Nonprofit | Chamber of Commerce https://www.chamberofcommerce.org Tue, 09 May 2023 10:21:38 +0000 en-US hourly 1 https://wordpress.org/?v=6.1.1 https://www.chamberofcommerce.org/wp-content/uploads/2023/06/cropped-display-photo-1-32x32.jpg Nonprofit | Chamber of Commerce https://www.chamberofcommerce.org 32 32 How to start a nonprofit https://www.chamberofcommerce.org/nonprofit Thu, 24 Mar 2022 15:57:28 +0000 https://www.chamberofcommerce.org/?p=22154 Nonprofit organizations or NPOs are institutions that are created to offer a service or public social benefit instead of generating profit for their founders. Therefore, nonprofits aim to improve the overall quality of life for the community or the natural world. All profit made by nonprofit organizations should benefit the organization’s mission instead of enriching […]

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Nonprofit organizations or NPOs are institutions that are created to offer a service or public social benefit instead of generating profit for their founders. Therefore, nonprofits aim to improve the overall quality of life for the community or the natural world. All profit made by nonprofit organizations should benefit the organization’s mission instead of enriching stakeholders, which is how for-profit companies work.

Additionally, successful nonprofit organizations apply for tax-exempt status, which makes them exempt from paying federal income tax and allows tax deductions for charitable donations. Some common examples of organizations in the nonprofit sector include political organizations, social clubs, churches, schools, humanitarian programs, and public charities.

Starting a nonprofit organization may seem like a tedious and complex process; however, a methodical step-by-step approach will help you ensure success. Consequently, it’s one of the most satisfying ways that individuals can use their time, but it requires solid dedication and thorough planning.

The following step-by-step guide will show you how to start a nonprofit organization.

1. Select a name for your organization

Once you’ve decided on the nonprofit’s purpose and you’ve identified a way to fulfill the unmet need in your community, it’s time to start thinking of a name for your organization. 

This initial step is crucial as a nonprofit needs a name that ultimately establishes its brand and image. Therefore, the name should comply with state naming requirements and should be easy to find by donors and potential members. Also, consider checking whether the business name is available as a web domain in the event you plan on creating a website to boost nonprofit credibility and exposure.

Read more: Best Business Name Generators

2. Nominate a registered agent

Every nonprofit organization will need to nominate a registered agent. Registered agents are also referred to as resident, statutory, or service of process agents. 

The nominated individual will be responsible for accepting important legal documents on behalf of the nonprofit organization. Therefore, the registered agent is ultimately your business’s point of contact with the state.

You may nominate anyone as your nonprofit’s registered agent, provided they are over the age of 18 and reside in the state. The individual must also consent to the appointment.

Read more: Best registered agent services

3. Recruit your board members

The next crucial step in the process of incorporating a nonprofit with the state is selecting board members or a board of directors. The board of directors is responsible for governing the operations of the organization.

While each state has specific requirements, in most cases, you need to nominate three directors as well as an additional three members to fulfill the roles of president, secretary, and treasurer. The directors will serve an initial term of service until a successor is nominated.

4. Consent to bylaws and conflict of interest policy

Creating, ratifying, and approving essential governing policies is the next step in the process of starting a nonprofit organization. Two of the important documents needed are the Bylaws and the Conflict of interest policy.

  1. The Bylaws are a collection of rules that determine how the organization will run.
  2. The Conflict of interest policy is a collection of rules and regulations set in place to ensure that decisions taken by the board of directors or members are always in the nonprofit’s best interest and not to further the personal agendas of any nonprofit member.

These governing documents will need to be adopted and ratified during the organization’s first board meeting when officially appointing directors and officers. While they do not need to be filed with the state, they need to be kept in a safe place for reference as and when needed.

5. Select a nonprofit startup corporation structure

There are different types of organizational structures. So this step in the process depends on you deciding on the legal form for your organization.

Typically, charities take the legal form of a nonprofit public benefit corporation. However, other nonprofits are established as trusts or associations. You should seek legal advice to determine what legal form is best for your nonprofit. Thereafter, you’ll need the necessary forms available on your Secretary of State Corporations Division website in order to incorporate your nonprofit. 

Other types of corporations or types of nonprofits include mutual benefit and religious corporations. Mutual benefit corporations are typically formed to benefit their members. This includes business leagues and social clubs. Religious organizations are usually churches and other places of worship.

6. Prepare and file nonprofit Articles of Incorporation

You will need to file the Articles of Incorporation with your state in order to register your nonprofit organization. This step is also essential to gain tax exemption eligibility and to apply for tax-exempt status or 501c3 status.

Additionally, the Articles of Incorporation must contain the following information as clearly and concisely as possible:

1. Purpose

Your articles must clearly state the purpose of your nonprofit.

Think of it as your organization’s mission statement. In order to qualify for tax exemption, your nonprofit corporation must be limited to one or more of the following categories: Charitable, Religious, Scientific, Educational, Literary, Preventing cruelty to animals/children, Fostering international/national, non-professional sports competition, and Testing for public safety.

2. Dissolution

The dissolution clause clearly states what your nonprofit’s assets are being used for and what should become of the assets if the organization is dissolved. Your nonprofit’s assets must only be used for the purposes approved under section 501c3 so you can meet the IRS provisions for tax-exempt status.

To learn more about meeting IRS requirements for tax exemption, refer to this IRS sample document.

In addition to the purpose and dissolution clause, your articles must also include pertinent information about your nonprofit such as:

  • Your organization’s business name
  • Your organization’s initial registered office
  • The names and addresses of your Board of Directors
  • The name and address of the registered agent

7. File an initial report

Once you form and register your nonprofit organization, you could be required to submit initial reports to your Secretary of State. The due dates for initial reports will differ from one state to the next but often fall within a 90-day bracket.

8. Secure an EIN (Employer Identification Number)

An EIN is an Employer Identification Number. It’s also referred to as the Federal Tax Identification Number. The government uses the EIN to identify business entities within each state. So essentially, it is a social security number for your nonprofit.

An EIN is useful in various instances, such as opening a business bank account, submitting 990 tax returns, and hiring employees for your nonprofit. In order to receive an EIN, you’ll need to obtain it from the Internal Revenue Service or the IRS website

The EIN is completely free of charge, and the quickest way of obtaining it is by putting in your application online

9. Apply for federal tax exemption

In order to receive federal income tax exemption, you need to apply for 501c3 tax-exempt status, under the Internal Revenue Code. While the process can feel like a daunting and tedious step, obtaining tax exemption comes with a number of benefits. 

This includes being able to apply for funding from both government and private foundations in addition to being exempt from income tax. In order to put in your application for tax exemption, you need to review the criteria for your application and ensure that you meet the eligibility requirements laid out by the Internal Revenue Service.

You’ll need to complete IRS Form 1023 or the template and submit it to the Internal Revenue Service website to begin the process. If you run a small business organization, completing IRS Form 1023-EZ is recommended. This is a simple and short application form, which is also less time-consuming.

Also, ensure that your organization has elected the board of directors, filed the Articles of Incorporation, adopted governing policies, and obtained an EIN number prior to putting in your application.

Once the application has been received, the Internal Revenue Service will review it. There are only two possible outcomes thereafter. 

  • The first is that your application will be approved. You’ll receive a determination letter stating that your organization is one of the existing organizations that is now one of the exempt organizations. 
  • Alternatively, your application may be declined, and if so, you’ll receive a letter of explanation detailing why the application was not successful.

10. Apply for state tax exemption

Depending on the state in which you are incorporating your nonprofit, you may or may not need to apply for state income tax exemption. Additionally, you could also be required to file to obtain sales tax exemption in your state.

11. Other applicable permits and licenses

To legally operate your nonprofit organization in your state, you need to secure the relevant licenses and permits. Since this varies on a local, state, and federal level, you should refer to the  Small Business Administration Business License & Permit look-up tool. When using the tool, ensure that you type in your locality and business type.

Additional state registration and reporting requirements

Depending on the state in which are incorporating your nonprofit organization, you may or may not be required to register with the state prior to participating in charitable solicitation or fundraising activities

You could also be required to register your nonprofit organization in other states if you plan on engaging in any type of fundraising activities outside of the nonprofit’s incorporated state.

12. Submit an annual report

An annual report documents the accomplishments of the nonprofit organization during the previous year. Additionally, it also looks ahead to the future. While not all nonprofit organizations in every state will need to find an annual report, it is recommended that you do so to gain further credibility with federal and state governments.

Costs of starting a new nonprofit 

The costs of starting a nonprofit organization will differ from one state to the next. It may cost anywhere between $275 or in excess of $900 in both state and federal filing fees.

Next steps 

After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly, aside from forming a strategic plan. Let’s take a closer look at them below:

Open a business bank account

  • Maintain accounting and tax filing
  • Ensure that your personal assets are kept separate from your nonprofit’s assets

To open a bank account, you will need to provide:

  • Your EIN
  • A copy of your articles of incorporation
  • A copy of your organization’s bylaws

Hire a business accountant 

  • Simplify payroll and bookkeeping
  • Prevent your nonprofit from avoiding penalties and tax errors
  • Manage your nonprofit’s funding

Obtain insurance 

  • Focus on growing your nonprofit
  • Manage risks
  • You may opt for General liability, Personal liability, or Worker’s compensation insurance.

Build a website

As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals. 

Consider other technological tools as well! There are various nonprofit-specific tools that can be used to improve operations. They can help with everything from managing internal workflows to fundraising. Evaluating the best nonprofit CRM options can be a starting point because a CRM is a foundational piece of technology for every organization.

Read more: Best website builders

Sign legal documents

One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit. 

If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:

  • State the registered name of your nonprofit
  • Use your name and signature
  • State your position/role in the organization as its authorized representative

When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual. 

Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing. 

FAQs

It is possible to start a nonprofit without any money. One of the best ways to do so is using fiscal sponsorship. Fiscal sponsorship is a partnership with an existing organization or existing 501c3 corporation that takes a new nonprofit under its wing while the company is in the process of being incorporated or awaiting tax-exempt status.

There are various types of nonprofit organizations. However, the three main types of charitable organizations include private foundations, private operating foundations, and public charities. Each of the different types of nonprofits comes with its own set of advantages and disadvantages. 

While founders or executive directors of nonprofit organizations are not allowed to profit or gain from the corporation’s net earnings, they are allowed to earn money in other ways. One of those ways includes receiving a salary or compensation for their time and service to the nonprofit. However, if being paid a salary, it must be disclosed to the IRS.

Nonprofit organizations are allowed to participate in charitable solicitation and fundraising activities. They are also allowed to receive donations and sponsorships from both government and private foundations. Another way in which nonprofits can raise funds is by selling goods and services. See the top 10 best fundraising sites for your next fundraiser.

Nonprofits are required to elect a Board of Directors. The board should include a minimum of three directors, an incorporator who will be responsible for signing the Articles of Incorporation, as well as additional members to serve the roles of president, secretary, and treasurer. The job descriptions of each board member must be clearly outlined in the company’s governing policies.

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How to Start a Nonprofit in Arizona https://www.chamberofcommerce.org/nonprofit/arizona Thu, 24 Mar 2022 14:53:53 +0000 https://www.chamberofcommerce.org/?p=20179 Nonprofits are created for the greater good of humanity. Nonprofits do not have hidden agendas, nor are they formed for monetary gain. Nonprofit organizations also receive various benefits, including tax exemptions on both federal and state taxes, access to grants, and credibility for their cause. Nonprofit corporations formed in Arizona can take anywhere between two […]

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Nonprofits are created for the greater good of humanity. Nonprofits do not have hidden agendas, nor are they formed for monetary gain.

Nonprofit organizations also receive various benefits, including tax exemptions on both federal and state taxes, access to grants, and credibility for their cause.

Nonprofit corporations formed in Arizona can take anywhere between two weeks to three months until they receive their 501(c)(3) status. As it stands, there are approximately 29,043 successful nonprofit organizations in the state of Arizona. 

Some of the most well-known NPOs in Arizona are Saving Orphan Souls Rescue, ICAN, International Cancer Advocacy Network, and Arizona Animal Welfare League, Inc.

1. Select a name for your organization

After establishing that you’d like to start a nonprofit organization instead of any other type of business entity such as a for-profit or limited liability company, you should start thinking of a name for your organization. Once you’ve decided on a name, check with the Arizona Secretary of State to ensure that it is indeed available. 

Any name you choose for your Arizona nonprofit must comply with Arizona naming requirements.

You’ll need to get approval in writing from the Arizona Department of financial institutions if your nonprofit contains any of the following words:

  • Banking
  • Savings Bank
  • Bank
  • Banker
  • Banco
  • Banc
  • Deposit
  • Credit Union
  • Building Association
  • Savings Association
  • Building and Loan Association
  • Savings and Loan Association
  • Thrift
  • Trust Company
  • Trust

Refer to the State of Arizona Website also referred to as the Arizona Corporation Commission to check the availability of your nonprofit name.

2. Nominate an Arizona registered agent

Every Arizona nonprofit organization must nominate a registered or statutory agent. The statutory agent is also referred to as a resident agent or service of process agent. 

This is because they are tasked with receiving all legal and official documentation from the state on the nonprofit’s behalf. Ultimately, the Arizona statutory agent is your business’s point of contact with the state.

When nominating the statutory agent in Arizona, they must meet the following requirements:

  • The nominated statutory agent must be a resident of Arizona
  • The registered agent must be authorized to transact business in Arizona
  • The registered agent must be over the age of 18
  • The registered agent must have a physical address or street address and not just a P.O. Box address
  • The nominated registered agent must also remain available to receive legal documentation on the nonprofit’s behalf during normal working hours
  • The Arizona service of process agent must consent to the appointment

3. Recruit your board members

When setting up your nonprofit foundation, you’ll need to select a Board of Directors

The Board of Directors is responsible for overseeing the company’s operations, and you need to select a secretary, president, and other members of the board who will all have individual responsibilities. 

The organizational structure for your Arizona nonprofit should include:

  • A minimum of three directors who are not related to each other
  • One officer who will be tasked with recording meeting minutes 

When the blood meets for the first time, it is referred to as the board’s organizational meeting. 

The following actions should be undertaken during the organization’s first board meeting:

  • Appointing officers 
  • Approving the bylaws 
  • Approving the initial transactions of the nonprofit such as opening a business bank account 
  • Creating an accounting and tax period

During this meeting, the minutes need to be taken down accurately to record all the actions that were taken by the board. 

4. Consent to bylaws and conflict of interest policy

In order to be eligible for 501(c)(3) status in Arizona, your nonprofit organization must have the following documents :

  • Bylaws
  • Conflict of Interest policy 

The bylaws are basically the rules and regulations that outline the organization’s operational procedures. It may contain the organization’s mission statement as well to further clarify your nonprofit’s cause.

The Conflict of Interest policy is an accumulation of rules and regulations laid down to ensure that all decisions made from the onset benefit the organization’s purpose and cause instead of individual members’ agendas. 

Prior to filing the Articles of Incorporation, you need to have your Bylaws in place that comply with Arizona law. 

Bylaws do not need to be filed in the state of Arizona; however, they should be kept on file and used as the internal operating manual for your nonprofit. 

5. Select an Arizona nonprofit startup corporation structure

There are many types of nonprofit organizational structures in Arizona as follows: 

  • Mutual benefit corporations: These corporations may or may not choose to apply for state and IRS tax-exemptions. This type of nonprofit corporation is an organization similar to other mutual benefit corporations found in common law nations. 
  • Public benefit corporations: Public benefit NPOs or public charities are created for charitable causes and act as social welfare organizations. Public benefit corporations include religious and charitable organizations formed to generate public and social good.
  • Mutual benefit common interest development corporations: These are the nonprofit formations created under the Davis Stirling Common Interest Development Act to administer common interest development, such as a homeowner’s association. 
  • Religious organizations/corporations: These nonprofits are solely for religious purposes or places of worship like churches. 

6. Prepare and file nonprofit Articles of Incorporation

The Articles of Incorporation is what formerly marks the creation of the organization. There are various requirements that need to be met when filing Articles of Incorporation that meet both Arizona and federal government requirements. 

The state of Arizona does have regulations, but so does the Internal Revenue Service; however, the Articles of Incorporation you file must meet both sets of requirements in order to successfully apply for tax-exempt status and become an exempt organization.

One of the IRS requirements is that your organization’s purpose must be declared in the Articles of Incorporation, including any restrictions on activities and distribution of assets in the event of dissolution.

The following guidelines will help you file your Arizona nonprofit’s Articles of Incorporation:

  • The name of the nonprofit
  • A declaration of the nonprofit’s purpose
  • The street address and names of the directors
  • The street address, name, and signature of the service of process agent
  • The address of the organization (can be the same as the registered agent’s street address)
  • Names, addresses, and signatures of the incorporators
  • Disclosure of whether any member or stakeholder has a criminal record
  • Disclosure of whether any stakeholders were a part of receivership or bankruptcy with any other corporation

For instructions on filing your Articles of Incorporation, go to the Arizona Corporation Commission. File your articles online or via mail at the following address:

Arizona Corporation Commission

Corporations Division

1300 W. Washington St.

Phoenix, Arizona 85007

Publish Incorporation

Arizona nonprofits need to publish incorporation. Nonprofits must publish in the county of the known place of business in the state of Arizona. It needs to be done within 60 days of incorporation from the date that the ACC approves your nonprofit’s Articles of Incorporation

Additionally, it must be published for three consecutive publications in your registered county. The only two county’s in Arizona that are exempt from publishing incorporation are Maricopa and Pima. 

7. File an initial report

Nonprofits are not required to file an initial report in the state with the Arizona Attorney General

8. Secure an EIN (Employer Identification Number)

Obtaining an EIN is a crucial step for your Arizona nonprofit. The nine-digit Employer Identification Number is assigned to the nonprofit by the IRS and is essentially a Social Security number for your organization. Therefore, your nonprofit needs an EIN.

Some of the benefits of obtaining an EIN include:

  • Being able to pursue tax exemption
  • Receive tax-deductible donations
  • Open a business bank account
  • Hire employees for your nonprofit

You may apply on the IRS website online using Form SS-4 to obtain an EIN. The application is free online, and you’ll receive your EIN immediately.

9. Apply for federal tax exemption

Every nonprofit in the state of Arizona must file for 501(c)(3) federal tax exemption. Some of the benefits of obtaining tax-exempt status in Arizona include:

  • Access to grants and sponsorships
  • Tax-exempt status on business-related expenses

You need to apply to the IRS under the Internal Revenue Code to receive tax exemption by using one of the following forms:

  • File Form 1023: This IRS form has a three to six-month ETA. It is intended for larger organizations or those expecting to generate more than $50,000 in the next three years.
  • File Form 1023-EZ: This form is intended for small business nonprofits who expect to earn under $50,000 over the first three years. 

Additionally, you’re required to include the nonprofit’s Articles of Incorporation. This should include the same language used when you initially filed your articles with the state of Arizona. 

If the IRS approves your application for federal income tax exemption, they’ll send you a determination letter. 

10. Apply for Arizona state tax exemption

Your Arizona nonprofit is automatically exempt from state income tax after receiving 501c3 or federal tax exemption from the IRS. Once you have your determination letter in hand, you don’t need to apply for state tax exemption. 

11. Other applicable permits and licenses

After obtaining federal tax exemption, your Arizona nonprofit may still require business licenses. Ultimately, it depends on your location, business type, and the types of activities your nonprofit is going to be involved in. 

Feel free to head over to the Arizona Commerce Authority or the following Arizona government publication to get detailed information on business licensing in your state and county. 

Additional state registration and reporting requirements

As of 2013, Arizona nonprofits are no longer required to register for fundraising or charitable solicitation

12. Submit an annual report

Arizona nonprofits are required to file an annual report with the Arizona Corporation Commission. This is to ensure that all information pertaining to the nonprofit organization is up-to-date. The annual report may be filed online

Costs of starting a new nonprofit in Arizona

  • Publishing of incorporation: ~$200
  • Articles of Incorporation: $40 + optional $35 expedite fee
  • Tax-exempt status or 501(c) filing fee: $275 or $600 IRS fee
  • Arizona state taxes: $12 per license/location

Payment for tax-exempt status must be paid via pay.gov at the time of submission.

Next steps

After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:

Open a business bank account

  • Maintain accounting and tax filing
  • Ensure that your personal assets are kept separate from your nonprofits’ assets

To open a bank account, you will need to provide:

  • Your EIN
  • A copy of your articles of incorporation
  • A copy of your organization’s bylaws

Hire a business accountant 

  • Simplify payroll and bookkeeping
  • Prevent your nonprofit from avoiding penalties and tax errors
  • Manage your nonprofit’s funding

Obtain insurance 

  • Focus on growing your nonprofit
  • Manage risks

You may opt for General liability, Personal liability, or Worker’s compensation insurance.

Build a website

As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals. 

Sign legal documents

One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit. 

If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:

  • State the registered name of your nonprofit
  • Use your name and signature
  • State your position/role in the organization as its authorized representative

When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual. 

Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing. 

FAQs

Yes, a registered office is required for all nonprofits in the state of Arizona. The name and address of the registered agent must be included in the Articles of Incorporation and when publishing incorporation. Additionally, the nonprofit’s registered agent must maintain regular working hours and be physically located in the state to receive all official documentation on the organization’s behalf.

Costs will be incurred on both the state and federal levels for nonprofit organizations in Arizona. You’ll need to pay for filing Articles of Incorporation, state tax licenses, and an additional fee for 501c3 tax exemption. In total, you should expect to pay anywhere between $300 – $687 or more, depending on eligibility. If you’re concerned about the costs, another option would be to join a fiscal sponsorship, which is an organization that has already attained 501c status and can take your cause under their wing. 

It is not difficult to start a nonprofit in Arizona. You’ll need to create a business plan to help you put your mission into perspective, get your paperwork in order and learn about the laws surrounding nonprofits in your state. Once the nonprofit is up and running, you’ll need to comply with federal and state laws to keep it in good standing. Refer to the IRS Compliance Guide for further information or refer to The National Council of Nonprofits.

No, nonprofits are not owned but founded. This is the one major difference between nonprofits and for-profits. While nonprofit organizations may raise funds or earn revenue, it must be cycled back into the organization. These funds must be used to serve the intended cause or purpose and not distributed to any member of the nonprofit corporation. When in doubt about the legalities of running a nonprofit, seek legal advice

A nonprofit organization is accountable to several entities, starting with the general public. Since the organization is formed to serve the greater good of the community, they are accountable to the general public. Nonprofits are also required to comply with state agencies’ rules and regulations and report to the IRS to maintain their tax-exempt status

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How to Start a Nonprofit in Arkansas https://www.chamberofcommerce.org/nonprofit/arkansas Thu, 24 Mar 2022 14:53:52 +0000 https://www.chamberofcommerce.org/?p=20193 Nonprofit organizations are created when an unmet need in the community has been identified. Nonprofits are not formed for personal gain, and all donations and money raised are placed back into the organization to fulfill and further the cause. Some of the benefits of starting a nonprofit include: Discounted postal rates Tax-deductible contributions Tax-exempt financing […]

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Nonprofit organizations are created when an unmet need in the community has been identified. Nonprofits are not formed for personal gain, and all donations and money raised are placed back into the organization to fulfill and further the cause.

Some of the benefits of starting a nonprofit include: 

  • Discounted postal rates
  • Tax-deductible contributions
  • Tax-exempt financing

When starting a nonprofit in Arkansas, it may take anywhere between two weeks to three months to get up and running. This is because you’ll need to wait for your 501c3 tax exemption before you can participate in fundraising activities. 

There are various types of nonprofits in the nonprofit sector. Some of the most well-known nonprofits in Arkansas are Safe Places Little Rock, WAL-MART ASSOCIATES IN CRITICAL NEED FUND, and Keep Kids Fire Safe Foundation

Arkansas has approximately 16,075 nonprofit organizations, and the numbers are continually growing. 

1. Select a name for your organization

One of the fundamental steps in getting your Arkansas nonprofit up and running is choosing a name for your corporation. Your nonprofit’s name is also its brand and the first thing that people will notice about your nonprofit. 

Therefore, thought must be put into the name of your organization. Additionally, the organization’s name must comply with Arkansas naming requirements and guidelines such   as:

  • It must be noticeably different from other existing organizations or business entities in the state of Arkansas
  • It must not mislead the public, and the purpose must be maintained as per the Articles of Incorporation
  • It should not include offensive terms
  • It does not need to include a designation like Inc, Incorporated, Ltd, or Company

Further guidance on choosing a name for your Arkansas nonprofit may be found on the Nonprofit Corporation Act – Section 401.

2. Nominate an Arkansas registered agent

All Arkansas nonprofits must appoint a registered agent. A registered agent is also referred to as a statutory or service of process agent. 

The main role of an Arkansas registered agent is to receive legal or official documents on the nonprofit’s behalf. 

You may appoint any individual as a registered agent, including yourself. However, they must meet the following requirements: 

  • The statutory agent must be a resident of the state of Arkansas
  • The registered agent must remain available during business hours
  • The service of process agent must be authorized to conduct business in the state

3. Recruit your board members

When running a nonprofit organization, you need to have an organizational structure in place to govern the operations of the corporation and ensure that all dealings are above board. This is why nonprofits need directors. 

Once the directors are recruited, they form a board of directors after coming together. The president, treasurer, and secretary are the officers that need to be nominated and are considered individuals with the authority to carry out certain functions on the nonprofit’s behalf.  

The board is formed by bringing together the directors and officers and ultimately creates the structure for your nonprofit in Arkansas. 

The structure of the Arkansas 501c3 corporation must include:

  • A treasurer
  • A secretary
  • A president
  • A minimum of three directors not related to each other

It is possible for one individual to hold more than one office.

4. Consent to bylaws and conflict of interest policy

As mentioned earlier, it is the responsibility of the board of directors to govern the Arkansas nonprofit according to rules that apply on a federal and state level. 

In order to do this, rules need to be put in place. These rules are referred to as the organization’s bylaws. The rules must be compiled when the board meets for the first time and are imperative for the nonprofit formation process. 

The person or persons creating the bylaws must be familiar with both federal and state law that oversees the operation of a tax-exempt corporation. 

Arkansas nonprofits are not required to file bylaws with the state, but a copy of the bylaws must be kept on file and used as the nonprofit’s internal operating manual. 

You’ll also need to provide a copy of the bylaws to the IRS website when applying for tax exemption. 

The only time the bylaws are not required is if you are applying for tax exemption using Form 1023-EZ, used by small businesses

Additionally, the nonprofit needs to have a Conflict of Interest policy. This policy is there to make sure that any and all decisions made by the board during board meetings are always in line with the nonprofit’s purpose or organization’s mission statement and not motivated by personal agendas.

5. Select an Arkansas nonprofit startup corporation structure

  • Mutual benefit corporations: This type of organization is similar to other mutual benefit organizations found in common law nations. These corporations may or may not choose to apply for state and IRS tax-exemptions.
  • Public benefit corporations: Public benefit Nonprofit organizations are developed for charity purposes and act as social welfare organizations. Public benefit organizations include religious and charitable organizations formed to bring about public and social good.
  • Mutual benefit common interest development corporations: These are the nonprofit formations created under the Davis Stirling Common Interest Development Act to administer common interest development, such as a homeowner’s association. 
  • Religious organizations/corporations: These nonprofit corporations are created solely for religious purposes, such as churches.

6. Prepare and file nonprofit Articles of Incorporation

All Arkansas nonprofits must file the articles of incorporation with the Arkansas Secretary of State.

This is also to ensure that you are eligible to apply for 501(c)(3) status. Therefore the Articles of Incorporation must contain the following statements:

  1. Purpose

The purpose of the nonprofit organization must be clearly stated in your Articles of Incorporation and must be limited to one of the following categories:

  • Preventing cruelty to animals/children
  • Religious
  • Charitable
  • Scientific
  • Testing for public safety
  • Literary
  • Fostering national/international amateur sports competition

File Form Form NPD-1-501c3, for Arkansas nonprofit Articles of Incorporation.

Additionally, you’ll need to include a dissolution that must state exactly what the nonprofit’s assets are going to be used for and what will happen to the assets if the nonprofit is dissolved.

Qualifying for 501(c)(3) status means that your organization must only be used to promote the purposes contained in the articles of incorporation and approved under section 501(c)(3).

For further reading and guidance, please refer to the sample IRS document. One of the quickest ways to file the Articles of Incorporation is online. You may also choose to download the form and submit it at the following address:

Arkansas Secretary of State

Business and Commercial Services

1401 West Capitol Ave, Ste. 250

Victory Building

Little Rock, AR 72201

7. File an initial report

Arkansas nonprofits are not required to file an initial report with the state.

8. Secure an EIN (Employer Identification Number)

An EIN is an Employer Identification Number. It’s basically a nine-digit number that the IRS allocates in order to identify your nonprofit corporation. Irrespective of the type of nonprofit you’re forming, the EIN is compulsory and doesn’t only apply to nonprofits planning on hiring employees. 

The EIN is useful when it comes to:

  • Opening a business bank account
  • Submitting 990 returns to the IRS
  • Applying for 501(c)(3) status
  • Hiring employees for your nonprofit

After forming your Arkansas nonprofit, apply for your EIN from the IRS, free of charge. The form required is IRS Form SS-4. You may choose to apply online, and if so, you’ll receive your EIN immediately. 

9. Apply for federal tax exemption

Nonprofit organizations in Arkansas are required to apply for federal tax exemption from the IRS. Nonprofit organizations in Arkansas are also regulated by the 501(c) chapter of the Internal Revenue Code, and, therefore, it is compulsory for organizations to apply for tax exemption or exemption from federal income tax

Some of the advantages of obtaining federal tax exemption in the state of Arkansas include:

  • Recognition for your nonprofit
  • Being exempt from various types of taxes, including sales, income, property, and payroll taxes
  • Postage rates that are discounted
  • Access to grants for your Arkansas nonprofit organization
  • Ability to give tax deductions to donors

You’ll need to complete IRS Form 1023 using the following instructions. Smaller nonprofits may use the streamlined application called Form 1023-EZ, using the following instructions

You may file these forms with the Internal Revenue Service. The ETA is under one month when filing Form 1023-EZ and between three to six months when filing Form 1023. For an Arkansas nonprofit to have eligibility to file for 501(c)(3) status, it must:

  • Have at least three directors who have no relation to each other
  • Adopt Conflict of Interest policy and Bylaws
  • Registered as a nonprofit with the state of Arkansas
  • Have an Employer Identification Number

Once you’ve met these conditions, you’re free to go ahead and apply with the IRS or file electronically via pay.gov

If the application is approved, you’ll be sent a determination letter by the IRS stating that the Arkansas organization has obtained tax-exempt status as per section 501(c)(3).

10. Apply for Arkansas state tax exemption

After applying for federal tax exemption and receiving your determination letter, the next step is applying for state income tax exemption. 

You’ll need to complete Form ARR1023CT to begin the process. The instructions for completing the form are important, so please read them prior to filling in the form. 

To successfully apply for state income tax exemption in Arkansas, you must send the following:

  • Submit a copy of the IRS determination letter 
  • A statement disclosing the nonprofit’s federal tax-exempt status
  • The first two pages of IRS Form 1023

If you do not have an IRS determination letter, you should:

  • Submit Form ARR1023CT
  • A copy of your Arkansas nonprofit Bylaws and Articles of Incorporation

To obtain sales tax exemption, you must:

11. Other applicable permits and licenses

Depending on the size and type of activities your nonprofit plans on running, you may need certain licenses and permits. Feel free to head over to the  Small Business Administration Business License & Permit look-up tool.

Additional state registration and reporting requirements

Depending on your nonprofit’s type,  activities, and size, you may need to register with the Arkansas Attorney General. Please refer to Arkansas’s attorney general website for additional rules and further guidance on Arkansas fundraising registration requirements.

12. Submit an annual report

Annual reports are required by all nonprofits in the state of Arkansas. The due date of the annual report in Arkansas is the 1st of August annually. Please refer to the Arkansas Secretary of State for the necessary forms. Once completed, you may submit your nonprofit’s annual report online.

Costs of starting a new nonprofit in Arkansas

  • Articles of Incorporation: $45-50
  • 501(c) Application for tax exemption filing fees: $275 or $600 IRS fee

Next steps

After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:

Open a business bank account

  • Maintain accounting and tax filing
  • Ensure that your personal assets are kept separate from your nonprofits’ assets

To open a bank account, you will need to provide:

  • Your EIN
  • A copy of your articles of incorporation
  • A copy of your organization’s bylaws

Hire a business accountant 

  • Simplify payroll and bookkeeping
  • Prevent your nonprofit from avoiding penalties and tax errors
  • Manage your nonprofit’s funding

Obtain insurance 

  • Focus on growing your nonprofit
  • Manage risks

You may opt for General liability, Personal liability, or Worker’s compensation insurance.

Build a website

As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals. 

Sign legal documents

One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit. 

If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:

  • State the registered name of your nonprofit
  • Use your name and signature
  • State your position/role in the organization as its authorized representative

When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual. 

Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing. 

FAQs

The main aspect in which nonprofits and for-profits differ is the existence of their overall purpose. Nonprofits are developed to meet a need in the community and are not intended for profit or monetary gain for its members. On the other hand, for-profits are developed to maximize profits and then allocate these profits to stakeholders and company owners.

Public charities are exempt charitable organizations such as churches, universities, colleges, hospitals, and medical research facilities. Public charities all have in common that they actively raise funds and receive contributions from various sources, unlike a private foundation that receives funds from one main source. The proceeds from fundraising are also used to further the cause of the charity. 

You should start by filing annual reports. You should also renew your registration annually in the state that the nonprofit is registered. Additionally, you must comply with all federal and state laws pertaining to tax exempt organizations to ensure that your organization is above board and remains a successful nonprofit. When in doubt, seek legal advice.

Yes, a business plan can help you put your plans and how you intend to meet or fulfill the nonprofit’s purpose into words. So a business plan can help others see your mission and access specific details that all go a long way in helping the nonprofit come along.

Charitable solicitation is just another way to say that you accept donations on your nonprofit’s behalf. In states like Arkansas, nonprofits must register for charitable solicitation to comply with state laws and keep their fundraising activities above board.

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How to Start a Nonprofit in Connecticut https://www.chamberofcommerce.org/nonprofit/connecticut Thu, 24 Mar 2022 14:53:51 +0000 https://www.chamberofcommerce.org/?p=20435 Connecticut is home to a total of 23,170 nonprofit organizations. Unlike for-profit corporations, nonprofits or public charities are intended to improve the quality of life for people on various levels. Therefore, nonprofits in Connecticut are not intended for financial gain but to meet an unmet need in the community and advance the public interest. Staring […]

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Connecticut is home to a total of 23,170 nonprofit organizations. Unlike for-profit corporations, nonprofits or public charities are intended to improve the quality of life for people on various levels. Therefore, nonprofits in Connecticut are not intended for financial gain but to meet an unmet need in the community and advance the public interest.

Staring a nonprofit corporation in Connecticut has many advantages like: 

  • Giving your organization credibility
  • Perpetual existence
  • Access to grants
  • Tax exemption
  • Discounted prices on postage services

Getting your Connecticut nonprofit up and running can take approximately two weeks to three months until 50c3 status is granted. While Connecticut has various types of nonprofits, some of the most successful existing organizations in Connecticut are Smart Kids With Learning Disabilities, Inc, HonorBound Foundation Inc, and Project Precious Rescue Inc. 

1. Select a name for your organization

After establishing the purpose of your nonprofit and what you hope to achieve, it’s time to decide on a name for the nonprofit corporation

The name of your organization must comply with Connecticut naming requirements and should preferably be a name that is easy to search. 

To establish whether the name is available or not, refer to the Connecticut Secretary of State – Commercial Recording Division name search

Additionally, the Connecticut nonprofit name must adhere to the following guidelines: 

It must include the word, Company, Incorporated, Inc, and Ltd

It should be different from any other company, organization, or business n the state of Connecticut.

If you plan on creating a website for your organization at some point, you may also want to check the web domain availability. 

2. Nominate a Connecticut registered agent

Your Connecticut nonprofit needs to nominate a registered agent. This is required by law

Registered agents serve an important purpose within the nonprofit structure: to accept legal documents and communications from the state on the organization’s behalf. 

You may appoint anyone as a registered agent, including the founder of the nonprofit or an employee of the organization. 

However, they must meet the requirements below: 

  • Must be a resident of Connecticut
  • Must have permission to conduct business in the state
  • Must be over 18
  • Must have a registered street address
  • Must remain available during business hours

3. Recruit your board members

Nonprofits in Connecticut are required to choose a Board of Directors. The Board of Directors would include a minimum of three directors and a few officers.

The role of the Board of Directors is to oversee the organization’s operations. In addition to choosing directors, the board will need officers to fulfill the roles of president, secretary, and treasurer. 

Each of these officers will have individual responsibilities and authorities within the organization.

Connecticut nonprofits must have an organizational structure that includes:

  • At least three directors who have no relation to each other
  • A president
  • A secretary
  • A treasurer

4. Consent to bylaws and conflict of interest policy

All Connecticut nonprofits that plan on applying for 501(c)(3) tax-exempt status will need to have two documents in order:

  1. Conflict of Interest Policy
  2. Bylaws

The Conflict of Interest Policy is made up of rules and regulations set aside to govern the organization in a fair and just manner. This policy ensures that all decisions that are taken by the board align with the organization’s mission and purpose instead of serving the personal agendas of the organization’s members. 

The Bylaws are a rundown of the rules under which the organization must abide, or in other words, the operating procedures of the Connecticut corporation. 

Both these documents must be compiled when the first board meeting takes place and when the officers and directors are appointed.

5. Select a Connecticut nonprofit startup corporation structure

  • Public benefit corporations: Public benefit NPOs are developed for charitable causes and act as social welfare organizations. Public benefit corporations involve religious and charitable organizations developed to bring about public and social good.
  • Mutual benefit organizations: These organizations are similar to other mutual benefit organizations found in common law nations. These corporations may or may not choose to exercise their right to apply for state and Internal Revenue Service tax-exemptions.
  • Mutual benefit common interest development corporations: These are the nonprofit formations created under the Davis Stirling Common Interest Development Act to administer common interest development, such as a homeowner’s association. 
  • Religious organizations/corporations: These nonprofit corporations are created solely for religious purposes, such as ministries.

6. Prepare and file nonprofit Articles of Incorporation

All Connecticut nonprofit organizations must create and file a nonprofit Certificate of Incorporation with the Connecticut Secretary of State. Some of the information required in your certificate of incorporation includes: 

  • Your nonprofit’s name 
  • Your nonprofit statement of purpose 
  • The address and name of your registered or statutory agent 
  • Specific provisions required for state and federal tax-exempt purposes 

You’ll find the nonprofit Certificate of Incorporation form or Form CIN-1-1.0, located on the Connecticut Secretary of State website. You may use this form to create a nonprofit corporation

Feel free to follow the instructions provided for the Certificate of Incorporation form, and once completed, you may submit the form online to the following mailing address:

Mailing address:

Commercial Recording Division

Connecticut Secretary of the State

P.O. Box 150470

Hartford, CT 06115-0470

When forming a nonprofit corporation in Connecticut, your articles need to include a minimum amount of information in order to have your nonprofit approved. 

However, the form does not include the language required by the Internal Revenue Service in order to qualify for federal tax exemption. To ensure that you have eligibility for 501c3 tax-exempt status, your articles need to include specific language as follows:

  • A declaration that your organization will not be engaging in prohibited political or legislative activity
  • A statement of purpose meeting Internal Revenue Service criteria
  • A statement disclosing what will happen to the nonprofit’s assets in the event of dissolution

For further reading and guidance, please take a look at the IRS website IRS publication 557

7. File an initial report

All Connecticut nonprofits must file an initial report after filing the nonprofit Certificate of Incorporation. 

The initial report must be filed with the Connecticut Secretary of State Commercial Recording Division using the Organization and First Report Form. The form should be completed and filed online

8. Secure an EIN (Employer Identification Number)

Nonprofit corporations in Connecticut must apply for an EIN. An EIN is an Employer Identification Number that allows you to manage your nonprofit’s finances effectively and also apply for federal and state tax exemptions. Aside from that, it makes certain aspects of running a nonprofit much easier, such as: 

  • Opening a business bank account
  • Submitting 990 returns to the IRS
  • Applying for 501(c)(3) status
  • Hiring employees for your nonprofit

After forming your Connecticut nonprofit, apply for a federal EIN, free of charge from the IRS. The form required is IRS Form SS-4. You may choose to apply online, and if so, you’ll receive your EIN immediately. 

9. Apply for federal tax exemption

After forming a nonprofit organization, you need to attain federal tax exemption.

In order to do this, you must file Form 1023 with the IRS. Form 1023 is the relevant application for recognition of exemption and this falls under section 501(c)(3) of the Internal Revenue Code.

Advantages of obtaining federal tax-exempt status in Connecticut include:

  • Nonprofit credibility
  • Exemption from income, sales, and property taxes
  • Eligibility for grants
  • Tax deductions for donors

If your nonprofit in Connecticut is a small business, you need to file Form 1023-EZ.

In order to be eligible to apply for federal income tax exemption, your Connecticut organization must meet the following requirements:

  • Adopt Conflict of Interest Policy and Bylaws
  • Nominate a minimum of three directors unrelated to each other
  • Have an EIN
  • Must be registered as a nonprofit with the state of Connecticut

Once your organization has met these conditions, go ahead and apply with the IRS or file electronically via pay.gov

After the application is accepted, you’ll receive a determination letter from the Internal Revenue Service. The determination letter will specifically state that your Connecticut nonprofit has obtained tax-exempt status or is an exempt organization

10. Apply for Connecticut state tax exemption

 After receiving your determination letter from the IRS, youR Connecticut nonprofit is automatically exempt from state sales taxes. 

However, you still need to make an application for exemption from state income tax with the Connecticut Department of Revenue Services

In order to apply, you’ll need to submit a copy of your Internal Revenue Service determination letter and complete and submit Form REG-1

11. Other applicable permits and licenses

Depending on the activities you plan on carrying out, certain licenses and permits may be required in the state of Connecticut. 

To confirm, please refer to Connecticut’s License Info Center (CLIC). Check the section titled: Starting a business checklist to determine whether you need a license to conduct nonprofit activities in the state of Connecticut.

Additional state registration and reporting requirements

If your goal is to raise funds and spearhead various fundraising activities, then you need to check with the Connecticut Attorney General before doing so. 

This is because there may be additional reporting and registration requirements for charitable solicitation for nonprofits in the state of Connecticut. The ideal way to ascertain this is to log on to the Connecticut Attorney General‘s website for additional rules and requirements.

12. Submit an annual report

Once a nonprofit is up and running, you’ll still need to comply with state rules and regulations. One of those requirements is submitting an annual report for your nonprofit in Connecticut. 

The annual report will need to be submitted to the Connecticut Secretary of State – Commercial Recording Division. The annual report is due by the registration anniversary date, and the only nonprofits that are exempt from annual reports are religious corporations and statutory trusts. 

Any member of the nonprofit may file the annual report as long as they have the authority to do so. The annual report for your Connecticut nonprofit may be filed online.

Costs of starting a new nonprofit in Connecticut

The following is a list of filing fees for nonprofits in Connecticut.

  • First Report: $50
  • Certificate of Incorporation: $50 + optional $50 expedite fee
  • Tax exempt status – 501(c): $275 or $600 IRS fee
  • Connecticut charitable registration: $50 ($0 if exempt)

Next steps

After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:

Open a business bank account

  • Maintain accounting and tax filing
  • Ensure that your personal assets are kept separate from your nonprofits’ assets

To open a bank account, you will need to provide:

  • Your EIN
  • A copy of your articles of incorporation
  • A copy of your organization’s bylaws

Hire a business accountant 

  • Simplify payroll and bookkeeping
  • Prevent your nonprofit from avoiding penalties and tax errors
  • Manage your nonprofit’s funding

Obtain insurance 

  • Focus on growing your nonprofit
  • Manage risks

You may opt for General liability, Personal liability, or Worker’s compensation insurance.

Build a website

As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals. 

Sign legal documents

One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit. 

If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:

  • State the registered name of your nonprofit
  • Use your name and signature
  • State your position/role in the organization as its authorized representative

When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual. 

Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing. 

FAQs

The National Council for Nonprofits is basically a trusted resource for charitable organizations and not private foundations in the United States. The council shares proven practices identify emerging trends, and assists people by promoting solutions that benefit charitable nonprofits and the communities they serve.

After starting a Connecticut nonprofit, you may choose to serve a certain position. In this case, you certainly can pay yourself a salary, within reason as long as it is reported to the Internal Revenue Service. Ultimately, the remuneration you are receiving must be comparable with other salaries and on par with similar organizations.

Nonprofits are not owned but founded. So while they have similarities with private organizations and may form partnerships with others that share the vision, they do not exist to make a profit. Therefore, your mission statement must explicitly state the purpose of your nonprofit. 

Once your nonprofit organization is up and running in Connecticut, you’ll still be required to maintain it. A part of maintaining a nonprofit includes knowing the: 

  • Filing fees and forms that need to be submitted 
  • Best practices needed in order to have a successful nonprofit corporation 
  • What’s required to solicit funds
  • Federal tax-exempt status requirements

The nonprofit compliance guide will help you understand what is required for your nonprofit to have a long and successful run.

Even if you plan on starting an organization in the nonprofit sector, you still need a business plan. This is because it lets possible donors know what you hope to achieve and ultimately join forces with you. 

So the business plan will help you meet your nonprofit’s goals and purpose much quicker. You should also seek legal advice before making any permanent decisions pertaining to your nonprofit, the same as you would do when starting a for-profit corporation.

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How to Start a Nonprofit in Delaware https://www.chamberofcommerce.org/nonprofit/delaware Thu, 24 Mar 2022 14:53:51 +0000 https://www.chamberofcommerce.org/?p=20455 The state of Delaware has approximately 8,144 nonprofit organizations. Among the most well-known Delaware NPOs are Faithful friends Inc, Myositis Support, and Understanding Association, and Delaware Financial Literacy Institute. Forming a nonprofit in any state provides various advantages. However, there are even more benefits to creating Delaware nonprofit organizations. Some of them include: Ease of […]

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The state of Delaware has approximately 8,144 nonprofit organizations. Among the most well-known Delaware NPOs are Faithful friends Inc, Myositis Support, and Understanding Association, and Delaware Financial Literacy Institute.

Forming a nonprofit in any state provides various advantages. However, there are even more benefits to creating Delaware nonprofit organizations. Some of them include:

  • Ease of formation
  • Amendments do not require approval from state agencies
  • No registration with the Delaware Attorney General required
  • Flexible governance
  • All 501c corporations are exempt from Delaware franchise and income tax

Getting your Delaware nonprofit up and running will take time, so expect to wait at least two weeks to three months for your 501c3 tax-exempt status. Follow our step-by-step guide to start your own nonprofit in Delaware.

1. Select a name for your organization

One of the most important steps in starting your Delaware nonprofit corporation is choosing a name for your organization. The name of your Delaware organization requires careful consideration as it is one of the first things that people learn about your nonprofit. 

Also, ensure that the name of your nonprofit corporation complies with Delaware naming requirements and may be easily found by members and anyone wanting to contribute towards your nonprofit’s cause.

So when choosing a name for the organization, keep the following naming guidelines in mind:

  • The name of the Delaware nonprofit must include an appropriate suffix, which will depend on the nature of your organization. Some of the possible suffixes include company, foundation, club, society, etc.
  • Your Delaware nonprofit name must also be easily distinguishable from other organizations and business entities in the state.

Further direction on naming your Delaware-based organization may be obtained from Delaware’s official naming guidelines. You may also conduct a name search on the State of Delaware – Division of Corporations website.

2. Nominate a Delaware registered agent

All Delaware nonprofit organizations are required to have a registered agent. The registered agent is also referred to as the service of process agent and accepts legal papers and documents on the Corporation’s behalf. 

Anyone may be nominated as a nonprofit’s registered agent provided they meet the following requirements:

  • The agent must have a physical street address in the state of Delaware(this should not be a PO Box address)
  • The agent must consent to the appointment
  • The agent must be over the age of 18
  • The agent must maintain normal office hours

In most states, one of the directors or officers is nominated as the initial agent. However, anyone may be selected as a registered agent, including yourself.

3. Recruit your board members

Any nonprofit corporation in the state of Delaware is required to elect a Board of Directors. The Board of Directors is made up of at least one director and any number of officers who will fulfill the roles of president, secretary, and treasurer. 

This should be done during the board’s first meeting, which is referred to as the board’s organizational meeting. Some of the actions that will be undertaken include:

  • Electing directors
  • Electing officers
  • Approving the bylaws
  • Consenting to preliminary transactions of the organization such as the opening of a business bank account
  • Determining an accounting period and tax year

4. Consent to bylaws and conflict of interest policy

Prior to filing the Certificate of Incorporation in Delaware, your nonprofit needs to have bylaws that comply with state law. Your nonprofit’s bylaws are basically the rules and procedures that the nonprofit is going to use for a number of tasks, including:

  • Holding board meetings
  • Electing officers and directors
  • Carrying out corporate formalities

Think of it as your nonprofit’s internal operating manual.

Next, your organization will need to compile a Conflict of Interest Policy. This policy ensures that all decisions taken by the board are in the nonprofit’s best interest and that decisions are not made to further the personal agendas of the Delaware nonprofit members. 

So your nonprofit needs both of these documents in order to file the Certificate of Incorporation. It does not need to be filed with the state but should be kept on file for the nonprofit’s use.

5. Select a Delaware nonprofit startup corporation structure

You’ll find two nonprofit organizational structure corporations in the state of Delaware. These are exempt and nonstock organizations. An exempt organization does not need to comply with Delaware’s annual franchise tax as the nonprofit is not subject to these requirements. 

In order to be exempt, the nonprofit must meet the requirements of 501b. Your nonprofit will qualify if it meets one or more of the following requirements: 

  • It is a civic organization 
  • It is exempt under the US Internal Revenue Code 501(c)(3) 
  • It is a charitable organization It is organized mainly for charitable or religious purposes 
  • It is listed in 8106a Title 9
  • It is not formed for profit, and none of the organization’s earnings will be distributed to any member of the organization

 If your Delaware nonprofit does not qualify for the exemption, the next best option is to file as a nonstock nonprofit organization.

6. Prepare and file nonprofit Articles of Incorporation

Your Delaware nonprofit organization will need to file a Certificate of Incorporation with the Delaware Department of State – Division of Corporations. You’ll need to file the Certificate of Incorporation correctly, and these instructions taken from the corpfiles.delaware.gov website will help you do that. 

This must be done so that your organization will have eligibility for 501(c)(3). Additionally, your Certificate of Incorporation must contain the following statements:

  1. Purpose

The nonprofit’s purpose must be clearly stated and also limited to one or more of the below categories:

  • Religious
  • Scientific
  • Charitable
  • Literary
  • Educational
  • Preventing cruelty to animals and children
  • Fostering national or international amateur sports competition
  • Testing for public safety
  1. Dissolution

Your nonprofit will need to raise funds to further its cause. These funds, together with any tools or equipment needed to run the organization, are your nonprofit’s assets. 

Your dissolution must state what the assets are used for and what happens to the assets in the event of dissolution. 

Please refer to the following sample IRS document taken from the IRS website to read more on this.

7. File an initial report

Delaware nonprofits are not required to file an initial report with the Delaware Secretary of State.

8. Secure an EIN (Employer Identification Number)

Obtaining an EIN is another step in the process of forming a Delaware nonprofit corporation. It’s a unique nine-digit code that is allocated by the Internal Revenue Service and essentially identifies your organization. 

Irrespective of the different types of nonprofits, all Delaware nonprofits are required to apply for this number irrespective of whether you plan on hiring employees or not. The EIN or employer identification number will be required when you open a bank account, submit 990 returns to the IRS, and apply for 501(c)(3) tax-exempt status

You may apply for your employer identification number using IRS Form SS-4 and submit it online.

9. Apply for federal tax exemption

Every Delaware nonprofit corporation will need to apply for 501(c)(3) federal tax-exempt status. Obtaining tax exemption has various benefits, including:

  • Access to grants
  • Discounted US postal rates
  • Tax deductions for donors
  • Tax exemption from property, sales, and federal income tax

All nonprofits or public charities must file Form 1023 with the IRS under the Internal Revenue Code. Small businesses organizations in the nonprofit sector may file Form 1023-EZ. This form is necessary if your nonprofit is not expected to earn more than $50,000 for the first three years.

To be eligible to apply for tax exemption, the Delaware nonprofit must meet the following requirements below:

  • Have an EIN
  • Nominate no less than one director
  • Be registered as a nonprofit with the state of Delaware
  • Adopt both the Bylaws and Conflict of Interest Policy

A determination letter will be sent to you once your 501c3 status is granted.

10. Apply for Delaware state tax exemption

Once your Delaware nonprofit corporation has obtained 501(c)(3) tax-exempt status from the Internal Revenue Service, the organization is automatically exempt from corporate income tax. 

Additionally, your Delaware corporation is also exempt from sales tax. Further benefits include exemption from various local and state property taxes and business license fees.

11. Other applicable permits and licenses

Delaware NPOs who have their determination letter do not need to apply for permits and licenses to run the nonprofit in the state of Delaware.

Additional state registration and reporting requirements

All nonprofits in Delaware are exempt from state reporting and registration requirements. This basically means that your nonprofit does not need to register to raise funds in the state, and there are no fundraising registration requirements. 

However, suppose you plan on receiving charitable solicitation in other states. In that case, you need to check with the reporting obligations in those specific states prior to accepting donations on the nonprofit’s behalf.

12. Submit an annual report

Your Delaware nonprofit must file an annual report with the Delaware division of corporations. You’ll need to submit the annual report by the 1st of March each year, and it may be filed online. The notification of annual reports is sent to all Delaware statutory agents in the month of December every year.

Costs of starting a new nonprofit in Delaware

The following filing fees are required by nonprofits in Delaware:

  • Certificate of Incorporation: $89 + $9 for extra pages + optional $50-$1000 expedite fee
  • Tax exemption 501(c): $275 or $600 IRS fee

Next steps

After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:

Open a business bank account

  • Maintain accounting and tax filing
  • Ensure that your personal assets are kept separate from your nonprofits’ assets

To open a bank account, you will need to provide:

  • Your EIN
  • A copy of your articles of incorporation
  • A copy of your organization’s bylaws

Hire a business accountant 

  • Simplify payroll and bookkeeping
  • Prevent your nonprofit from avoiding penalties and tax errors
  • Manage your nonprofit’s funding

Obtain insurance 

  • Focus on growing your nonprofit
  • Manage risks

You may opt for General liability, Personal liability, or Worker’s compensation insurance.

Build a website

As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals. 

Sign legal documents

One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit. 

If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:

  • State the registered name of your nonprofit
  • Use your name and signature
  • State your position/role in the organization as its authorized representative

When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual. 

Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing. 

FAQs

While lots of people on the misconception that only for-profit organizations need a business plan, the reality is that you need a business plan for your Delaware nonprofit as well. A business plan lays out your vision for the nonprofit organization and helps others understand what you hope to achieve by running a nonprofit. This is why your business plan should also include your organization’s mission statement to help possible donors understand the cause. 

Whether you choose to start a new nonprofit organization in Delaware or join existing organizations will depend on your cause. In some cases, there may not be any other existing organizations fulfilling the purpose you hope to meet, so you won’t be able to participate in partnerships or fiscal sponsorships. In that case, it’s better to start your own nonprofit corporation.

The founder of a nonprofit organization in Delaware may pay themselves a fair salary for the time and effort put into running the organization. Additionally, nonprofit founders may hire full or part-time employees and also pay them for their time and service. However, all salaries must be disclosed to the IRS.  

If you don’t have the required funds to start a nonprofit organization in Delaware, here are a few tips to help you raise money. Recruit a Board of Directors who will give the organization: 

  • Credibility within the community
  • Act as a fundraising vehicle to bring in donors and funds itself 
  • Create contacts for fundraising and finding funders

The role of an executive director within a nonprofit is to provide the board with the advice and resources required to bring about change and promote growth. Some of the responsibilities of the executive director is to select the board members and also act as an intermediary between the staff and the board.

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How to Start a Nonprofit in Illinois https://www.chamberofcommerce.org/nonprofit/illinois Thu, 24 Mar 2022 14:53:50 +0000 https://www.chamberofcommerce.org/?p=21173 Nonprofit organizations arise for dozens of purposes. However, they are not designed to line people’s pockets. Nonprofit organizations aim to raise money to further their mission and help people in need live an improved quality of life. Some of the benefits of starting a nonprofit organization include: Acquiring separate entity status U.S. Postal Service discounts […]

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Nonprofit organizations arise for dozens of purposes. However, they are not designed to line people’s pockets. Nonprofit organizations aim to raise money to further their mission and help people in need live an improved quality of life.

Some of the benefits of starting a nonprofit organization include:

  • Acquiring separate entity status
  • U.S. Postal Service discounts
  • Credibility

Setting up a nonprofit organization in Illinois is not an overnight process. It could take anywhere from 1 to 6 months after filing before receiving a determination letter, also known as a tax-exempt status from the IRS. 

Illinois has approximately 22,743 nonprofit organizations. Some well-known nonprofits in the state include Gift of Adoption Fund Inc., Critter Camp Exotic Pet Sanctuary, and The Chicago Coalition for the Homeless.

1. Select a name for your organization

Your nonprofit’s name is also its brand and must meet Illinois state requirements. The organization name also needs to be completely different from any business or entity operating in the state of Illinois

. It, therefore, cannot contain words that denote established political parties, such as “Democrats,” “Republican,” or “Democratic.” Additionally, a 90-day name reservation is also available or a fee of $25.

Furthermore, the name of your nonprofit should contain the word “incorporated” or “corporation” or, at the very least, abbreviations like “Corp.” 

Additionally, the name of the nonprofit in Illinois must include the letters “NFP” at the end of the name, more so if the name of the organization suggests that the nonprofit is designed for any other purpose other than what is laid out in the Non-for-profit Corporation Act. 

Head over to the Illinois General Assembly’s official guidelines for guidance on how to choose a name for your nonprofit in Illinois. 

2. Nominate an Illinois registered agent

A registered agent is an individual who is a designated point of contact for the Illinois nonprofit. This individual will be responsible for receiving official mail, legal documents, and notices on behalf of the nonprofit.

Anyone within your nonprofit organization, including yourself, may be nominated as a registered agent; however, the individual must meet specific requirements:

  • Must be physically located in Illinois: The registered agent must be physically located in Illinois with an Illinois street address and not a P.O. box address. 
  • Have a physical office: The Illinois agent must be available at the listed street address. 
  • Maintain office hours: The registered agent must make themselves available during normal business hours to receive any and all documentation on the nonprofit’s behalf. 

3. Recruit your board members

When choosing directors and officers for your nonprofit, you need to know Internal Revenue Service and residency requirements. 

Directors are the governing body, cabinet, or management of your nonprofit, and the officer is responsible for keeping the minutes of the organizational meetings held between directors and members. 

Directors in Illinois need to be 18 years or older, and no residency or membership is required. The Board of Directors nominates the officer, and the same person may hold two or more offices. 

4. Consent to bylaws and conflict of interest policy

In order to complete your Illinois nonprofit organization’s application, recognition of exemption under section 501(c)(3) of the internal revenue code is required. The application form needed to start the process is Form 1023.

Two documents are required for a successful outcome:

  1. The first document is a bylaws document that acts as the nonprofit operating manual and basically outlines the operating procedures and so forth.
  2. The conflict of interest policy is the second document and is basically a collection of rules put in place to ensure that all decisions made ultimately benefit the nonprofit organization and not individual members’ personal agendas.

The bylaws do not need to be filed with the Illinois Secretary of State; however, they must be kept on file for your internal operating purposes.

5. Select an Illinois nonprofit startup corporation structure

There are four corporate structures for nonprofits in Illinois as follows:

  • Public benefit corporations: These nonprofits are created for charity purposes, act as a social welfare organization or civic league.
  • Religious corporations: These nonprofits are solely for religious purposes, such as a church.
  • Mutual benefit corporations: These nonprofits may or may not pursue state and IRS tax-exemptions. 
  • Mutual benefit common interest development corporations: These nonprofits are created under the Davis Stirling Common Interest Development Act to oversee common interest development, such as a homeowner’s association. 

6. Prepare and file nonprofit Articles of Incorporation

Your nonprofit articles of incorporation earmark the creation of your organization. It documents when and where the organization was developed and captures pertinent information to verify the nonprofit’s existence.

Complete Form NFP 102.10 to file your Articles of Incorporation with the state

That said, the IRS will look for a few introductory provisions when vetting your 501(c)(3) tax exemption application, so you must meet both the state of Illinois’ requirements and IRS requirements to avoid unnecessary amendments or your application declined. 

Here’s what your nonprofit articles of incorporation should state explicitly: 

  • Purpose: Your nonprofit must be limited to one or more of the following categories: Religious, Charitable, Scientific, Literary, Educational, Testing for pubic safety, Preventing cruelty to children or animals. 
  • Dissolution: Here you’ll need to state the purpose of the organizations’ assets and the consequences of dissolved assets. 

Additionally, to get your 501(c)(3) tax exemption in order, you should use your nonprofit’s assets solely for the purposes sanctioned under section 501(c)(3). 

If you have intentions of applying for tax-exempt status, certain allowable purposes will not qualify as exempt purposes by the IRS. That said, ensure that you understand the IRS 501(c)(3) requirements and refer to the specific tax-exempt language required by the state of Illinois.

The provisions required for 501(c)(3) eligibility can be found in this sample IRS document

While some states require you to publish your articles of incorporation, the Illinois department of state does not require you to do so. 

7. File an initial report

Nonprofit organizations in Illinois are not required to file an initial report.

8. Secure an EIN (Employer Identification Number)

An Employer Identification Number is also referred to as a Federal Tax Identification Number or Federal Employer Identification Number. It is a nine-digit number assigned by the IRS to identify your nonprofit or business entity. You can think of it as a social security number for your nonprofit. 

While many people believe that only nonprofits who plan to hire employees need an EIN, all nonprofit organizations will need to apply for it.  An EIN can be used to open a business bank account, submit 990 tax returns to the IRS, and apply for your 501(c)(3) compliance. 

The form needed for your EIN is the IRS Form SS-4, and you may send the completed form back via phone, fax, mail, or online. 

The ETA when using the online or phone method is almost instantaneous, while the fax option will take four working days, and the mail option will have you waiting anywhere between 4-5 weeks. 

Please head over to this Understanding Your EIN document to guide you further.

9. Apply for federal tax exemption

While the process of applying for 501(c)(3) tax exemption may seem daunting, to say the least, the advantages that come along with obtaining tax exemption are numerous. 

501(c)(3) compliance benefits:

  • Having recognition, and credibility for your nonprofit
  • Being exempt from IRS state income tax, federal, Illinois sales, payroll, and property taxes (more information can be found on the Illinois Department of Revenue website)
  • Eligibility for grants on local, state, and federal levels. Lots of funders will only consider an application if you are registered as a 501(c)(3) entity and have your 501(c)(3) certificate to prove this.
  • Allows you to give tax deductions to donors when they donate to your nonprofit
  • A nonprofit or exempt organization in Illinois may qualify for nonprofit mailing privileges, such as discounted postage rates.
  • Media outlets are also inclined to give discounted and even free announcements and press releases for nonprofits. Simply show them your 501(c)(3) certificate or tell them that you are 501(c)(3) compliant, and they will gladly make a public service announcement on your behalf.

These are just some of the benefits of being 501(c)(3) certified, and it is in your organization’s best interest to find out how this compliance can help your nonprofit save money and grow from strength to strength.

Now that you are aware of the benefits of obtaining a federal tax-exempt status, you’ll need to know how to qualify for it. 

Here are the pre-requisites for federal tax exemption eligibility:

  • The nomination of 3 directors, unrelated to each other
  • Adopt bylaws and conflict of interest policy
  • File articles of incorporation
  • Have an EIN

Once you’ve fulfilled the requirements mentioned above, you may go ahead and file the 1023 form and apply for your nonprofit’s 501(c)(3) tax-exempt status. However, if you plan on running a smaller organization or expect your nonprofit’s gross income to be under $50,000 over the next three years, you can fill out the form 1023-EZ instead. 

A determination letter will be sent to you stating the outcome of the application for exemption from federal taxes.

10. Apply for Illinois state tax exemption

When filing for tax-exempt status, the laws vary from state to state. As per Illinois law, nonprofit corporations or Division of Corporations are automatically exempt from Illinois corporate income tax. The only exception here is if your organization has “unrelated business or trade income.”

As a resident of the state, your Illinois nonprofit corporation automatically meets the requirements for sales tax exemption. 

Additionally, your nonprofit may acquire a Consumer’s Certificate of Exemption(valid for five years) to gain sales tax exemption on business services and items used in the organization’s not-for-profit activities. In this case, you’ll need to complete the application form dr-5. 

11. Other applicable permits and licenses

If you plan to get involved in fundraising for your Illinois nonprofit, you need to register for charitable solicitation. The process for applying for charitable solicitation is as follows: 

  • Complete Form C0-1 with the Illinois Attorney General’s office – Charitable Trust Bureau
  • Submit a list of the organization’s directors and officers
  • Attach Form 1023 or 1024
  • Paying a filing fee of $15 

Additional state registration and reporting requirements

If you plan to get involved in fundraising for your Illinois nonprofit, you need to register for charitable solicitation. The process for applying for charitable solicitation is as follows: 

  • Complete Form C0-1 with the Illinois Attorney General’s office – Charitable Trust Bureau
  • Submit a list of the organization’s directors and officers
  • Attach Form 1023 or 1024
  • Paying a filing fee of $15 

12. Submit an annual report

Nonprofits in Illinois are required to submit a yearly report at the end of each calendar year to the Illinois Secretary of State, Department of business, in Springfield, IL.

The relevant forms needed to submit annual reports are found on the Illinois Attorney General’s website.

Additionally, it’s a great way to show donors how your nonprofit has reached its goals. 

Start your nonprofit’s first year by identifying its target market, your team, and your fundraising goals so you can make the most of donor outreach, community partnerships, and volunteer recruitment. 

Costs of starting a new nonprofit in Illinois

The costs of starting a nonprofit will vary from state to state. Below we’ve listed the costs of starting a 501(c)(3) in the state of Illinois:

  • Articles of Incorporation: $50 by mail or $77.75 online + optional $100 expedite fee
  • Form REG-1: varies based on state tax accounts
  • 501(c): $275 or $600 IRS fee
  • Illinois Charitable organization Registration: $15

Next steps

After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:

Open a business bank account

  • Maintain accounting and tax filing
  • Ensure that your personal assets are kept separate from your nonprofits’ assets

To open a bank account, you will need to provide:

  • Your EIN
  • A copy of your articles of incorporation
  • A copy of your organization’s bylaws. 

Hire a business accountant 

  • Simplify payroll and bookkeeping
  • Prevent your nonprofit from avoiding penalties and tax errors
  • Manage your nonprofit’s funding

Obtain insurance 

  • Focus on growing your nonprofit
  • Manage risks

You may opt for General liability, Personal liability, or Worker’s compensation insurance.

Build a website

As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals. 

Sign legal documents

One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit. 

If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:

  • State the registered name of your nonprofit
  • Use your name and signature
  • State your position/role in the organization as its authorized representative

When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual. 

Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing. 

FAQs

You don’t need to be a US citizen or resident in order to start a nonprofit corporation in the United States of America. However, in most cases, the costs involved in starting a nonprofit outweigh the potential benefits. This and the process of applying for a nonprofit organization discourages many people from starting nonprofits.

The cost of a 501(c)(3) is approximately $600 as of 2021. Your nonprofit’s income will not affect this figure, and it is nonrefundable. There is also no way to waive this fee, so it is compulsory.

You’ll need the following paperwork to get your Illinois nonprofit up and running: Form NFP 102.10, IRS Form SS-4, IRS Form 1023, IRS Determination Letter, Form REG-1, Illinois Sales Tax Exemption letter of request, Form CO-1, and URS Charitable Registration.

Starting a nonprofit without any money is not an option. However, there are ways that you can raise money to start a nonprofit organization. One of those ways is to start a crowdfunding account to make people aware of the need in the community and how you plan on fulfilling it.

There are a few necessary steps to starting a nonprofit organization in Illinois. You’ll need to compete and file articles of incorporation, bylaws and hold an official meeting with your Board of Directors. You’ll also need to apply for an employer identification number, federal and state tax exemption, register as a charity, and keep your nonprofit in line with annual compliance requirements.

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How to Start a Nonprofit in Iowa https://www.chamberofcommerce.org/nonprofit/iowa Thu, 24 Mar 2022 14:53:49 +0000 https://www.chamberofcommerce.org/?p=21222 When a group of people comes together to help others, it could be considered a nonprofit organization. Ultimately, any group that has a primary goal to serve the community and work and promote a social course is considered a nonprofit organization and not a for-profit company. Aside from the group pursuing their passion and having […]

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When a group of people comes together to help others, it could be considered a nonprofit organization. Ultimately, any group that has a primary goal to serve the community and work and promote a social course is considered a nonprofit organization and not a for-profit company.

Aside from the group pursuing their passion and having positive community involvement, starting a nonprofit organization in Iowa comes with various benefits such as:

  • Limited Liability
  • Access to Clients
  • tax-exempt organization status
  • tax-deductible contributions

The state of Iowa has approximately 26,361 existing organizations in the nonprofit sector; among those are well-known nonprofits like Children’s Cancer Connection, Animal Lifeline of Iowa, and EVERYBODY WINS-IOWA INC. 

It could take anywhere between two weeks to three months to start your Iowa nonprofit organization, provided you complete the necessary forms and file them with the Iowa Secretary of State.

The following step-by-step guide will give you an idea of what to expect when starting a nonprofit in Iowa.

1. Select a name for your organization

One of the first steps in starting an Iowa nonprofit organization is deciding on a name for your nonprofit. The nonprofit organization‘s name in Iowa must give the public an idea of the organization’s purpose or cause. 

Additionally, it must not come into conflict with any other business name registered in the state. The name should also not imply that it is intended for any other purposes other than what is approved or allowed in the Articles of Incorporation.

To ensure that the name you’ve decided on is actually available in the state, perform a name search on the Iowa Secretary of State‘s website.

You may also choose to read the revised Iowa Nonprofit Corporation Act, which contains further rules on naming an Iowa-based corporation.

2. Nominate an Iowa registered agent

After deciding on a name for your Iowa nonprofit, you’ll need to decide who will be your business’s point of contact with the state. Your business point of contact with the state is referred to as a registered agent. 

This individual or business entity will be required to accept legal notices on behalf of the nonprofit organization. You may appoint anyone as a registered agent; however, the individual or business entity must meet the following requirements:

  • They must be physically located in the state of Iowa
  • They must have a physical street address in the state of Iowa
  • They must be at least 18 years of age
  • They must maintain regular business hours
  • They must consent to the appointment

You may appoint anyone as a registered agent, including yourself.

3. Recruit your board members

The next step in the process of starting your Iowa nonprofit is recruiting your board of directors and officers. 

In the state of Iowa, you’ll need to appoint an individual who must meet the following requirements:

  • Must be an individual and not a business entity
  • Does not need to be a resident of Iowa
  • Does not need to be a member of the nonprofit
  • Must be willing to serve a one year term as a director

Iowa officer requirements are as follows:

  • The board of directors must appoint a president, secretary, and treasurer
  • One of the officers must prepare minutes of all board meetings held by the nonprofit and also authenticate the nonprofit’s records
  • The same person may hold two or more offices

Additionally, Iowa nonprofits must appoint an incorporator for the nonprofit. This individual is responsible for signing the Articles of Incorporation.

You may or may not choose to appoint an executive director

4. Consent to bylaws and conflict of interest policy

When applying for federal tax exemption, your nonprofit organization will need to be eligible for this application. One of the requirements is that your Iowa nonprofit adopts Bylaws and the Conflict of Interest policy.

Your Bylaws is basically a document describing how your nonprofit organization is going to be managed. It’s more or less an operating manual for your nonprofit organization, and it needs to be consistent with the nonprofit’s Articles of Incorporation and comply with the law.

The Bylaws will need to be adopted during the board’s first meeting, and from then on, it needs to be used as a roadmap for the nonprofit’s activities.

The Conflict of Interest policy is basically a collection of the nonprofit’s rules to abide by. Ultimately it makes sure that none of the decisions are made to further the personal agendas of members but always in the best interest of the nonprofit organization.

5. Select an Iowa nonprofit startup corporation structure

The state of Iowa consists of various types of nonprofits or organizational structures, but they usually fall under one or more of the following categories: 

  • Religious organizations/corporations: These nonprofits are solely for religious purposes, such as synagogues and churches.
  • Mutual benefit common interest development corporations: These are the nonprofit formations created under the Davis Stirling Common Interest Development Act to administer common interest development, such as a homeowner’s association. 
  • Public benefit corporations: Public benefit NPOs are created for charitable purposes and are the most common type of nonprofit. They are meant to benefit a segment of the public or a specific community. 

Some of the types of charitable organizations that fall into this category are educational programs, social services, and artistic endeavors.

  • Mutual benefit corporations: This type of nonprofit corporation is a type of organization similar to other mutual benefit corporations found in common law nations. They work for the greater good of a select group and not the general public. 

Mutual-benefit corporations normally raise money by charging their members annual or monthly dues. The funds are then used to benefit the paying members. Unions are an example of a mutual benefit organization. These corporations may or may not opt for state and IRS tax-exemptions.

6. Prepare and file nonprofit Articles of Incorporation

The next step in registering your nonprofit organization in Iowa is to file Articles of Incorporation. The Articles of Incorporation must include two parts:

  1. Purpose

The purpose for which the organization is being formed must be stated explicitly and also limited to one of the following categories: 

  • Testing for public safety
  • Preventing cruelty to animals or children
  • Fostering national/international amateur sports competition
  • Literary
  • Educational
  • Scientific
  • Religious
  • Charitable
  1. Dissolution

The articles must clearly state how the corporation’s assets are going to be utilized and what will happen to the assets in the event of dissolution. 

* The assets of the nonprofit may only be used for purposes approved under section 501c3.

The articles will need to include information about when and where the organization was formed, including details about the registered agent, board of directors, whether the nonprofit has members, and so on. 

Additionally, the IRS will be on the lookout for some basic provisions, such as specific language. So feel free to customize your articles to your nonprofit and ensure that all state and Internal Revenue Service requirements are met. 

There are no Articles of Incorporation forms or a template offered by the state and you’ll need to compile your own document.

Also, see the Revised Iowa Nonprofit Corporations Act to assist you in compiling articles that will be approved. After filing the articles online with the Iowa Secretary of State, you’ll receive a certificate of acknowledgment.

7. File an initial report

Initial reports are not required in the state of Iowa.

8. Secure an EIN (Employer Identification Number)

The Iowa nonprofit organization will need to apply for an EIN. An EIN is an Employer Identification Number and works as a Social Security number that the IRS uses to identify a business entity in the state. 

The EIN is also useful in several instances such as:

  • Opening a business bank account for your Iowa nonprofit
  • Applying for tax exemption in Iowa
  • Submitting 990 returns to the Internal Revenue Service
  • Hiring nonprofit employees

To apply for your employer identification number, use IRS Form SS-4. You may apply for an EIN online via the IRS website, and if so, it is issued immediately. You should also note that the Internal Revenue Service website is available during certain hours. 

Therefore, you should print your EIN prior to closing your session. More guidance on obtaining an EIN for your Iowa nonprofit can be found by reading through the IRS pub 1635: Understanding your EIN document.

9. Apply for federal tax exemption

In order to have your Iowa nonprofit up and running, you need to apply for a 501c3 tax exemption with the Internal Revenue Service

The benefits of obtaining tax exemption include access to grants and growing your organization’s fundraising success, all while being exempt from IRS federal income tax.

When applying for 501(c)(3) tax exemption for public charities, you will need to file Form 1023. Form 1023-EZ is a shorter and simpler application form that is also processed quicker and intended for small business organizations.

The instructions for Form 1023 and instructions for Form 1023-EZ may be found on the IRS website and will assist you in accurately completing both these forms. 

Prior to completing these forms, you’ll need to review the criteria for each application and ensure that you meet the eligibility requirements set out by the IRS as per Internal Revenue Code.

Once your application has been accepted, your Iowa nonprofit will receive a determination letter from the IRS stating that your corporation has obtained tax-exempt status from federal income tax

10. Apply for Iowa state tax exemption

In the state of Iowa, nonprofits that have received their IRS Determination letter are automatically exempt from Iowa income tax. Additionally, Iowa nonprofits that have received a determination letter are also exempt from state sales taxes.

11. Other applicable permits and licenses

Legally operating a nonprofit organization in any state means that you need to secure the relevant licenses and permits. The Small Business Administration Business License & Permit look-up tool is useful in determining exactly that.

Additionally, Iowa nonprofits that plan on conducting raffles, bingo, and other charitable games need to register with the Iowa Department of Inspections & Appeals – Social and Charitable Gambling Unit.

Additional state registration and reporting requirements

The good news is that charitable solicitation registration is not a requirement under Iowa state law.

12. Submit an annual report

Any registered nonprofit organization in the state of Iowa or any other organization authorized to transact business within the state is liable to file a Biennial Report with the Secretary of State between the 1st of January and the 1st of April of each odd-numbered year. 

The Biennial report notice will be sent to the nonprofit’s registered agent, and there is no filing fee for the Nonprofit Corporation Biennial Report.

Costs of starting a new nonprofit in Iowa

The below filing fees apply to all nonprofit organizations in Iowa:

  • Articles of Incorporation: $20
  • Tax exemption 501(c): $275 or $600 IRS fee
  • Iowa Business Tax Registration: varies based on tax accounts/licenses

Next steps

After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:

Open a business bank account

  • Maintain accounting and tax filing
  • Ensure that your personal assets are kept separate from your nonprofits’ assets

To open a bank account, you will need to provide:

  • Your EIN
  • A copy of your articles of incorporation
  • A copy of your organization’s bylaws

Hire a business accountant 

  • Simplify payroll and bookkeeping
  • Prevent your nonprofit from avoiding penalties and tax errors
  • Manage your nonprofit’s funding

Obtain insurance 

  • Focus on growing your nonprofit
  • Manage risks

You may opt for General liability, Personal liability, or Worker’s compensation insurance.

Build a website

As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals. 

Sign legal documents

One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit. 

If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:

  • State the registered name of your nonprofit
  • Use your name and signature
  • State your position/role in the organization as its authorized representative

When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual. 

Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing. 

FAQs

​A nonprofit’s mission is basically its mission statement and describes the organization’s unique and fundamental purpose. Ultimately, nonprofit organizations are required to create a mission statement to communicate the value that the organization delivers and what unmet need it plans on fulfilling. The mission statement is usually a part of your business plan and should include why a nonprofit exists, whom it seeks to serve and how it seeks to serve the disadvantaged group.

The Compliance guide for 501(c)(3) tax exemption of the Internal Revenue Code is basically a document providing guidelines on how nonprofits can obtain 501(c)(3) tax-exempt status. This document is essential as it will help you avoid getting your application returned or, worse, denied. So feel free to peruse the compliance guide prior to putting in your application for tax exemption.

An Iowa nonprofit needs not apply or register for charitable solicitation. This means that you won’t need to submit any paperwork or documentation in order to raise funds to meet your nonprofit’s purpose. However, while this rule is applicable to the state of Iowa, you should check with other states if you plan on accepting donations from other state residents, as the laws tend to vary from state to state.

​When a nonprofit organization offers its tax-exempt and legal status to other groups who haven’t as yet registered their nonprofit, it’s referred to as fiscal sponsorship. Essentially, it’s a partnership between a tax-exempt nonprofit and one that is still on its way to being tax-exempt. If you are still starting your nonprofit organization and would like all of the credibility of tax-exempt status, feel free to partner with an existing organization registered with the IRS to help further your nonprofit’s cause. 

​Starting a nonprofit organization is not easy as there are several steps involved in the process. However, if you are passionate about your cause, it is definitely worth all the fuss. Ultimately, running a successful nonprofit organization means having all of your paperwork in order and remaining committed to your cause. Additionally, you’ll need to make the nonprofit organization a top priority at all times and ultimately look for new and innovative ways to bring in funds and fulfill the unmet need in the community.

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How to Start a Nonprofit in Alaska https://www.chamberofcommerce.org/nonprofit/alaska Thu, 24 Mar 2022 14:53:49 +0000 https://www.chamberofcommerce.org/?p=20156 Alaska has approximately 5,802 successful nonprofit organizations. The most popular of these are Beans Cafe Inc, Community Pregnancy Center, and Brave Heart Volunteers.  Nonprofit organizations are formed to fulfill unmet needs in the community. These nonprofit corporations exist to serve the organization’s mission and are not intended for monetary gain. Therefore, all proceeds from goods […]

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Alaska has approximately 5,802 successful nonprofit organizations. The most popular of these are Beans Cafe Inc, Community Pregnancy Center, and Brave Heart Volunteers

Nonprofit organizations are formed to fulfill unmet needs in the community. These nonprofit corporations exist to serve the organization’s mission and are not intended for monetary gain. Therefore, all proceeds from goods and services sold are placed back into the organization. Some of the advantages of starting a nonprofit corporation are:

  • Remaining in existence long after founders leave
  • Tax-exempt status
  • Protection from personal liability
  • Grants eligibility

In order to receive your 501c3 tax-exempt status and have your organization up, and running will take anywhere between 2 weeks to 3 months in Alaska. Here’s how to go about starting a nonprofit in Alaska.

1. Select a name for your organization

There are many steps to starting a nonprofit organization in Alaska. One of the first steps is ruling out a for-profit organization. The next step is to name your nonprofit corporation. The name of the nonprofit must comply with Alaska naming requirements and should also be easily searchable by potential donors and members. 

Additionally, the name of your nonprofit must meet the following requirements: 

  • Your nonprofit’s name must include the appropriate designation, such as corporation, incorporated and unincorporated
  • It should not contain any words that may be considered a violation of local laws
  • It should not contain words like “engineer” unless your organization has the appropriate license
  • The name of your nonprofit should also not suggest that it is created for any other purpose other than what is described in the Articles of Incorporation
  • Must be distinguishable from other businesses in the state

Refer to the Department of Commerce’s official guidelines on naming your Alaska nonprofit. To check the availability of the name, go to the Alaska Secretary of State or the state of Alaska website and perform a name search.

2. Nominate an Alaska registered agent

Every nonprofit organization in Alaska needs to have a nominated Alaska registered agent. 

The registered agent is also referred to as a statutory or resident agent and is a business entity or individual responsible for accepting or receiving important legal documentation on your nonprofit’s behalf. 

Ultimately, the designated individual is the nonprofit’s point of contact with the state. The Alaska registered agent must meet the following requirements:

  • Must be a resident of Alaska or a registered agent service
  • Must be over the age of 18
  • Must have a physical or street address in Alaska
  • Must make themselves available during normal office hours to receive legal documents on the nonprofit’s behalf.

You may elect any individual within the organization to serve as the Alaska resident agent, including yourself.

3. Recruit your board members

The Alaska nonprofit needs board members. The board in Alaska must include:

At least three directors not related to each other

  • Secretary
  • Treasurer
  • President
  • Vice-president

The board members, also referred to as the Board of Directors chosen for the Alaska nonprofit, play a crucial role in the success of the organization. Some of the responsibilities of the board include:

  • Acknowledging and resolving conflict of interest
  • Generating and maintaining a positive image to the public
  • Keeping the organization’s operations above board
  • Generating funds/Maintaining financial stability
  • Distributing funds appropriately and in line with the nonprofit’s purpose
  • Recruiting new members
  • Upholding the nonprofit’s mission

4. Consent to bylaws and conflict of interest policy

Every nonprofit organization needs to adopt bylaws and a conflict of interest policy.

The bylaws contain the procedures and rules that the nonprofit is going to use for holding board meetings, electing directors and officers, and taking care of all other corporate formalities required in the state.

The conflict of interest policy is a collection of rules laid down to ensure that all decisions made by the Board of Directors benefit the organization’s cause and not the agendas of individual members.

A copy of the bylaws and conflict of interest policy does not need to be filed with the state. However, it should be kept on file and used as your nonprofit’s internal operating manual. 

5. Select an Alaska nonprofit startup corporation structure

There are various types of nonprofit organizational structures in Alaska as follows: 

  • Mutual benefit corporations: This type of nonprofit corporation is a type of organization similar to other mutual benefit corporations found in common law nations. These corporations may or may not opt for state and IRS tax-exemptions.
  • Public benefit corporations: Public benefit NPOs are created for charity purposes and act as a civic league or social welfare organization. Public benefit corporations include religious and charitable organizations formed to generate public and social good.
  • Mutual benefit common interest development corporations: These are the nonprofit formations created under the Davis Stirling Common Interest Development Act to administer common interest development, such as a homeowner’s association. 
  • Religious organizations/corporations: These nonprofits are solely for religious purposes, such as a church.

6. Prepare and file nonprofit Articles of Incorporation

Every Alaska nonprofit must file Articles of Incorporation. The purpose of the Articles of Incorporation is to document when and where the nonprofit was created and make a note of other information that is important to verify the organization’s existence. 

In order to be eligible to apply for tax-exempt status for the nonprofit in Alaska, your Articles of Incorporation must state the following:

  1. Purpose

The Alaska nonprofit’s purpose must be limited to one or more of the following categories:

  • Charitable
  • Scientific
  • Religious
  • Educational
  • Literary
  • Preventing cruelty to animals or children
  • Fostering national or international amateur sports competition
  • Testing for public safety
  1. Dissolution

You must state what the assets of the nonprofit are going to be used for, and in the event that the organization is dissolved, what happens to the assets.

In order to qualify for tax-exempt status in Alaska, the assets of the nonprofit organization can only be used for the purposes approved under section 501c3.

Additionally, the Articles of Incorporation can contain a provision that limits the personal liability of the nonprofit director for monetary damages for the breach of fiduciary duty as a director.

You may file the articles of incorporation online or by mail at the following address:

State of Alaska Corporations Section

P.O. Box 110806

Juneau, AK 99811-0806

You’ll need to submit two copies of the Articles of Incorporation. The first copy will be stamped as “filed” from the date of filing and kept in the commissioner’s office. The second copy will be attached to a certificate of incorporation and returned to you at a later date.

7. File an initial report

The Alaska nonprofit will need to file an initial report. The report will need to be filed with the Alaska Division of Corporations, Business, and Professional Licensing. 

The timeframe to file the initial report is within six months of incorporation, and you may file via mail or online.

8. Secure an EIN (Employer Identification Number)

Your EIN or Employer Identification Number is also referred to as a Federal Tax Identification Number and is often used to identify a business entity. Ultimately, it is a Social Security number for your nonprofit.

The Alaska nonprofit EIN is required whether you plan on hiring employees or not. The benefits of an EIN include:

  • Being used for Federal and State tax purposes (990 returns)
  • Hiring employees
  • Opening a business bank account

Use IRS Form SS-4 to apply. You may submit the form online or via mail. If done online, you’ll receive your EIN immediately. Additional guidance on understanding and obtaining your EIN may be found in this IRS EIN Guide.

9. Apply for federal tax exemption

Obtaining federal tax status means applying to the IRS. In order to do this, your nonprofit must be formed for the right reasons and in the right way, in terms of IRS requirements.

There are more than two dozen types of exempt nonprofits recognized by the Internal Revenue Service, and most of them are private 501(c)(3) status for private and public charities

Suppose you’re planning on becoming a 501 C3 tax-exempt organization. In that case, your Articles of Incorporation must include specific language required by the IRS, which basically ensures that your organization’s activities are limited to one or more recognized exempt purposes. 

Once you receive a federal income tax exemption, you won’t be required to pay the state income tax in Alaska. You may also qualify for Alaska property tax exemption if your nonprofit is used exclusively for charitable, religious, hospital, cemetery, or educational purposes. Nonprofits in Alaska are also not required to pay state sales tax. 

Before applying for federal tax exemption in Alaska, ensure that your nonprofit meets the following requirements: 

  • Has an EIN
  • Has at least three directors
  • Has already filed Articles of Incorporation
  • Has adopted bylaws and conflict of interest policy

The benefits of being a tax-exempt organization in Colorado are:

  • Credibility for your nonprofit
  • Income, property, and payroll taxes
  • Exemption from taxes on various taxes such as sales, federal
  • Discounts on postage rates
  • Access to grants
  • Being able to give tax deductions to donors

File Form 1023 under the Internal Revenue Code to apply for federal tax exemption or Form 1023-EZ if your nonprofit is a small business. Instructions for completing these forms may be found here on the IRS website.

The IRS will then vet your application, and if your application has been approved, you’ll receive a determination letter. The determination letter will explicitly state that your Alaska nonprofit is exempt from federal taxes under section 501c3.

10. Apply for Alaska state tax exemption

Alaska nonprofits that have received their IRS determination letter making them exempt from federal taxes do not need to apply for state tax exemption. 

This is because Alaska does not have a state-level sales tax. For further information, refer to the State of Alaska Department of Revenue.

11. Other applicable permits and licenses

Nonprofits in Alaska are required to comply with the Alaska Department of Revenue – Charitable Gaming rules when hosting lotteries, raffles, bingo, and various other charitable games.

Additional state registration and reporting requirements

When it comes to charitable solicitation or fundraising activities, the laws differ from one state to the next. 

However, in the state of Alaska, you need to refer to the Alaska Attorney General website or the Alaska Department of Law Consumer Protection Unit for information about the fundraising and registration requirements for Alaska nonprofits. 

You may also consult the IRS Compliance Guide for further direction if you plan to raise funds or are considering a fiscal sponsorship for your Alaska nonprofit. 

12. Submit an annual report

In addition to filing the initial report, Alaska nonprofits should provide a biennial report every year by no later than July 2 in order to remain in good standing with the IRS. The biennial report should contain the following information:

  • Nonprofit’s name
  • Name of service of process agent/registered agent
  • Names and addresses of all board members

Costs of starting a new nonprofit in Alaska

  • Alaska Articles of Incorporation: $50
  • Alaska business license: $50
  • Application for 501(c)3 tax-exemption: $275 or $600 IRS fee
  • Alaska Charitable Registration: $40

Payments must be made via pay.gov

Next steps

After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:

Open a business bank account

  • Maintain accounting and tax filing
  • Ensure that your personal assets are kept separate from your nonprofits’ assets

To open a bank account, you will need to provide:

  • Your EIN
  • A copy of your articles of incorporation
  • A copy of your organization’s bylaws

Hire a business accountant 

  • Simplify payroll and bookkeeping
  • Prevent your nonprofit from avoiding penalties and tax errors
  • Manage your nonprofit’s funding

Obtain insurance 

  • Focus on growing your nonprofit
  • Manage risks

You may opt for General liability, Personal liability, or Worker’s compensation insurance.

Build a website

As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals. 

Sign legal documents

One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit. 

If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:

  • State the registered name of your nonprofit
  • Use your name and signature
  • State your position/role in the organization as its authorized representative

When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual. 

Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing. 

FAQs

Yes, if starting a nonprofit in Alaska, you’ll need to get a business license via the Alaska Division of Corporations, Business, and Professional Licensing. Additionally, having a good business plan for your Alaska nonprofit is highly recommended.

Yes, having a mission statement for your nonprofit helps to clarify its purpose and may motivate both staff and potential donors to give towards the cause. The nonprofit’s mission statement may be compiled as part of the bylaws or Articles of Incorporation.

The choice is ultimately yours. But if there are existing organizations that share your vision, one of the options is to go into partnerships or join with them in serving your cause. Since they are already in existence, they should have crucial operating functions in place.

Irrespective of how good your research skills may be, it is recommended that you seek legal advice when starting an Alaska nonprofit. This will ensure that you comply with the state f Alaska’s laws pertaining to the formation of nonprofit organizations. Legal advice is also crucial in keeping your nonprofit’s dealings above board throughout your nonprofit’s existence.

Aside from filing fees, you’ll need to maintain your Alaska nonprofit by facilitating the costs year by year. Depending on the nonprofit’s activities, the costs may be higher or lower from one year to the next. Nonprofits that accept donations must pay $40 each year to maintain the “charity” status. Biennial reports cost $25 per year, and your Alaska business license will cost you $50 per year moving forward. 

The post How to Start a Nonprofit in Alaska first appeared on Chamber of Commerce.

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How to Start a Nonprofit in Kansas https://www.chamberofcommerce.org/nonprofit/kansas Thu, 24 Mar 2022 14:53:48 +0000 https://www.chamberofcommerce.org/?p=21264 When anyone starts a nonprofit organization, they can use their education, business talent, and experience for the good of humanity. So while there are tangible rewards to starting a nonprofit organization in Kansas, this kind of purpose-driven experience brings forth intangible benefits that are often more valuable than any amount of wealth.  The state of […]

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When anyone starts a nonprofit organization, they can use their education, business talent, and experience for the good of humanity. So while there are tangible rewards to starting a nonprofit organization in Kansas, this kind of purpose-driven experience brings forth intangible benefits that are often more valuable than any amount of wealth. 

The state of Kansas has approximately 18,406 nonprofit organizations in the nonprofit sector. Some of the most popular Kansas nonprofit organizations are Fundamental Learning Center Inc, Variety Children’s Charity of Greater Kansas City, and Star of Hope International America Inc. 

Getting a nonprofit organization up and running may take as little as two weeks or as long as three months, as long as you have filed the necessary documentation and have all your paperwork in order. 

The following step-by-step guide will give you an idea of what it entails to start a nonprofit in Kansas.

1. Select a name for your organization

Every nonprofit needs a name and the first step in starting a Kansas nonprofit corporation is choosing a name for the organization. The name of the organization cannot be the same as any other nonprofit or for-profit in the state of Kansas or any other nonprofit name filed with the Kansas Secretary of State.

Therefore, to check the availability of the Kansas nonprofit name, refer to the BEES or Kansas business entity search station.

Additionally, the name of the Kansas nonprofit must include the following designations:

  • Incorporated
  • Association
  • College
  • Club
  • Foundation
  • Corporation
  • Company
  • Institute
  • Fund
  • Society
  • Limited
  • Union
  • Syndicate

If it does not include the above-mentioned designations, then it must include one of the following abbreviations: 

  • Co
  • Corp
  • Ltd
  • Inc.

The name of the Kansas nonprofit must also be written in Roman letters or characters. 

2. Nominate a Kansas registered agent

Every nonprofit organization in the state of Kansas must choose a registered agent. The role of the registered agent is to receive legal documentation and service of process on behalf of the Kansas nonprofit. 

Ultimately, the registered agent is a business point of contact with the state of Kansas. You may appoint anyone as a registered agent; however, they must meet the following requirements: 

  • Must reside in the state of Kansas
  • Must be at least 18 years of age
  • Must maintain normal office hours
  • Must agree to the appointment

You may nominate anyone as the nonprofit’s point of contact with the state, including yourself.

3. Recruit your board members

The next step in creating your Kansas nonprofit organization is nominating the initial members of the organization’s governing body. 

You need to select at least three directors for the nonprofit organization who are unrelated to each other, and at least one officer will record or make notes of detailed records of meetings. 

You also need to elect a president and secretary for the Kansas nonprofit, and these individuals are known as the officers of the nonprofit organization.

These individuals will make up your nonprofit’s board of directors. Aside from helping to write the Articles of Incorporation, they will also help to compile the bylaws.

4. Consent to bylaws and conflict of interest policy

The bylaws and conflict of interest policy are two important documents that your nonprofit will need to compile in order to be eligible for 501(c)(3) tax exemption.

The bylaws is a document that specifies the governing procedures and rules that the nonprofit must abide by when taking care of corporate formalities such as holding meetings and electing directors and officers for the nonprofit organization

A collection of rules to ensure that the nonprofit’s decisions made by the board of directors benefit the organization and not individual members’ agendas is referred to as the conflict of interest policy. 

The organization must adopt the conflict of interest policy and bylaws at the first board meeting where the officers and directors are officially nominated.

5. Select a Kansas nonprofit startup corporation structure

Kansas consists of various types of nonprofits or organizational structures, but they usually fall under one or more of the following categories: 

  • Religious organizations/corporations: These nonprofits are solely for religious purposes, such as synagogues and churches.
  • Mutual benefit common interest development corporations: These are the nonprofit formations created under the Davis Stirling Common Interest Development Act to administer common interest development, such as a homeowner’s association. 
  • Mutual benefit corporations: This type of nonprofit structure is a type of organization much like other mutual benefit corporations found in common law nations. They work for the greater good of a particular group and not the general public. 

Organizations under the mutual benefit category raise money by normally charging their members monthly or annual fees. The funds are then used to benefit the paying members as dividends are expected. Unions are an example of a mutual benefit corporation. These corporations may or may not opt for state and IRS tax-exemptions.

  • Public benefit corporations: Public benefit nonprofit organizations are created for the purposes of charity and are the most popular type of nonprofit. They are meant to benefit a part of the public or target a specific community. 

Some of the types of charitable organizations that fall into this category are educational programs, social services, and artistic endeavors.

6. Prepare and file nonprofit Articles of Incorporation

Every Kansas nonprofit organization is expected to file Articles of Incorporation. The Articles of Incorporation is what officially marks the formation of your nonprofit. 

The articles will document when and where the organization was formed and capture all the information necessary to verify the nonprofit’s existence. 

The Articles of Incorporation must be customized to your Kansas nonprofit and should also meet state and IRS requirements to ensure that you are eligible for federal tax exemption.

Your articles must contain two specific statements, which are:

  1. Purpose: 

In order to register your nonprofit with the Internal Revenue Service and be eligible for 501(c)(3) tax-exempt status, the organization’s purpose must be clearly stated and limited to the following categories:

  • Religious
  • Scientific
  • Charitable
  • Literary
  • Educational
  • Testing for public safety
  • Fostering national/international amateur sports competition
  • Preventing cruelty to animals
  1. Dissolution

Your Kansas nonprofit’s Articles of Incorporation must state explicitly what the assets of the organization are going to be used for and, in the event of dissolution, what’s going to happen to these assets. 

In order to be approved tax exemption in the state of Kansas, your organization’s assets must never be used for anything other than what’s approved under section 501(c)(3). 

Use this sample IRS document to learn more about the provisions required for tax-exempt status in Kansas. 

Thereafter, complete Form IA and submit it online with the Kansas Secretary of State

7. File an initial report

You won’t need to file an initial report for your Kansas nonprofit as it is not required by law.

8. Secure an EIN (Employer Identification Number)

An EIN is required in the state of Kansas by all nonprofit organizations. An EIN is an Employer Identification Number and is required by all nonprofits irrespective of whether you plan on hiring employees or not. 

In fact, it is considered a social security number for your nonprofit and is used by the IRS to identify a business entity. The EIN is also useful when it comes to:

  • Opening a business bank account for your Kansas nonprofit
  • Hiring employees
  • State and federal tax purposes

To obtain an EIN, you’ll need to complete IRS Form SS-4, which is free of charge. 

Once completed, submit it online via the IRS website, and your EIN will be provided immediately. 

9. Apply for federal tax exemption

All public charities are required to apply for 501(c)(3) tax exemption as per Internal Revenue Code in the state of Kansas. Tax exemption does come with many benefits, including:

  • Enjoying lower postage rates when you mail more than 250 similar copies of mail 
  • Officers and directors of NPO’s that have obtained 501(c)(3) status can take advantage of limited liability for the operation of the nonprofit
  • Access to both private and government grants
  • Discounts offered by certain stores and businesses to nonprofits and employees
  • Free public service announcements on radio and TV
  • Permanent tax exemption as 501(c)(3) status will never need to be renewed
  • Tax-deductible donations

In order to be eligible for 501(c)(3) status, the Kansas nonprofit must have already completed the following processes:

  • Obtained an EIN 
  • Adopted conflict of interest policy and bylaws 
  • Filed Articles of Incorporation 
  • Elected three directors who have no relation to each other

When putting in your federal tax exemption application, you’ll need to complete IRS Form 1023. Small organizations or small businesses may choose to file Form 1023-EZ, a much simpler and shorter application form with quicker processing times.

Once completed, you must file the relevant form with the Internal Revenue Service and wait for the application to be approved.

Once the application has been accepted and approved, you’ll receive a determination letter. This letter makes you a tax-exempt organization or one of the existing organizations with 501c3 status, and you’re free to enjoy all of the benefits that come with it.

10. Apply for Kansas state tax exemption

Once the Kansas nonprofit has received their Determination letter, they are automatically free from state and federal income tax. However, you will still need to file to obtain sales and use tax exemption with the Kansas Department of Revenue. 

File the relevant application Form or template online and submit it to the Kansas Department of Revenue. Please note that not all 501(c)(3) nonprofits are eligible for this exemption, and you need to use the online system to file for the exemption.

11. Other applicable permits and licenses

Since the range of requirements varies on federal, state, and local levels, you should access the Small Business Administration Business License and Permit Lookup tool to search your Kansas nonprofit type and locality.

Additional state registration and reporting requirements

Depending on the size of the nonprofit and the activities you plan on running, you may or may not need to register with the Kansas Attorney General before attempting to raise funds or participate in charitable solicitation. Refer to the Kansas Attorney General website for additional rules and further information about Kansas fundraising registration requirements.

12. Submit an annual report

Nonprofits operating in the state of Kansas are required by law to file an annual report each year with the Kansas Secretary of State Business Services Division. The annual report must be filed on the 15th day of the 4th month after the end of the taxable year. 

Your annual report must include the following information: 

  • Business name
  • Business ID number
  • Principle address
  • Name of the state that your nonprofit was formed in
  • FEIN
  • Names and addresses of officers and directors
  • A brief statement of purpose
  • Name, contact number, and signature of the individual filing the annual report

Once completed, file your annual report on the Kansas Secretary of State website.

Costs of starting a new nonprofit in Kansas

The following filing fees are applicable to all Kansas nonprofit organizations:

  • Articles of Incorporation: $20 + optional $20 expedite fee
  • 501(c): $275 or $600 IRS fee
  • Kansas business tax registration: varies based on tax accounts/licenses
  • Kansas Charitable Registration: $35

Payments can be made via Pay.gov.

Next steps

After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:

Open a business bank account

  • Maintain accounting and tax filing
  • Ensure that your personal assets are kept separate from your nonprofits’ assets

To open a bank account, you will need to provide:

  • Your EIN
  • A copy of your articles of incorporation
  • A copy of your organization’s bylaws

Hire a business accountant 

  • Simplify payroll and bookkeeping
  • Prevent your nonprofit from avoiding penalties and tax errors
  • Manage your nonprofit’s funding

Obtain insurance 

  • Focus on growing your nonprofit
  • Manage risks

You may opt for General liability, Personal liability, or Worker’s compensation insurance.

Build a website

As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals. 

Sign legal documents

One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit. 

If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:

  • State the registered name of your nonprofit
  • Use your name and signature
  • State your position/role in the organization as its authorized representative

When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual. 

Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing. 

FAQs

An organization’s mission statement is essentially a description of why the organization exists and exactly what it hopes to achieve by existing. Additionally, the mission statement may include how the organization hopes to achieve its impact and what resources it finds most valuable in achieving its mission. The mission statement is a guide for nonprofit members and stakeholders and should be included in the nonprofit’s business plan.

Nonprofit organizations in Kansas must fulfill a number of requirements to attain 501(c)(3) tax exemption eligibility. This is as per the Internal Revenue Code. However, the most important requirement is that the nonprofit must be operated and formed solely for exempt purposes that fall under section 501(c)(3). All organization proceeds must be used to further the nonprofit’s cause.

Private foundations are nonprofit charitable entities that single benefactors typically create, and the funds gained by the private foundation are normally derived from a single source. On the other hand, a public charity uses funds collected from the public to support its cause. The only substantive difference between the two is the manner in which funds are acquired.

The short answer is yes. Most nonprofits choose to elect just one president, but if you plan on having two, all you need to do is adopt bylaws that allow for two people to be co-presidents. They will then share the nonprofit duties.

The executive director is responsible for making operational decisions that affect the nonprofit organization and its purpose. Ultimately, the executive director should be an individual fully committed to the organization’s cause and must drive the corporation’s mission.

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How to Start a Nonprofit in Kentucky https://www.chamberofcommerce.org/nonprofit/kentucky Thu, 24 Mar 2022 14:53:47 +0000 https://www.chamberofcommerce.org/?p=21278 Nonprofit or public benefit organizations can take a number of forms, including religious programs, educational programs, and programs that eliminate the impacts of poverty in a community.  Therefore, charitable organizations share many differences with for-profit companies in that they must create a benefit for the public and must also be supported by the community. In […]

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Nonprofit or public benefit organizations can take a number of forms, including religious programs, educational programs, and programs that eliminate the impacts of poverty in a community. 

Therefore, charitable organizations share many differences with for-profit companies in that they must create a benefit for the public and must also be supported by the community. In the state of Kentucky, they are approximately 17,014 nonprofit organizations, the most popular of them being Active Heroes Inc., Children of the Americas (COTA), and Lexington Rescue Mission Inc. 

Starting a nonprofit organization in the state of Kentucky has various benefits such as:

  • Receiving tax exemption on most income generated by the nonprofit
  • Access to grant funds from corporations and foundations
  • Receiving contributions that are tax-deductible for the donor

Starting a nonprofit in Kentucky can take as little as two weeks or as long as three months until you receive your tax-exempt status. The following article will provide a step-by-step guide on how to start a nonprofit in Kentucky.

1. Select a name for your organization

The first step in the process of starting a successful nonprofit in Kentucky includes deciding on a name for your corporation. Ultimately, the name of the nonprofit is its brand and defines the nonprofit’s image, so it does deserve careful consideration. 

Legally, your nonprofit corporation name cannot conflict with any other company organization already registered in the state of Kentucky. The nonprofit name must meet the following Kentucky state requirements, and end with a designation such as:

  • Company
  • Corporation
  • Limited

Alternatively, an abbreviation such as: 

  • Inc.
  • Corp
  • Co
  • Ltd

Please note that when using “Company,” it may not be preceded immediately by “and” or “&.”

To check the availability of the name you’ve decided on, refer to the Kentucky Secretary of State website and conduct a name search.

Additionally, if you plan on starting a website for a nonprofit organization, check the web domain and ensure that it is available.

2. Nominate a Kentucky registered agent

Each and every nonprofit organization in the state of Kentucky will need to nominate a registered agent. The registered agent is also called a statutory agent or service of process agent. 

Ultimately, their primary role is to accept services of process or lawsuits on behalf of the nonprofit organization. Anyone may be nominated as a resident agent as long as they consent to the appointment. 

So you may nominate a willing associate or yourself; however, the registered agent must meet the following requirements:

  • They must remain available during normal office hours
  • They must be at least or over the age of 18
  • They must be a resident of the state of Kentucky
  • They must have a physical street address in the state of Kentucky

3. Recruit your board members

Nonprofit organizations in the state of Kentucky are required to recruit a board of directors. Ultimately, nonprofits are created to serve the public interest and therefore receive favorable tax treatment by the state and federal government. 

Therefore, it is always recommended that the board of directors and officers chose to represent and make decisions on behalf of the nonprofit organization do so diligently and transparently. This keeps the organization true to its public service mission.

  • Some of the responsibilities the board of directors and officers will fulfill include:
  • Establishing priorities for the nonprofit organization
  • Ensuring that the plans and programs implemented benefit the nonprofit’s ultimate purpose and cause

Every Kentucky nonprofit organization must include at least three individuals unrelated to each other to serve as the board of directors. Additionally, Kentucky nonprofits must elect a president and secretary, known as the officers of the nonprofit corporation.

The directors and officers make up your nonprofit board of directors and will help to write the Articles of Incorporation and compile the bylaws.

You should also elect an incorporator. This is simply an individual that is responsible for signing and delivering the Articles of Incorporation. The incorporator does not need to be an officer, director, or even a member of the Kentucky nonprofit.

4. Consent to bylaws and conflict of interest policy

Applying for 501(c)(3) tax exemption with the IRS means that your nonprofit organization needs to be eligible. In order to attain eligibility for tax exemption, your Kentucky nonprofit must establish important governing documents and policies, which are:

  1. Bylaws
  2. Conflict of Interest Policy

The bylaws are essentially the governing document for your Kentucky nonprofit corporation. Essentially it’s an operating manual and should be consistent with the Articles of Incorporation as well as federal and state law. 

The bylaws will need to be adopted when your nonprofit holds its first organizational meeting where the bylaws will be reviewed and ratified.

The Conflict of Interest policy is basically an accumulation of rules under which the board must abide. Conflict of interest may arise if someone in a key position puts their own interests before the nonprofit organization‘s purpose or cause. As soon as a conflict of interest arises, it should be immediately disclosed.

Before submitting an application for 501(c)(3) tax exemption to the Internal Revenue Service, you need to have the bylaws and Conflict of Interest policy approved and adopted.

5. Select a Kentucky nonprofit startup corporation structure

Kentucky has various types of nonprofits or organizational structures, but they usually fall under one or more of the below categories: 

  • Religious organizations: These corporations are explicitly for religious purposes, such as synagogues and churches.
  • Mutual benefit common interest development corporations: These are the nonprofit formations created under the Davis Stirling Common Interest Development Act to administer common interest development, such as a homeowner’s association. 
  • Mutual benefit corporations: This type of organizational structure is a type of nonprofit much like other mutual benefit corporations. Their purpose is for the greater good of a particular group and not the general public. 

Organizations under the mutual benefit category raise money by normally charging their members monthly or annual fees. The funds are then used to benefit the paying members as dividends are expected. Unions are an example of a mutual benefit corporation. These corporations may or may not opt for state and IRS tax-exemptions.

  • Public benefit corporations: Public benefit nonprofit organizations are the most popular type of nonprofit and are formed for the purposes of charity. They are meant to benefit a part of the public or target a specific community. 

Some of the types of charitable organizations that fall into this category are educational programs, artistic endeavors, and social services. 

6. Prepare and file nonprofit Articles of Incorporation

Your Kentucky nonprofit will need to file the Articles of Incorporation with the state to attain tax exemption eligibility. Additionally, the Articles of Incorporation must clearly state the following information:

  1. Purpose: 

Your nonprofit organization in Kentucky must be limited to one or more of the following categories:

  • Testing for Public SafetyPreventing cruelty to animals/children
  • Fostering national and international amateur sports competition
  • Literary
  • Educational
  • Scientific
  • Religious
  • Charitable
  1. Dissolution:

The dissolution involves clearly stating what the Kentucky nonprofit’s assets are going to be used for and what is going to happen to the Kentucky nonprofit’s assets in the event of dissolution.

Additionally, the Articles of Incorporation need to include the following information:

  • The name of your Kentucky nonprofit
  • The purpose of the Kentucky nonprofit
  • The name and address of your Kentucky nonprofit registered agent
  • The nonprofit’s mailing address
  • The name and address of directors and corporators
  • Whether or not your nonprofit organization in Kentucky will include members

Further information and reading can be found on the Internal Revenue Service website.

Once the Articles of Incorporation Form or template has been downloaded and completed, file them online with the Kentucky Secretary of State.

7. File an initial report

Nonprofits in Kentucky do not need to file an initial report.

8. Secure an EIN (Employer Identification Number)

Every nonprofit in Kentucky will need to apply for an Employer Identification Number. It’s also referred to as an EIN or Federal Tax Identification Number [FTIN]. This number is used by the Internal Revenue Service to identify a business entity. However, an EIN, which is more or less a Social Security security number for your nonprofit, is useful in the following instances:

  • To hire employees for the nonprofit organization
  • For federal and state tax purposes
  • To open a nonprofit business bank account

The EIN is free of charge and allocated by the IRS to nonprofit organizations after forming the company. You may choose to apply for your EIN online or by mail.

You’ll need to complete and file Form SS-4, and you’ll need to apply on the IRS website.

Your EIN will be immediately allocated to your nonprofit organization when filing online.

9. Apply for federal tax exemption

Obtaining 501(c)(3) tax-exempt status in Kentucky comes with various benefits such as:

  • While this status exempts organizations from state and federal corporate taxes, it may exempt them from property and sales taxes in certain states as well
  • The organization will attain legitimacy and credibility simply for having a 501(c)(3) status allocated and recognized by the IRS
  • Receive grants from private foundations, corporations, and government more freely and speedily thanks to having 501(c)(3) tax-exempt status
  • Tax exemption also means limited liability protection for directors, officers, and founders of the nonprofit
  • Kentucky nonprofit corporations with 501c3 tax exemption also qualify for discounted postage and publicity rates

In order to bring an application for tax exemption, you need to have already elected your directors and officers, adopted your Bylaws and Conflict of interest policy, filed Articles of Incorporation, and obtained EIN free of charge from the IRS.

Once these requirements have been met, complete IRS Form 1023 or IRS Form 1023-EZ for small business organizations.

Read more about obtaining tax exemption in Kentucky on the Internal Revenue Service website under IRS Publication 557

Once your application has been approved, you’ll receive a Determination letter from the IRS stating that your nonprofit is now one of the existing organizations exempt from corporate or federal income tax or an exempt organization

10. Apply for Kentucky state tax exemption

While the determination letter exempts you from corporate income tax, you still need to file to obtain sales and use tax exemption. Complete Form 51A125 and file it with the Kentucky Department of Revenue

Along with your form, you need to include a copy of the Articles of Incorporation and your Internal Revenue Service Determination Letter.

11. Other applicable permits and licenses

Nonprofits in Kentucky are not required to obtain a statewide business license to legally operate their organization in the state. However, your nonprofit may need to obtain one or more licenses or permits in your town or county. 

Depending on the services your organization is going to be providing, you should seek legal advice or check with your local licensing division to ensure that you’re complying with the relevant laws. You may also refer to the Small Business Administration Business License & Permit look-up tool

Additional state registration and reporting requirements

When it comes to other registration and state reporting requirements, you should refer to the Kentucky Attorney General‘s website for additional rules. 

Depending on the activities and the size of the nonprofit in the state of Kentucky, you may need to register with the Kentucky Attorney General prior to getting involved in any charitable solicitation or attempting to raise funds for the organization.

12. Submit an annual report

In order to comply with state laws and keep your Kentucky nonprofit in good standing, you need to file your annual report with the Secretary of State by no later than June 30 each and every year. 

The annual report should conclude basic information about your organization, such as the address of the organization, the names and addresses of directors, and the names and addresses of the registered agent. Once completing your annual report, you should submit it online.

Costs of starting a new nonprofit in Kentucky

The following filing fees are applicable to all nonprofits in Kentucky:

  • Articles of Incorporation: $8
  • 501(c): $275 or $600 IRS fee

Next steps

After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:

Open a business bank account

  • Maintain accounting and tax filing
  • Ensure that your personal assets are kept separate from your nonprofits’ assets

To open a bank account, you will need to provide:

  • Your EIN
  • A copy of your articles of incorporation
  • A copy of your organization’s bylaws

Hire a business accountant 

  • Simplify payroll and bookkeeping
  • Prevent your nonprofit from avoiding penalties and tax errors
  • Manage your nonprofit’s funding

Obtain insurance 

  • Focus on growing your nonprofit
  • Manage risks

You may opt for General liability, Personal liability, or Worker’s compensation insurance.

Build a website

As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals. 

Sign legal documents

One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit. 

If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:

  • State the registered name of your nonprofit
  • Use your name and signature
  • State your position/role in the organization as its authorized representative

When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual. 

Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing. 

FAQs

There are many ways to get involved in fundraising for your Kentucky nonprofit. Some of them include creating a donation page, launching a crowdfunding campaign, enabling reoccurring donations, trying peer-to-peer fundraising, applying for private and government grants, and launching a text-to-give campaign.

Public charities are tax-exempt nonprofit organizations that are recognized under the Internal Revenue Code. These organizations accept financial support in the form of donations from foundations, corporations, companies, individuals, and fundraising initiatives. Public charities are places such as churches, schools, and hospitals and provide services for the greater good of the community.

The collective name used to describe organizations and institutions in American society is referred to as the nonprofit sector. They are not classified as government or business entities. The nonprofit sector includes charities, foundations, social welfare organizations, and professional and trade associations. The nonprofit sector is often referred to as the philanthropic sector, the independent sector, and the social sector.

While you don’t necessarily need to have a mission statement, every nonprofit is on a mission. Therefore your organization’s mission statement will basically let people and the outside world know what you believe in and what you hope to achieve by starting your nonprofit corporation. Therefore, every mission statement should be included in your nonprofit business plan and should encapsulate the reason for your nonprofit’s existence.

The National Council of Nonprofits is a leading advocate for charitable nonprofits and also a trusted resource. Ultimately, they identify emerging trends, promote solutions, benefit charitable organizations and the communities they serve and share proven practices. The National Council of Nonprofits ultimately is a helping hand for nonprofit organizations nationally.

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