Empower Your Nonprofit with an Easy-to-Use Solution for Dealing with Change in the Workplace PowerPoint

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have you heard this saying before healthy things grow now granted it sounds a little cliche but for the most part it's true right if we're talking about businesses all but the smallest grow and evolve over time well that's true for non-profits too it may be changes in the business environment regulatory change or simply changes in what consumers want or need but what happens when an existing nonprofit is looking at something much bigger than just an evolution more like a complete change of purpose and mission that's what i want to talk about today so let's dig in [Music] hi i'm greg mcrae founder and ceo of foundation group and welcome to our 501c3 university channel where we break down nonprofit compliance and make it understandable changing purpose and mission now organically driven change it's normal in fact it would be strange if a non-profit didn't evolve with the times but it's something else altogether if a board is asking whether or not to change the organization's original mission can it even be done and if so how well the short answer is yes it can and the how depends a lot on the degree of change so let's take a look at a few scenarios the first example is an expansion of program scope scope creep in general it's pretty normal and it's usually a gradual increase in reach of service maybe you're adding new service areas or new beneficiaries but your core focus isn't really changing this is the most organic version of change and it may look something like this youth voices is a community-based children's performance choir that targets elementary aged kids and economically disadvantaged neighborhoods their current reach spans a three-county area and after several years of operation the non-profits activities they've grown in popularity and the executive director has been approached by another county school board to see if young voices could expand to include their district this is textbook organic expansion it's still within the original purpose that the irs approved of the organization to conduct expanding youth voices to reach other counties or even other parts of the country would not require the organization to seek irs approval of the expansion even if their original 501c3 application stated a three-county approach they're not locked into that that's just what was known at the time they applied so example one good to go scenario two involves adding new programs now this can be as organic as the one we just talked about over time situations change and healthy organizations adapt that evolution and adaptation can include new programs added to the original so let's look in on youth voices seven years down the road they are now serving a 10 county region and what was once six elementary schools is now 14 elementaries and four middle schools plans are in the works to add two high schools next year but here comes a new idea in working with children these past seven years the executive director and the board have continually seen that the majority of kids in the program are behind in grade level reading now the board chair proposed in a recent meeting that young voices explore the possibility of adding a tutoring program to their existing operations so if they do this how does that impact their 501c3 status can they just add tutoring programs without seeking irs approval well the most likely answer is yes and here's why when the irs grants 501c3 status it does so based on the fact that the nonprofit's activities satisfies one or more charitable purposes here's where you have to know what qualifies as charitable and in what category activities targeting children are broadly considered educational if they're designed to expand a child's knowledge or life experience so we're talking schools day cares arts groups sports it's a broad range in this situation youth voices is considered an educational charity the original program of music for kids is c3 qualifying as educational activity and tutoring is also an educational program so expanding to include that new program is squarely within the bounds of their 501c3 determination as an educational nonprofit so example number two good to go so what happens if you're looking to replace one program with another a great example of this is the well-known charity march of dimes march of dimes was originally founded by president franklin d roosevelt in 1938 known then as the national foundation for infantile paralysis the nonprofit was formed to fight the scourge of polio the foundation was a major funder of jonas salk who developed the polio vaccine effectively eliminating the disease from the u.s the march of dimes still exists today doesn't it after the eradication of polio march of dimes changed their purpose from a focus on polio to improving the health of mothers and babies primarily focusing on infant mortality but the mission still involves kids and health so even though a lot changed a lot stayed the same going back to our youth voices example what would happen if all the schools served by the nonprofit started their own choral programs and cut ties with youth voices could they simply do what march of dimes did and replace choral programs with the tutoring programs that answer is yes they can example number three good to go for a third time so we saved the head scratchiest for last what about a complete change of mission completely changing your mission isn't organic and it isn't evolutionary the reasons for the change may have been a long time coming but the decision to change is going to be abrupt and if that includes going from one purpose category to another it's probably going to be pretty disruptive too so how drastic are we talking let's use an extreme example to illustrate it might not be realistic but it gets the point across youth voices has now been in operation for 10 years they had an amazing run for the first seven years or so but the program has been in decline for the past three more and more of their partner schools well they've started their own music programs and now what was once 18 participating schools is back down to four and even in those it just really seems like the program has run its course the board decides it's either time to wind it all down or find another way to positively impact the community now they have discovered that the city-run animal shelters in their multi-county area are all overwhelmed and simply don't have the resources they need the board sees this as an opportunity to remain viable and changes its name from youth voices to second chances animal services the new program includes plans for building an animal shelter to help with the overflow affecting the county facilities seriously can they do that i mean isn't the irs going to come after them well happily the answer is most likely yet again yes they can do that and no the irs isn't gonna come after them now young voices now second chances will have to report this quite sizable change to the irs on their next form 990 filing they'll also most likely need to amend their name with the state but as long as they continue to function in an exclusively charitable manner they do not need special permission from anyone other than those legally permitted to vote on such matters namely the board and or the membership to approve what they're planning to do we can't wrap up this conversation without first addressing some exceptions first if a 501c3 is switching from being a public charity to a private foundation it's really simple just start filing form 990 pf and walleye you will be accommodated but if you're going from a private foundation to a public charity well then it's a much harder process and will take you five years to complete it yep i said five years we'll talk about that more in another video another exception is pretty rare but it happens and we've worked with dozens of them this is where a 501c something wants to become a 501c something else like a 501c3 that wants to convert to a 501c4 now the irs really doesn't have a set conversion path for this though we've managed to pull it off a few times in most instances it's actually a lot easier to form a new organization and transition activity from one to the other now that doesn't always work though especially if it's a 501c3 converting due to their assets being dedicated to a charitable purpose there's a lot to that and we'll save that for another video but that's it for now help us out and hit the like button subscribe if you haven't already we've got loads of great content and more on the way thanks for watching go serve your community [Music] you