Checklist 501 (c) (3) to start a foundation or non-profit initiative

Below are some comments for those who want to initiate a foundation, a charity or a nonprofit organization. We've composed these ideas and want to share it with others. This is not a exhaustive or complete list, but refers to a number of issues that should be considered when planning a nonprofit and planning events.

Non-profit type

Some of the most common questions are nonprofit organizations, foundations, and charity organizations:

  • "What is the difference between public benefit and public foundation?"
  • "Is there a difference between the Public Foundation and the Private Foundation?"

Here are some answers.

Public Charities and Foundations

In most cases there is no real difference between the public charitable organization and the public foundation. Both types of organizations work in the interest of the common good, which they create for good causes and other unrelated non-profit orientation. If the nonprofit 501 (c) (3) is an exempt organization, then IRS will receive a "deciding letter". This means that the organization is exempt from federal income tax on the basis of internal income code (IRC) 501 (c) (3), and charitable or foundation donations may be deducted.

At least one-third of public charitable organizations and foundations support the population, including gifts, subsidies and prizes. In addition, up to one third of their funding may come from investment income. In essence, public support should be given to the diversity of gifts and subsidies and not to rely on asset size or investment income.

Private Foundations

On the other hand, the private foundations usually have a major source of support or revenue. For example, a private foundation can be started with a big family and never seek support again. In most cases, you will know whether you are a private foundation, because you are creating the Foundation as the Base Advisor. In general, private foundations have less tax advantages than public charitable organizations.

Creating Entity

Now that you get a clearer picture of the nonprofit type you want to create, the first step is protecting the founders, directors, and trustees. The type of legal personality of a non-profit organization varies by state, so do not jump to the gun. You may have heard about companies, S-companies or limited liability companies (LLC).

However, some states have legal personalities for non-profit organizations such as the "Non-Profit Corporation". Check with local and state authorities. Many of them are very useful web sites. You may want to check on a legal adviser or knowledge of nonprofit and legal issues. There is usually a nominal fee for establishing the organization and signing up with the Secretary of State or other appropriate offices.

501 (c) (3) Status

After organizing the nonprofit company as it is, state 501 (c) (3) status with the IRS. As mentioned above, this grants donor status to the organization and assures donors that their contributions to nonprofits provide tax exemption. The declarative letter of the IRS 501 (c) (3) provides a very necessary authenticity to your organization.

The application form may seem confusing, but the number and number of pages are worse than they actually are. In general, forms have been designed to ensure the effective establishment of non-profit for the benefit of the public good and to have checks and balances of goodness and truth. In addition, the rules and regulations focus on the appropriate disbursement of charitable contributions and the types of appropriate causes. For example, nonprofits should not be created for lobbying or political purposes.

There are again specialists who can help accomplish this task, which is covered by an IRS Form 1023 – Section 501 (c)) (3). The fee for the 1023 form fee is currently $ 400 or $ 850, depending on nonprofit gross revenue over a four year period

The IRS is expected to issue a Cyber ​​Assistant to spend 1023 in 2010 form. the Cyber-Assistant fee is $ 200 or $ 850 if the regular form is submitted by post.


Under the responsibility of the principals, directors and directors, account must be taken of the organization's responsibility for doing business. Many states have a good "liability law" for nonprofit organizations that provide solid "good Samaritan" protection. For more information, contact your Legal Adviser or other professionals in the field.

You want to study and understand your non-profit liability laws in your state. As your body grows, it is worth looking for different options and / or additional protection.

Annual Reports

Non-profit organizations are required to submit IRS-related documents annually to maintain their tax exemption. This is typically the IRS Form 990 series. Private foundations have a 990-PF form and are on average more stringent.

Public charity organizations form a 990 form or this form, such as a 990-EZ form, depending on gross revenue and assets. Low-income organizations with a gross income of less than $ 25,000 must submit an electronic postcard, Form 990-N.

State Charitable Organizations are also required to submit a Schedule A, which ensures non-profit support for the general public. This is because public benefit organizations or public foundations benefit from certain taxation benefits from private foundations.

Fundraiser Logistics and Costs

Its nonprofit is generally a collection of funds intended for public service purposes. While you are planning to collect various fundraisers and events, here is a quick list of the items you need to think about.

In many cases, local organizations, such as businesses or schools, may be willing to use the site, printing costs, entertainment, gifts / prizes, etc. scan the following list to assist in the design process:

  • Vision and Design. You have a vision and use the right judgment as to what you expect from the event. Plan ahead and think about ticket pricing, potential participants, participation, and other logistics.
  • Event Theme: Participation or Entertainment
  • Location. Based on your vision and theme, which location can you get? Will the site be discounted or donated?
  • Print and other costs (posters, flyers, tickets, programs). Try to get sponsors.
  • Marketing. Think of the available methods: posters, flyers, cards, etc. Direct mail and advertising. And people!
  • People. Join others. Community members can be useful as well as the local press. Think about schools (parents, PTAs, agents, superintendents), churches and businesses. That's a good reason, so hopefully people will be useful.
  • Help in the hands. You will need the actual hands to help with the event (collect tickets, money, shows, and guides). Get early to get help so that everyone can feel part of the effort sooner. This will help "rumor" and "miss the word".
  • Depending on the fundraising event, the photographer can help with the publicity of the event and at least provide enduring and good memories for all participants. We hope you found this information useful. Please contact us with other helpful thoughts.



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