The first board meeting of a new nonprofit

Once the state files your articles of incorporation, the corporation exists, but it has no rules, no officers and no authority for anyone to open a bank account. The organizational meeting fixes that. It is the first official meeting of the board of directors, or in some states of the incorporators, who then elect the first board.

State law decides who calls the meeting, how much notice is needed and whether the same actions can be taken by written consent instead of a meeting. Rules vary by state, so check your nonprofit corporation statute. The business itself is much the same everywhere.

Before the meeting

Gather and circulate:

• The state-filed articles of incorporation (keep the certified copy for Form 1023).
• Draft bylaws.
• A draft conflict of interest policy.
• A draft set of resolutions and an agenda.
• A rough first-year budget and program plan.

Send drafts a week ahead so directors can read them. Decisions are better, and the minutes are easier to write, when people arrive prepared.

A sample agenda

1. Call to order; confirm quorum; appoint a temporary secretary to take minutes.
2. Accept the filed articles of incorporation and ratify the incorporator's actions.
3. Elect or confirm the initial directors, if the incorporator has not already done so.
4. Adopt the bylaws.
5. Elect officers.
6. Adopt a conflict of interest policy and collect disclosure statements.
7. Choose the fiscal year.
8. Authorize the EIN application.
9. Authorize a bank account and set signing authority.
10. Authorize the application for tax exemption and payment of the user fee.
11. Authorize state registrations and tax exemption applications.
12. Address reimbursement of startup expenses.
13. Adopt other policies, or schedule them for a later meeting.
14. Set the next meeting; adjourn.

The key resolutions

Adopt the bylaws

A simple resolution: "Resolved, that the bylaws presented to this meeting are adopted as the bylaws of the corporation, and the secretary is directed to keep a copy with the corporate records." Note any changes made at the meeting in the minutes so the adopted version is clear.

Elect officers

Elect the officers your bylaws provide for, typically a president or chair, a secretary and a treasurer. Record who was elected and the length of each term.

Adopt a conflict of interest policy

The Form 1023 instructions include a sample conflict of interest policy as Appendix A. Adopting a policy is not required to obtain exemption, but the application asks about it, and Form 990 later asks whether you had a written policy at year end and how you monitor compliance. Have each director sign an annual disclosure. See our conflict of interest policy guide.

Choose the fiscal year

Your fiscal year, which the IRS calls your tax year or annual accounting period, is the 12-month period your books and returns cover. A calendar year ends December 31; a fiscal year ends on the last day of any other month. Pick the end month that fits your program cycle, such as June 30 for an organization tied to the school year. Use the same month in your bylaws, on Form SS-4 line 12 and on Form 1023, which tells you to check your bylaws for consistency.

Authorize the EIN application

Authorize a named officer to apply for an employer identification number. The IRS asks for a responsible party, an individual who controls the organization's funds and assets; for a tax-exempt organization it is generally the principal officer. Apply only after the articles are filed. Our EIN guide covers the application line by line.

Open a bank account

Banks typically ask for the filed articles, the EIN and a board resolution naming who may sign. Many boards require two signatures or two approvals above an amount the board sets. Keep the organization's money separate from any founder's personal account from the first day.

Authorize the exemption application

Authorize an officer to prepare and file Form 1023 or Form 1023-EZ and to pay the IRS user fee through Pay.gov. The Form 1023 vs. 1023-EZ guide helps you decide which applies. Note the 27-month window: filing within 27 months from the end of the month you were formed generally makes an approved exemption effective from formation.

Reimburse startup expenses carefully

Founders often pay filing fees out of pocket. The board may approve reimbursement of documented, reasonable expenses. Record the amounts and receipts in the minutes, and have the director being reimbursed abstain. Paying insiders more than fair value is the kind of inurement the 501(c)(3) rules forbid.

Other policies

The IRS encourages boards to consider policies on executive compensation, investments, fundraising, document retention, whistleblower claims and documenting governance decisions. Form 990 asks about several of them. Adopt what you need now and calendar the rest.

Writing the minutes

Minutes are the official record of what the board decided, not a transcript. Include:

• Date, time, place or remote format, and who attended.
• That a quorum was present.
• Each motion, who made it if you wish, and the result of the vote.
• Any abstentions or recusals for conflicts.
• Documents adopted, attached or identified by title and date.

Have the secretary sign the minutes and the board approve them at the next meeting. Form 990 asks whether the organization contemporaneously documented meetings of its governing body; the instructions treat documentation as contemporaneous if done by the later of the next meeting or 60 days after the meeting. The IRS recommends keeping board minutes permanently, along with your articles, bylaws and determination letter. Our recordkeeping guide covers the rest.

501Nonprofit.com is a private company, not the IRS. This page is general information, not legal or tax advice for your organization. Example organizations and figures are hypothetical.