How to Start a Non-Profit Museum
Hobby groups, historical societies and even individual collectors may consider turning their shared passion or growing collection into a not-for-profit museum. While starting a museum as a non-profit organization offers certain legal and tax protections, the museum's status as a 501(c) group also comes with a number of specific requirements and obligations that differ from state to state. This guide provides a broad overview of the initial steps needed to form a new not-for-profit organization.
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Things You'll Need
- An attorney with not-for-profit experience (optional)
- An incorporating board of directors
- Various federal, state and local tax forms
Instructions
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Setting up your not-for-profit museum
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1
Develop a name and mission statement for your non-profit museum. These should be brief and clearly articulate the purpose of the organization. You will need these when filing your state articles of incorporation.
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2
Recruit a board of directors for your organization. Most states require an incorporating board (the board in place when the organization is formed) of at least three members, each of whom has no other connection to the organization. For example, the board members should not be members of the museum's staff.
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3
Hold your first board meeting and take accurate minutes at this and all future board meetings. Meetings for not-for-profit organizations are usually governed by Robert's Rules of Order.
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4
File your museum's articles of incorporation with your state. The articles include critical information such as your museum's name and mission, the names and contact information for the incorporating board and the museum's exempt purpose under the IRS code.
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When you receive your official copy of your articles of incorporation, apply for an employer identification number (federal tax identification number) through the IRS. Then file IRS Form 1023 (Application for Recognition of Exemption) to secure your tax exempt status. Note that this process can take up to six months to complete.
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Once your Application for Recognition of Exemption has been accepted and approved, file for any necessary state and local tax exemptions. In addition, to conduct any fund raising activities, your museum may need to register with your local charities registration bureau.
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7
File for any applicable state sales and property tax exemptions, based on your museum's qualifications.
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8
Draft your museum's operational bylaws and have them approved by the incorporating board.
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Tips & Warnings
Consider consulting an attorney who is well versed in the forming of not-for-profit organizations. There are a number of federal and state regulations that govern how non-profits are formed and managed, and the right attorney can simplify and streamline a very complicated process.
References
Resources
- Photo Credit Bloody at stock.xchng
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Comments
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This ia a very informative article for unknown collectors around the globe.
