Setup a Non-Profit Corporation
Starting a non-profit corporation is a worthwhile investment towards a good cause. Non-profits provide the public with services not provided by income-driven organizations and also extend the majority of their resources toward a cause without having to pay taxes. Creating a non-profit corporation is a straightforward process that requires preparation.
Instructions
Purpose
1. Develop a mission statement for your non-profit corporation, stating its goals and reason for existence. Your mission statement is important for drawing in any potential donors or grants you will need for financial support.
2. Add the services you wish to provide in your corporation to the mission statement and how it will help your clientele. Writing your purpose will help answer why your organization is needed.
3. Investigate other non-profit corporations to see if the services you will provide are already addressed. If the field you are seeking to help is already saturated, analyze whether your organization will offer something others will not or something that will cause clients to choose your services instead.
Staffing
4. Hire an attorney for your corporation to handle any legal issues that might arise. Non-profits are often brought to court to contest their tax-free status. An attorney will also assure completion of all the initial paperwork for non-profit status. Seek out references for interested attorneys or enlist the help of a legal aid organization near you.
5. Hire an accountant to handle any bookkeeping and money management for your corporation. If you have trouble affording one, place an ad in the classifieds asking for volunteers with financial management skills. There are always volunteers seeking to clock in community service hours.
6. Recruit a founding board member base that will invest time, energy and money into the organization. The board is made up of expert and influential members who are interested in achieving your mission statement. Select individuals who will actually offer insight and work.
7. Create a development department to work on fundraising, sales and grant writing for your corporation. The department is in charge of petitioning funds from the government and soliciting donations through mass mail, phone calls, and fund raisers. It is their job to research how and where you will acquire enough money to operate your corporation.
8. Develop a marketing and press department that will work on crafting your message to the public. Marketing is needed to make people aware of the services you are providing. The department will also work closely with your development team to create written material that will bring potential donors and clients.
Internal Management
9. Create a formal charter for your corporation and submit the document to your local Secretary of State office. A charter is the official framework for your corporation, indicating how the organization will function.
10. Develop a set of by-laws for your board that details how decisions will be made in the organization. It is important for board members to know how much influence they have in the corporation and how it will operate. By-laws offer a way to handle dissenting opinions in a just and judicious manner.
11. Meet with your board members to review and approve all governing documents of the corporation. This will include the revision and approval of the mission statement, charter and by-laws. The initial meeting should also designate board officers such as Chair, Vice Chair, Treasurer, Parliamentarian and Secretary.
Government Filing
12. Acquire an employer identification number (EIN) by filing Form SS-4 with the IRS. An EIN is required for tax exemption filing.
13. File for tax-exemption status by filing Form 1023 with the IRS. You will need to present your EID, charter and by-laws. The IRS will then send you a determination letter indicating your tax status in approximately six months.
14. File for any state tax exemptions. Each state has different tax exemption offers for non-profit corporations, so check with your local government agency for requirements. Some exemption offers include property tax.
Functioning
15. Acquire a bulk mail permit at your local post office. Bulk mail permits allow an organization to send mass mail such as brochures, letters, flyers in a bulk to potential donors or clients. The post office will allow you to obtain the permit at a discount price.
16. Open a bank account at a local bank. Local banks often have better benefits for non-profit corporations than national banks. Seek out references from other non-profits for suggestions.
17.Obtain liability insurance to protect the corporation's assets. Any person working for the corporation, including the board, may be subject to lawsuits, including sexual harassment, wrongful termination, discrimination, negligence and breach of contract. The liability insurance will protect employees and board members from litigation hassles.
18. Research any grants that your corporation may qualify for. The government offers various grants and loans to non-profit organizations depending on the type of services they provide.
