32 Association Management After four decades of founding associations, serving on non-profit boards, and designing and facilitating countless association meetings, I’ve witnessed my fair share of mistakes associations make. Some are well-known and documented behaviors, such as micromanagement, poor internal and external communications, neglecting leadership succession planning, etc., and I won’t cover them here. Instead here are three less-common mistakes made by associations, all with the warning “Don’t do that!” 1. Missing or Late 990 Filings Don’t do that! More importantly, be suspicious of any non-profit that doesn’t file timely tax returns. When associations ask me to work with them, one of the first things I do is to check out their 990 tax returns on Candid’s Guidestar, the IRS, or ProPublica. 990s provide a wealth of useful information about tax-exempt organizations. The majority of non-profits file their returns on time, with the 990 typically appearing on the above sites within one to two (at most) years. For example, as I write this in January 2025, a 2023 990, filed in May 2024 for one of the associations I founded is listed on ProPublica, and Guidestar, but isn’t yet posted on the IRS website. Tip: If you want a more recent 990, many non-profits post them on their website. A red flag goes up when I discover two or more missing 990s. Why? Because I know only three reasons why 990s aren’t posted in a timely fashion: 1. New non-profits sometimes take a while to realize they need to file 990s, or they struggle to provide the information their accountant needs to file. (Yes, I’ve seen this happen!) Regardless, if you’re working with a new organization you may want to be cautious. 2. Occasionally, tax preparers for non-profits are behind on their work and file late or request a six-month extension. Again, this can be a warning sign that not all is well. 3. The non-profit is up to no good. When I see several years of returns missing, alarm bells go off. A textbook example of this occurred in 2020. Within 30 minutes of hearing that a non-profit had purchased a college campus in my hometown, it became obvious that the organization had an opaque financial past. When I confronted the CEO about his non-profit’s missing tax returns he repeatedly changed the subject. The campus trustees ignored my warnings. It was only after a year of costly mayhem that the FBI arrested the CEO for stealing money from another non-profit to buy the campus! He subsequently went to prison. Here’s the whole sordid story. The IRS won’t protect you from shady non-profits Unfortunately, the IRS does a terrible job reviewing and acting on non-profit filings or non-filings. The IRS can charge penalties for late filings, but, as far as I know, rarely does. Tax-exempt organizations have to fail to file a 990 for three consecutive years before their non-profit status is revoked. And it’s easy for delinquent organizations to get their tax-exempt status reinstated. So, don’t rely on the IRS to police shady non-profits effectively. (Exhibit A: The Donald J. Trump Foundation.) And don’t raise suspicions about your non-profit’s finances and activities. File your 990s on time! Associations— DON’T DO THAT! By Adrian Segar
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