So You Want to Start a Non Profit Organization ?A Quick Reference Guide
1. Carefully consider the reason why you want to start a non profit organization and make sure that the reason fits government guidelines.
2. You need to find a name for the organization. The name, known as a fictitious name, must not be in use by someone else in the State of Florida or whatever state you are filing in.
3. To become a non profit organization in the State of Florida, a transmittal letter and Articles of Incorporation must be filed with the Department of State, Division of Corporations. A fee of $ 87.50 covers the filing fee, a certified copy and certificate. The Articles of Incorporation must include required language by the state and federal government in addition to specific information about the organization.
4. You must obtain an Employer Identification Number (EIN). This can be done over the telephone or by submitting form SS-4 with the US Department of Treasury.
Although there are many kinds of non profit organizations, the most common is a
501-(C)-3. There are over 10 other 501-(C) kinds of organizations. For example, a 501-(C)-6 is for Chambers of Commerce, Boards of Trade and Real Estate Boards.
A 501-(C)-3 non profit corporation is organized exclusively for charitable, religious, educational, and scientific purposes.
5. For a 501-(C)-3 organization, you must complete Form 1023, the federal application for Recognition of Exemption under section 501-(C)-3 of the Internal Revenue Code. As part of the application, you must also include Form 8718, User Fee for Exempt Organizations- Determination Letter Request. You may also need to include Form 872-C.
6. In addition to form 1023 and the others mentioned above, you need to include the projected budget for the organization for 3 years as well as a staff list and description of duties and salary that is expected for the first year of operation.
7. Select a few board members for the original incorporating board. It is best that they are not family members. They should be people that believe in your cause and people that you know and trust.
A Few Tips
A) In the initial stages of considering whether you want to start a non profit organization, you need to realize that a non profit is different in many ways than a private business. For example, ownership and decision making is accomplished democratically with a board of directors.
B) Some people may have the notion that just by starting a non profit organization, grants flow in immediately- this is not the case. Since the grant process is highly competitive, grant makers like to see what you have done before funding is awarded. We suggest you document all of your activities to demonstrate your track record.
C) Since a non profit corporation is a business, the initial incorporators should have a budget. Usually, the budget comes from a donor or, more commonly, out of pocket to cover expenses such as filing fees, telephone number, address, mileage, supplies, and occasional technical assistance.
D) From the time you submit the 1023 along with a certified Copy of your Articles of Corporation and the $ 500.00 processing fee to the federal government, you can expect it to take between 3-5 months for a response. Typically, the IRS will respond with further questions that need to be answered within a specific time period. If those questions are answered to their satisfaction, they may then send you the 501-(C)-3 Determination Letter. Keep in mind that the IRS is not obligated to grant you a 501-(C)-3.
David C. Brown, MA, President of Sustain-a-Village has been a specialist in the non-profit sector providing start up, development and management services for the past ten years.
helpful websites:
David Brown, M.A. Director
Sustain a Village
1234 S. Dixie Hwy, Suite 207
Coral Gables, FL 33146
305-663-4455
info@sustainavillage.com
www.sustainavillage.com