If your nonprofit has been active for many years, it probably has experienced significant change — it may even have drifted from its initial mission. There are many possible reasons for this. Perhaps the underlying issues your organization addresses have evolved or you've decided there are more pressing issues that deserve your attention.
Or maybe a larger funding base or new supporters have encouraged you to think bigger and expand your mission's scope. It's possible that other nonprofits in your community have folded and you've assumed responsibility for their clients.
It's common, even healthy, for long-running nonprofits to experience these changes. However, you can't let your mission drift too far without formalizing the shift. Otherwise, you might risk your organization's tax-exempt status. If you've been dragging your feet, now's the time to act. Analyze Your Position
The first step in the mission-changing process is to determine whether you need to rewrite your mission statement. In some cases, the answer is obvious. For example, if your charity's primary focus is helping World War II veterans, your client base is rapidly dwindling. Your options are pretty straightforward: Change your mission — perhaps to assist veterans of more recent conflicts — or terminate operations altogether.
At other times, the decision isn't as clear-cut. Your board should take a long, hard look at where your organization has been and where it's heading. Members should ask, for example, whether the services you currently provide are still needed and, if your mission has drifted, whether it's now focusing on what you consider the most critical issues. Depending on its conclusions, the board may decide to expand, contract or modify your nonprofit's existing mission.
Retain Your Exempt Status
Fortunately, it's generally easy for 501(c)(3) organizations to make changes to their mission statements without significant disruption. You just need to make sure your new mission qualifies as tax-exempt. Most organizations formed as 501(c)(3)s continue under that umbrella.
Assuming your exempt status won't change, your board should develop a new mission statement following procedures similar to the ones used at inception. It's important for the statement to be descriptive, but not so descriptive that it limits your organization or prevents it from growing. Once the board approves the new mission statement, your bylaws and Articles of Incorporation should be amended.
Generally, the rules for making these amendments will have been written into the existing bylaws. Your board can protect itself by giving adequate notice of any board meeting where potential bylaw amendments will be discussed. Unless otherwise stated, bylaws may be amended by a vote of at least a two-thirds majority. Make sure that the outcome is recorded in the board minutes.
Get the Word Out
Although you can notify the IRS immediately about a change in your organization's mission or bylaws, there's no legal requirement to do so. You can wait until you file your annual Form 990. The IRS will contact you if it has any questions.
However, you shouldn't delay notifying donors and grantmakers. In general, nonprofits must use donations for the purpose specified by the donor. If you've accepted a large donation intended for a program that's discontinued after you change your mission, contact the donor immediately. After you explain the change, this supporter may allow you to use the donation for another purpose consistent with your new mission. If not, you'll need to return the funds promptly.
To get the word out to the public, use your website, newsletter and social media accounts. Large nonprofits with wide regional or national appeals generally distribute a formal press release. Depending on the scope of the mission change, smaller nonprofits may want to contact local media outlets. Finally, review all supporter, client and public communications to ensure they reflect your new mission statement.
Find Fresh Approaches
Once you've changed your mission and communicated the change to stakeholders, be sure to monitor your nonprofit's programs and initiatives to ensure they reflect the updated focus. Even if your organization has been moving in a new direction for some time, you may have retained old ways of thinking.
Your nonprofit's growth and development depend on you finding fresh approaches to old and emerging challenges. Please contact us if you need assistance on ensuring the continuation of your tax-exempt status as your nonprofit changes and grows.