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How to start a nonprofit organization

This is the last in a series on starting nonprofits and their boards. Don’t do it unless there’s no one else you can trust to take and receipt donations for you.  It’s a fair amount of work and you’ll probably have to hire an accountant to file form 990 to ensure compliance. …
By Seth Barnes
By Seth Barnes
This is the last in a series on starting nonprofits and their boards.
Don’t do it unless there’s no one else you can trust to take and receipt donations for you.  It’s a fair amount of work and you’ll probably have to hire an accountant to file form 990 to ensure compliance.

There are many organizations engaged in work similar to what God has burdened you with and the easiest course of action is to negotiate a partnership with them so they take care of the receipting and IRS regulations.

If you are bound and determined to get 501(c)3 status with the IRS, begin by checking out their nonprofit FAQ page. Next, review the Life Cycle of a Public Charity.  Next, follow these steps:

(1)  Go on your state government web site and print out the forms to incorporate your organization.  This should be quick, easy and inexpensive.

(2) Go to the www.IRS.gov  web site and print out form 1023.  Completing this form and getting IRS approval is a protracted, tedious process.  Expect an IRS agent to ask you questions along the way.  Or hire a lawyer to fill it out for approx. $3000. 

(3) Do the hard work of defining the purpose of your new organization.  Recognize that, whatever you decide, it will limit the scope of your activities in the future.

(4) Find a template of some corporate by-laws.  Edit them to fit your organization. You’ll need to have a formal meeting of your board where you approve the by-laws and record that action in the minutes.

(5) Although it will probably take many months or even more than a year before you receive IRS approval, the government will allow you to receipt donations retroactively.  So, as soon as you’ve incorporated, assuming the IRS ultimately approves your status, you’ll be able to take donations.

(7) Once you’ve begun the process, you are obligated to file reports with the government.  The 990 is the year-end summary of your activities.  And of course social security must be withheld and filed monthly.
 
Nonprofits in America have a rich history. We are one of the most generous nations on earth and the tax laws have been very instrumental in facilitating our urge to help others. It may look like a lot, but it’s actually not bad compared to many other countries, many of which don’t give tax breaks to nonprofits. If, after reading this series you elect to join the hundreds of thousands of other nonprofits, I wish you the best!

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