance, and your organizational records should support the information being reported. If your board changed during the year but your records still show last year's leadership, that is something to clean up before filing season.

2. Make Sure the Books Tell the Same Story

Can you look at your financial records and clearly see what came in, what went out, what programs used the money, and what the organization owns and owes?

If your books are several months behind, now is the time to get them current. If donors gave money for a specific purpose, make sure those restrictions are being tracked appropriately in your records. Your tax return should not be the first time anyone tries to understand what happened financially.

3. Review Payroll, Contractors, and Payments to People

Nonprofits sometimes focus so heavily on the mission that payments to people become an afterthought. Before year-end, review:

• Employees who were paid during the year

• Independent contractors and vendors

• Officer or director compensation

• Reimbursements

• Any payments that may require year-end reporting

If money went to a person, I want to know what it was for and how it was documented.

4. Compare Your Programs to What You Said You Would Do

Your nonprofit may have started the year doing one thing and ended it doing much more. Maybe you added a new program, expanded into another community, started charging for certain services, changed how funds are raised, or received a grant for a new activity. Those changes can matter.

I want leadership asking: Are we still operating the way our organizational documents and exempt purpose say we operate?

A new activity does not automatically mean there is a problem. But significant changes should not be invisible to the people responsible for the organization's compliance.

5. Look at Your Policies Before You Need Them

Do not wait until a conflict happens to discover that your conflict-of-interest policy has not been reviewed in years. Year-end is a good time to ask whether your organization's written policies still make sense.

• Conflict-of-interest policy

• Financial controls

• Reimbursement procedures

• Document retention

• Whistleblower procedures

• Gift acceptance

• Board governance procedures

• Internal SOPs