Nonprofit Management
You're the New Executive Director. These Are the 9 Documents to Demand in Week One.
August 12, 2026
The short answer: In your first week as a new executive director, ask for nine documents: the IRS determination letter, the last three Form 990s, the payroll tax filings with proof the deposits cleared, the most recent audit and its management letter, two years of board minutes, the restricted gift file, the bank signature cards, the insurance declarations page, and every contract with a termination clause. Those nine tell you what you actually inherited. The strategic plan, the rebrand and the overhead ratio can all wait ninety days.
Nobody hands a new executive director the bad news on day one. They hand you a strategic plan, a building tour, a stack of introductions, and a laptop with somebody else's password on a sticky note. The bad news arrives in month four, usually in an envelope, and by then it is yours.
That is not because anyone is hiding anything. It is because the people around you are proud of this place and want you to love it too, and because the person who knew where the soft spots were has already cleaned out their desk. The board hired you to lead. They are not going to open the drawer for you.
So open it yourself, in week one, while you still have the one thing a director never gets back: permission to ask a naive question about anything.
Here are the nine documents worth demanding before you do anything else, what each one actually tells you, and the four things everyone will press on you that can safely wait.
1. The IRS determination letter
This is the piece of paper saying the organization is what it says it is. Ask where the original lives. If three people give you three answers, that is your first finding, and it is a finding about the organization's memory rather than about the letter.
Then check the organization against the IRS Automatic Revocation of Exemption list, because exempt status can end without anyone doing anything. An organization that does not file its annual return for three consecutive years loses tax-exempt status automatically, effective on the original filing due date of the third return. The IRS is blunt about the consequences: the law prohibits the IRS from undoing a proper automatic revocation and does not provide for an appeal process, and a revoked organization is not eligible to receive tax-deductible contributions.
No warning letter arrives the week it happens. The status simply goes, and you find out when a major donor's advisor checks.
Ask: who filed our last three annual returns, and can I see the confirmations?
2. The last three Form 990s, read the way a stranger reads them
Your 990 is not an internal document. An exempt organization has to make its exemption application and its annual returns available for public inspection, and each return stays disclosable for three years from its due date or the date it was actually filed, whichever is later. A funder, a journalist or an unhappy former board member has already read yours. You should not be the last person in the conversation who has.
Read them for four things:
• The compensation table. Not to judge it. To know it, before someone asks you about it in public.
• Transactions with interested persons. Loans, leases and payments involving officers, directors or their family members. If your organization rents space from a board member's company, you want to learn that from the form and not from a rumor.
• The governance section, which asks whether the organization has a written conflict of interest policy, a written whistleblower policy, and a written document retention and destruction policy, and whether the completed return was provided to the governing body before it was filed.
• Anything the form claims that the file drawer cannot produce.
That last one is the real exercise. If the return says a policy exists, ask to see it. A 990 that says yes and a drawer that says nothing is a live problem, and the next one gets signed on your watch.
While you are in there, find out when the next one is due. The return is due by the 15th day of the 5th month after the end of the organization's accounting period, which for a calendar-year organization means May 15.
3. The payroll tax filings, and proof the deposits actually cleared
This is the one that can follow you home, so do not delegate it.
Filed and paid are two different verbs, and an organization under cash pressure can do the first without the second for longer than you would think. Money withheld from an employee's paycheck is held in trust for the government. It was never the organization's money.
When it does not get paid over, the IRS can assess the Trust Fund Recovery Penalty against a person rather than the organization. A responsible person is someone with the duty to perform and the power to direct the collecting, accounting and paying of those taxes, and among the people the IRS lists as potentially responsible is a member of a board of trustees of a nonprofit organization. The penalty equals the unpaid trust fund amount in full.
So ask for the filings and the bank records showing the deposits went through. Both. Then reconcile one quarter yourself, line by line, once. It will take an afternoon and it is the best afternoon you will spend that month.
If you find a gap, stop reading advice like this and get a lawyer who does this work. That is not a hedge, it is the correct next step.
4. The most recent audit, plus the management letter nobody photocopies
The audit report gets presented to the board with some ceremony. The management letter goes in a drawer, and the management letter is the interesting one. It is where the auditor writes what could not go in the opinion: the control weaknesses, the missing documentation, the one person who can both approve an invoice and pay it.
Read the current one, then read the prior year's, and note anything that appears in both. A finding repeated two years running is a finding nobody owns.
While you are there, settle whether the organization even needs a single audit. Under the current federal rules, an entity that expends $1,000,000 or more in federal awards during its fiscal year must have a single or program-specific audit for that year. That threshold was $750,000 until recently and the increase applies to fiscal years beginning on or after October 1, 2024. Two things follow. If your organization has been budgeting for an audit it no longer requires, that is real money you just found. If it crossed the line and nobody noticed, that is a different conversation and you want to be having it now.
5. Board minutes for the last two years
Read them for what was approved, and then read them again for what was discussed and never resolved.
Minutes are the only surviving record of promises made in a room. Look for your own compensation as approved, any indemnification of officers and directors, any commitment made to a donor or a funder, every executive session recorded with no detail, and any resignation that got exactly one line. A one-line resignation in the minutes is usually a paragraph in real life.
Then read your own offer letter against what the minutes say the board approved. Those two documents disagree more often than anyone expects, and it is far easier to fix in week one than in year two.
6. The restricted gift file
A restriction is not a donor's preference. It is a condition attached to money that has in many cases already been spent.
Ask for every grant agreement and every donor letter carrying a restriction, and then ask the harder question: can we show, fund by fund, that the money went where it was promised. Not the total. Per fund, with the expenses charged against it.
Restricted money quietly covering payroll in a hard month is the most common slow disaster in this sector, and it is almost always well intentioned. Somebody made the mortgage and meant to put it back. What makes it dangerous is that it does not look like anything until a funder asks for a report.
If your request for restricted fund balances takes two weeks to answer, you already have your answer.
7. The bank signature cards and everyone who can move money
Not the financial policy. The actual cards, plus the current administrator lists on the bank portal, the payment processor, the payroll system and every credit card.
A policy describes intent. A signature card describes power. Find out who can move money today, then find out which of them left in 2019 and never got removed. Include the person who can change where a payout is deposited, because that is the permission that matters most and the one nobody inventories.
This is a two-hour task with a same-week fix, which makes it the rare early win that is actually worth taking.
8. The insurance declarations page, especially directors and officers
Ask for the declarations page rather than a summary, and read the directors and officers policy first.
D&O coverage is usually written on a claims-made basis, meaning it responds to claims made while the policy is in force rather than to acts committed while it was in force. So the question that matters is whether the policy carries prior acts coverage and what the retroactive date is. A new director inheriting a policy with a recent retroactive date has no coverage for anything that happened before it, which is to say for the entire history you just started reading about.
While you have it open, check whether employment practices liability is included, since employment claims are the ones nonprofits actually see, and check the limits against what your largest event genuinely requires rather than what the venue's certificate asks for.
9. Every contract with a termination clause
Leases, the copier, the database, the payment processor, the auto-renewing software nobody remembers buying, the consultant on retainer, and any employment agreement carrying severance.
Build one page: vendor, annual cost, renewal date, notice period, who signed it. The notice period is the expensive column. A contract that renews automatically unless cancelled 90 days out has a real decision date three months earlier than the date printed on it, and that earlier date is the only point where you still have room to negotiate.
Most new directors build this page in month seven, immediately after missing a window.
The four things everyone will hand you, that can wait
The strategic plan. It is a record of the previous leader's priorities and the board's mood on the day it was adopted. It is worth reading in month three, when you can tell which parts were real commitments and which were the consultant's headings. Reading it in week one just tells you what you are expected to say.
The overhead ratio. Someone will show you a pie chart. In a joint open letter, the heads of the three organizations that built the modern rating systems, Jacob Harold of GuideStar, Ken Berger of Charity Navigator and Art Taylor of BBB Wise Giving Alliance, called the notion that overhead ratios are the sole basis for trusting a charity a false one, and pushed the sector toward judging results instead. When the people who publish the ratings tell you the ratio is a poor scorecard, you can stop optimizing for it in your first week.
The rebrand. It is the most tempting early move because it is visible, everyone has an opinion, and it produces something to show the board. It also fixes none of the nine things above, and it spends the goodwill you will want later.
The thirty-day quick win. Somebody will want you to announce something by day thirty. The pressure is real and it is worth naming out loud rather than absorbing. Announcing before you know what you inherited means you end up owning it twice, once as the person who said it and again as the person who has to unsay it.
When a document does not exist
Write that down as the finding, with the date you asked. "We could not locate the determination letter as of March 4" is a sentence that belongs in your notes and eventually in front of the board.
The temptation is to quietly reconstruct it yourself at nine at night, because you are new and do not want to look like you are pointing fingers. Resist that specific instinct. A gap you fix silently becomes a gap nobody knew existed, and you have just taught the organization that the system works, because it did, because you were awake.
How to ask without starting a war
Ask in writing, all nine at once, with a date. Do not ask for an audit of everything, which sounds like an accusation and produces a defensive fog. Ask for a specific list, and give a reason that is true: you are new and you need to know what you are responsible for.
Something close to this works:
"As part of getting up to speed, I would like copies of the following nine items by the end of next week. If any of them are hard to locate, that is genuinely useful for me to know too, so please tell me rather than spending your weekend on it."
That last clause does more work than the other nine items combined. It converts a missing document from somebody's personal failure into information, which is the only way you will ever hear about the real gaps.
Send the same list to your board chair at the same time. Not to escalate, but so that the request is visibly part of your onboarding rather than a private investigation of the staff.
A ninety-day shape
• Week one. Request all nine in writing. Separately, pull the administrator lists yourself from the bank, the processor and the payroll system.
• Weeks two to four. Read them. Meet the auditor and the bookkeeper separately, not together. Find the retroactive date on the D&O policy. Reconcile one quarter of payroll taxes and one restricted fund end to end, personally.
• Days thirty to sixty. Fix what is cheap. Signature cards, a renewals calendar, and the written policies your 990 already claims you have.
• Days sixty to ninety. Now read the strategic plan, and write the version that survives what you found.
None of this is the part of the job you took it for, and none of it will feel like leadership while you are doing it. Do it in week one anyway. The alternative is finding out in month four, when it has stopped being the last person's problem and started being yours.
Frequently asked questions
What should a new nonprofit executive director do in the first week?
Ask, in writing, for nine documents: the IRS determination letter, the last three Form 990s, payroll tax filings with proof of deposit, the most recent audit and its management letter, two years of board minutes, the restricted gift file, bank signature cards, the insurance declarations page, and every contract with a termination clause. Reading them is the work of weeks two through four.
Can a nonprofit board member or director be personally liable for unpaid payroll taxes?
Yes, it is possible. The IRS can assess the Trust Fund Recovery Penalty against a responsible person, defined as someone with the duty to perform and the power to direct the collecting, accounting and paying of trust fund taxes, and the IRS specifically lists a member of a board of trustees of a nonprofit organization among those who may qualify. The penalty equals the unpaid trust fund amount. If you suspect a gap, get legal advice rather than guessing.
How do I check whether our tax-exempt status is still valid?
Check the organization against the IRS Automatic Revocation of Exemption list. Exempt status is revoked automatically after three consecutive years without filing the required annual return, effective on the original due date of the third return, and there is no appeal process for a proper automatic revocation.
Does our nonprofit need an audit?
For federal awards, an entity that expends $1,000,000 or more in a fiscal year must have a single or program-specific audit. That threshold rose from $750,000 for fiscal years beginning on or after October 1, 2024. Separately, your state, your funders and your own bylaws may require an audit at lower levels, so check all three rather than only the federal rule.
What is a management letter and why does it matter more than the audit?
The management letter is the auditor's private note to leadership about control weaknesses and problems that did not rise to the level of the formal opinion. It usually names the specific things that could go wrong, which makes it far more useful to a new director than the audit report itself. Read two years of them and note anything repeated.
What if the previous director left no records?
Treat each missing item as a finding with a date, and report it rather than quietly reconstructing it. The IRS determination letter, filed 990s and state registrations can generally be recovered through the IRS and your state charity office. Internal memory, meaning why a fund was restricted or what a board actually promised, is the part that does not come back, which is why the board minutes and the restricted gift file are worth reading first.
Should I read the strategic plan first?
No. Read it around month three. In week one it tells you what you are expected to say rather than what is true, and you cannot yet tell which commitments in it were real.
Start here
If you are stepping into a director role and want the operational side laid out in one place, our free Nonprofit Operations Guide covers the systems side of the same ground: how the money, the donors, the volunteers and the reporting fit together, and what to fix first when they do not. No login required.
Nobody hands a new executive director the bad news on day one. They hand you a strategic plan, a building tour, a stack of introductions, and a laptop with somebody else's password on a sticky note. The bad news arrives in month four, usually in an envelope, and by then it is yours.
That is not because anyone is hiding anything. It is because the people around you are proud of this place and want you to love it too, and because the person who knew where the soft spots were has already cleaned out their desk. The board hired you to lead. They are not going to open the drawer for you.
So open it yourself, in week one, while you still have the one thing a director never gets back: permission to ask a naive question about anything.
Here are the nine documents worth demanding before you do anything else, what each one actually tells you, and the four things everyone will press on you that can safely wait.
1. The IRS determination letter
This is the piece of paper saying the organization is what it says it is. Ask where the original lives. If three people give you three answers, that is your first finding, and it is a finding about the organization's memory rather than about the letter.
Then check the organization against the IRS Automatic Revocation of Exemption list, because exempt status can end without anyone doing anything. An organization that does not file its annual return for three consecutive years loses tax-exempt status automatically, effective on the original filing due date of the third return. The IRS is blunt about the consequences: the law prohibits the IRS from undoing a proper automatic revocation and does not provide for an appeal process, and a revoked organization is not eligible to receive tax-deductible contributions.
No warning letter arrives the week it happens. The status simply goes, and you find out when a major donor's advisor checks.
Ask: who filed our last three annual returns, and can I see the confirmations?
2. The last three Form 990s, read the way a stranger reads them
Your 990 is not an internal document. An exempt organization has to make its exemption application and its annual returns available for public inspection, and each return stays disclosable for three years from its due date or the date it was actually filed, whichever is later. A funder, a journalist or an unhappy former board member has already read yours. You should not be the last person in the conversation who has.
Read them for four things:
• The compensation table. Not to judge it. To know it, before someone asks you about it in public.
• Transactions with interested persons. Loans, leases and payments involving officers, directors or their family members. If your organization rents space from a board member's company, you want to learn that from the form and not from a rumor.
• The governance section, which asks whether the organization has a written conflict of interest policy, a written whistleblower policy, and a written document retention and destruction policy, and whether the completed return was provided to the governing body before it was filed.
• Anything the form claims that the file drawer cannot produce.
That last one is the real exercise. If the return says a policy exists, ask to see it. A 990 that says yes and a drawer that says nothing is a live problem, and the next one gets signed on your watch.
While you are in there, find out when the next one is due. The return is due by the 15th day of the 5th month after the end of the organization's accounting period, which for a calendar-year organization means May 15.
3. The payroll tax filings, and proof the deposits actually cleared
This is the one that can follow you home, so do not delegate it.
Filed and paid are two different verbs, and an organization under cash pressure can do the first without the second for longer than you would think. Money withheld from an employee's paycheck is held in trust for the government. It was never the organization's money.
When it does not get paid over, the IRS can assess the Trust Fund Recovery Penalty against a person rather than the organization. A responsible person is someone with the duty to perform and the power to direct the collecting, accounting and paying of those taxes, and among the people the IRS lists as potentially responsible is a member of a board of trustees of a nonprofit organization. The penalty equals the unpaid trust fund amount in full.
So ask for the filings and the bank records showing the deposits went through. Both. Then reconcile one quarter yourself, line by line, once. It will take an afternoon and it is the best afternoon you will spend that month.
If you find a gap, stop reading advice like this and get a lawyer who does this work. That is not a hedge, it is the correct next step.
4. The most recent audit, plus the management letter nobody photocopies
The audit report gets presented to the board with some ceremony. The management letter goes in a drawer, and the management letter is the interesting one. It is where the auditor writes what could not go in the opinion: the control weaknesses, the missing documentation, the one person who can both approve an invoice and pay it.
Read the current one, then read the prior year's, and note anything that appears in both. A finding repeated two years running is a finding nobody owns.
While you are there, settle whether the organization even needs a single audit. Under the current federal rules, an entity that expends $1,000,000 or more in federal awards during its fiscal year must have a single or program-specific audit for that year. That threshold was $750,000 until recently and the increase applies to fiscal years beginning on or after October 1, 2024. Two things follow. If your organization has been budgeting for an audit it no longer requires, that is real money you just found. If it crossed the line and nobody noticed, that is a different conversation and you want to be having it now.
5. Board minutes for the last two years
Read them for what was approved, and then read them again for what was discussed and never resolved.
Minutes are the only surviving record of promises made in a room. Look for your own compensation as approved, any indemnification of officers and directors, any commitment made to a donor or a funder, every executive session recorded with no detail, and any resignation that got exactly one line. A one-line resignation in the minutes is usually a paragraph in real life.
Then read your own offer letter against what the minutes say the board approved. Those two documents disagree more often than anyone expects, and it is far easier to fix in week one than in year two.
6. The restricted gift file
A restriction is not a donor's preference. It is a condition attached to money that has in many cases already been spent.
Ask for every grant agreement and every donor letter carrying a restriction, and then ask the harder question: can we show, fund by fund, that the money went where it was promised. Not the total. Per fund, with the expenses charged against it.
Restricted money quietly covering payroll in a hard month is the most common slow disaster in this sector, and it is almost always well intentioned. Somebody made the mortgage and meant to put it back. What makes it dangerous is that it does not look like anything until a funder asks for a report.
If your request for restricted fund balances takes two weeks to answer, you already have your answer.
7. The bank signature cards and everyone who can move money
Not the financial policy. The actual cards, plus the current administrator lists on the bank portal, the payment processor, the payroll system and every credit card.
A policy describes intent. A signature card describes power. Find out who can move money today, then find out which of them left in 2019 and never got removed. Include the person who can change where a payout is deposited, because that is the permission that matters most and the one nobody inventories.
This is a two-hour task with a same-week fix, which makes it the rare early win that is actually worth taking.
8. The insurance declarations page, especially directors and officers
Ask for the declarations page rather than a summary, and read the directors and officers policy first.
D&O coverage is usually written on a claims-made basis, meaning it responds to claims made while the policy is in force rather than to acts committed while it was in force. So the question that matters is whether the policy carries prior acts coverage and what the retroactive date is. A new director inheriting a policy with a recent retroactive date has no coverage for anything that happened before it, which is to say for the entire history you just started reading about.
While you have it open, check whether employment practices liability is included, since employment claims are the ones nonprofits actually see, and check the limits against what your largest event genuinely requires rather than what the venue's certificate asks for.
9. Every contract with a termination clause
Leases, the copier, the database, the payment processor, the auto-renewing software nobody remembers buying, the consultant on retainer, and any employment agreement carrying severance.
Build one page: vendor, annual cost, renewal date, notice period, who signed it. The notice period is the expensive column. A contract that renews automatically unless cancelled 90 days out has a real decision date three months earlier than the date printed on it, and that earlier date is the only point where you still have room to negotiate.
Most new directors build this page in month seven, immediately after missing a window.
The four things everyone will hand you, that can wait
The strategic plan. It is a record of the previous leader's priorities and the board's mood on the day it was adopted. It is worth reading in month three, when you can tell which parts were real commitments and which were the consultant's headings. Reading it in week one just tells you what you are expected to say.
The overhead ratio. Someone will show you a pie chart. In a joint open letter, the heads of the three organizations that built the modern rating systems, Jacob Harold of GuideStar, Ken Berger of Charity Navigator and Art Taylor of BBB Wise Giving Alliance, called the notion that overhead ratios are the sole basis for trusting a charity a false one, and pushed the sector toward judging results instead. When the people who publish the ratings tell you the ratio is a poor scorecard, you can stop optimizing for it in your first week.
The rebrand. It is the most tempting early move because it is visible, everyone has an opinion, and it produces something to show the board. It also fixes none of the nine things above, and it spends the goodwill you will want later.
The thirty-day quick win. Somebody will want you to announce something by day thirty. The pressure is real and it is worth naming out loud rather than absorbing. Announcing before you know what you inherited means you end up owning it twice, once as the person who said it and again as the person who has to unsay it.
When a document does not exist
Write that down as the finding, with the date you asked. "We could not locate the determination letter as of March 4" is a sentence that belongs in your notes and eventually in front of the board.
The temptation is to quietly reconstruct it yourself at nine at night, because you are new and do not want to look like you are pointing fingers. Resist that specific instinct. A gap you fix silently becomes a gap nobody knew existed, and you have just taught the organization that the system works, because it did, because you were awake.
How to ask without starting a war
Ask in writing, all nine at once, with a date. Do not ask for an audit of everything, which sounds like an accusation and produces a defensive fog. Ask for a specific list, and give a reason that is true: you are new and you need to know what you are responsible for.
Something close to this works:
"As part of getting up to speed, I would like copies of the following nine items by the end of next week. If any of them are hard to locate, that is genuinely useful for me to know too, so please tell me rather than spending your weekend on it."
That last clause does more work than the other nine items combined. It converts a missing document from somebody's personal failure into information, which is the only way you will ever hear about the real gaps.
Send the same list to your board chair at the same time. Not to escalate, but so that the request is visibly part of your onboarding rather than a private investigation of the staff.
A ninety-day shape
• Week one. Request all nine in writing. Separately, pull the administrator lists yourself from the bank, the processor and the payroll system.
• Weeks two to four. Read them. Meet the auditor and the bookkeeper separately, not together. Find the retroactive date on the D&O policy. Reconcile one quarter of payroll taxes and one restricted fund end to end, personally.
• Days thirty to sixty. Fix what is cheap. Signature cards, a renewals calendar, and the written policies your 990 already claims you have.
• Days sixty to ninety. Now read the strategic plan, and write the version that survives what you found.
None of this is the part of the job you took it for, and none of it will feel like leadership while you are doing it. Do it in week one anyway. The alternative is finding out in month four, when it has stopped being the last person's problem and started being yours.
Frequently asked questions
What should a new nonprofit executive director do in the first week?
Ask, in writing, for nine documents: the IRS determination letter, the last three Form 990s, payroll tax filings with proof of deposit, the most recent audit and its management letter, two years of board minutes, the restricted gift file, bank signature cards, the insurance declarations page, and every contract with a termination clause. Reading them is the work of weeks two through four.
Can a nonprofit board member or director be personally liable for unpaid payroll taxes?
Yes, it is possible. The IRS can assess the Trust Fund Recovery Penalty against a responsible person, defined as someone with the duty to perform and the power to direct the collecting, accounting and paying of trust fund taxes, and the IRS specifically lists a member of a board of trustees of a nonprofit organization among those who may qualify. The penalty equals the unpaid trust fund amount. If you suspect a gap, get legal advice rather than guessing.
How do I check whether our tax-exempt status is still valid?
Check the organization against the IRS Automatic Revocation of Exemption list. Exempt status is revoked automatically after three consecutive years without filing the required annual return, effective on the original due date of the third return, and there is no appeal process for a proper automatic revocation.
Does our nonprofit need an audit?
For federal awards, an entity that expends $1,000,000 or more in a fiscal year must have a single or program-specific audit. That threshold rose from $750,000 for fiscal years beginning on or after October 1, 2024. Separately, your state, your funders and your own bylaws may require an audit at lower levels, so check all three rather than only the federal rule.
What is a management letter and why does it matter more than the audit?
The management letter is the auditor's private note to leadership about control weaknesses and problems that did not rise to the level of the formal opinion. It usually names the specific things that could go wrong, which makes it far more useful to a new director than the audit report itself. Read two years of them and note anything repeated.
What if the previous director left no records?
Treat each missing item as a finding with a date, and report it rather than quietly reconstructing it. The IRS determination letter, filed 990s and state registrations can generally be recovered through the IRS and your state charity office. Internal memory, meaning why a fund was restricted or what a board actually promised, is the part that does not come back, which is why the board minutes and the restricted gift file are worth reading first.
Should I read the strategic plan first?
No. Read it around month three. In week one it tells you what you are expected to say rather than what is true, and you cannot yet tell which commitments in it were real.
Start here
If you are stepping into a director role and want the operational side laid out in one place, our free Nonprofit Operations Guide covers the systems side of the same ground: how the money, the donors, the volunteers and the reporting fit together, and what to fix first when they do not. No login required.
