How to Start a Charity

Starting a charity is not as daunting as it seems. Anyone with dedication, patience, and the ability to follow directions can successfully incorporate a charitable organization. There are federal, state and local requirements for starting a charitable organization, as well as multiple organizational structures to choose from. One has to thoroughly research and check with all appropriate authorities. If you follow the steps below you will be able to create your own charitable organization with less hassle than you might think. There is always a need in many communities for charities to operate.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• A name for your charity;
• Articles of incorporation;
• Bylaws
• Federal Employer Identification Number
• Filing fees
• Need for charity in community
• Filing form for Secretary of State
• IRS 501 (s)(3) packet

Starting a Charitable Organization

1. Decide what type of charity you want to start. If you want to start a non-profit organization as identified by Section 501(c)(3) of the Internal Revenue Code, your organization’s activities will have to be charitable and will have to fall under certain categories. The most common categories are community benefit, religious, scientific, and educational. You may also elect to start a charity that serves other countries such as for children in Jamaica, Africa and Central America.

2. Decide if a 501(c)(3) non-profit organization is best suited to serve your charitable goals.

3. Define your mission. What is your organization going to do? What service will it provide your community? Write out your mission in a formal mission statement. A good mission statement succinctly communicates to others, such as volunteers, community members, and potential funders what you do or what you hope to do. The mission statement should be short, clear, and free of jargon.

4. Create Articles of Incorporation for your charity. Articles of Incorporation essentially lay out the foundations of your organization. They state the purpose, name, duration of operation, type, structure, and other basics of your organization. Most states have forms online that you can fill out. Be aware that some states require at least two signatures on Articles of Incorporation.

5. Write the bylaws for your organization. Template bylaws can be found online. Bylaws are the rules that govern your charity. A set of bylaws will define how decisions are made, who makes the decisions, what type of governing structure will direct the charity, how the organization will be set up, and how conflicts will be resolved.

6. File an application packet for a non-profit organization with your state Secretary of State. A non-profit charity is considered a corporation, so generally application paperwork is directed to the corporations division of the Secretary of State.

7. Get a Federal Employer Identification Number (EIN). The EIN is the number the IRS uses to identify your organization for tax purposes. Additionally, file with the Internal Revenue Service for recognition as a charitable organization. There are charitable organization application packets available online. The IRS reviews applications for recognition as a charitable organization on an ongoing basis, so you can apply for charitable status at any time.
   
   You must first complete your Articles of Incorporation and your Bylaws, and the get accepted by the Secretary of State prior to applying for federal charitable status.

8. Set up a board of directors and a registered agent. The board of directors will help guide the charity and will make decisions. You are now ready to become active in your community. Advertise what you are doing, who is going to benefit, and how you are going to go about doing it. You may now create programs, hold events, raise funds and live up to your goals as a charity.

Tips & Warnings

• Ask for help from other charitable organizations completing similar work.
• Research what other charities put in their Articles of Incorporation & bylaws
• Don't be afraid to ask questions. This is a learning experience.
• Charitable organizations, like businesses, take a lot of work and dedication.
• You must keep impeccable records. The IRS may want to review your records.

Resources

• www.irs.gov/charities

[lairdcarlson]

on 4/13/2009 I would like to start a Charity using the power of the Internet. I am working with a Church that has volunteers in may different countries. Do I have to be licensed LLC or Corp or non-profit in order to collect money and give to the mission? [e-mail]

[qtie]

on 3/12/2009 Thumbs up Onelove!