Most small nonprofit troubles don't start with bad intentions. They start with nobody knowing which forms need to be filed, whose name should be on the bank account, or what "meeting minutes" actually means in a legal sense.
This guide covers the administrative foundation every small nonprofit needs — the things that protect your tax-exempt status, keep your finances clean, and make sure the organization can survive a leadership change. Each section links to a dedicated guide with the full detail.
1. Your EIN: The Starting Point for Everything
An EIN (Employer Identification Number) is a 9-digit number issued by the IRS that serves as your organization's tax ID. You need it to open a bank account, file your annual tax return, and accept donations through most platforms.
If your organization doesn't have an EIN, get one before anything else. Apply for free at IRS.gov — most applications are processed immediately online. Store the EIN somewhere durable and accessible to whoever holds the treasurer role. A single lost EIN has derailed more nonprofit transitions than any other paperwork problem.
2. The 990-N: Your Annual IRS Filing
If your nonprofit has gross receipts under $50,000 per year, you are required to file the IRS Form 990-N — also called the "e-Postcard" — every year. It is free to file, takes about 10 minutes, and requires nothing more than confirming your organization still exists.
Missing three consecutive years triggers automatic revocation of your tax-exempt status. There is no warning from the IRS before this happens.
Most small clubs and community organizations have no idea this filing exists. The 990-N was introduced in 2007, and organizations that were operating before then were never notified. The only defense is knowing it exists and putting it on the calendar every year.
How to File the 990-N — Step-by-Step Guide
3. Your Bank Account: Dedicated, Not Personal
Your organization's money must be in an account held in the organization's name — not a personal account "temporarily." There is no such thing as temporary when it comes to nonprofit finances.
You will need your EIN, a copy of your bylaws, and a board resolution authorizing the account. Bring at least two officers to the appointment as authorized signers. A single-signer account is a liability: if that person becomes unavailable, the account is frozen.
Set up two-signature requirements on checks above a dollar threshold (your bylaws probably already require this — you just need the bank to enforce it). Add online banking access for at least two officers, not just the treasurer.
How to Open a Nonprofit Bank Account — What to Bring and What to Avoid
4. Meeting Minutes: The Legal Record of What Your Board Decides
Meeting minutes are not a transcript of the conversation. They are a legal record of what was decided. If your organization ever faces a dispute about whether the board authorized a purchase, approved a budget, or voted on a bylaw change, the minutes are the evidence.
Every set of minutes must document: who was present (and whether quorum was met), every motion with the name of the person who made it and the person who seconded it, how the vote went, and what was decided. Personal comments, general discussion, and anything that didn't result in a formal vote do not belong in the minutes.
Draft minutes should be distributed within 48 to 72 hours and formally approved at the next meeting.
How to Write Nonprofit Meeting Minutes — What to Include and What to Leave Out
5. The Treasurer Transition: The Riskiest Moment in Any Club's Year
More organizational problems originate in a bad treasurer handoff than from any other single cause. Bank access left unresolved. EINs lost. 990-N filings missed for two years because nobody told the new person it existed. Receipts handed over in a box.
The incoming treasurer needs: bank access transferred in person before the outgoing treasurer leaves, all financial login credentials and passwords, three years of financial records (ideally organized), contact information for your accountant or attorney if you have one, and confirmation that 990-N filings are current.
The outgoing treasurer needs to do one more thing: update the bank signature card. This is the most commonly skipped step, and the one that causes the most problems.
The Nonprofit Treasurer Transition Checklist
6. Bylaws: The Rules Your Organization Agreed to Follow
Your bylaws are the governing document that defines how your organization makes decisions. They specify officer titles and terms, quorum requirements for votes, how elections work, and what happens when someone needs to be removed. Most small nonprofits adopted bylaws when they formed and haven't looked at them since.
This matters for two reasons. First, your bylaws may contain requirements you're not following — two-signature check requirements, term limits, required annual meetings. Ignoring your own bylaws is a governance problem that can affect your standing as a tax-exempt organization. Second, when a dispute arises, the bylaws are the tie-breaker. If they're out of date or unclear, you have no tie-breaker.
Review your bylaws at least every three years. Update them when the rules no longer match how your organization actually operates.
How to Update Your Nonprofit Bylaws
7. Insurance: What You Need Before Something Goes Wrong
Small nonprofits often skip insurance because it feels like an expense the organization can't justify. The math changes the first time a volunteer is injured at an event, a member's equipment is damaged on org property, or someone claims the organization is liable for something that happened at a club meeting.
General liability insurance is the starting point. Directors and officers (D&O) coverage protects board members personally. Many events require the venue to be named as an additional insured, which requires a policy to begin with.
Some national membership organizations (Lions International, for example) include liability coverage as part of chapter membership. Check what your parent organization provides before assuming you have nothing.
What Insurance Does a Small Nonprofit Need?
8. Handling Cash: The One Fundraiser Rule That Prevents Almost Every Problem
At any event where cash changes hands — 50/50 raffles, ticket sales, bingo nights, fish fry entry fees — two people should count the money together. Every time. Before any cash leaves the event.
One-person cash handling is an invitation to theft allegations, even when no theft has occurred. It is also an invitation to bookkeeping disputes when the numbers don't match three weeks later. Two people counting together, writing down the total and signing it, is the only standard that protects both the organization and the volunteers handling the money.
How to Handle Cash Donations and Fundraiser Proceeds Properly
The Short Version
The administrative foundation for any small nonprofit:
- EIN obtained and stored somewhere the next treasurer will find it
- 990-N filed every year, on the calendar, with a backup person who knows it exists
- Bank account in the organization's name, two authorized signers minimum
- Meeting minutes recorded for every board meeting, filed and approved
- Treasurer transition handled in person with documented bank access transfer
- Bylaws reviewed and current
- Insurance in place before your next event
- Cash always counted by two people together
Most of this takes one afternoon to set up correctly. The organizations that skip it spend years paying the cost of not doing it.
If your organization is still collecting donations through cash or Venmo, Potluck handles online donation processing with no platform fees — and keeps the records organized so your next treasurer doesn't start from scratch. Free to get started.