The goal of nonprofit organizations is to carry out socially beneficial charity, religious, educational, or other altruistic endeavors. A nonprofit might, however, experience periods of inactivity or dormancy. As a result, plenty of people ponder whether or not a nonprofit organization can go dormant. A nonprofit organization can indeed go dormant, to answer your query.
A dormant nonprofit is one that has not conducted any activities for a predetermined amount of time, typically longer than a year. Several factors, including a loss of money, a lack of volunteer support, or a change in leadership, might cause a nonprofit to go dormant. In such circumstances, the nonprofit might not be disbanded but might instead be regarded as inactive.
A nonprofit still has legal responsibilities to perform even if it is dormant. A nonprofit must continue to submit yearly reports to the state and keep its tax-exempt status with the IRS. If you don’t, you risk fines and losing your tax-exempt status.
A nonprofit must submit the necessary documentation to the IRS if it wishes to change its status. For instance, a nonprofit must submit Form 1024 to the IRS in order to modify its status from 501(c)(3) to 501(c)(4). A nonprofit must submit Form 990 to the IRS and the relevant state government if it wishes to dissolve.
In conclusion, even if a nonprofit is dormant, it still has to uphold its legal responsibilities. Even if their organizations aren’t actively engaging in philanthropic activities, nonprofit executives must make sure that they keep their groups in line with state and federal requirements. A nonprofit must submit the necessary papers to the IRS and state agencies in order to modify its status or disband.