How to Set Up a Not for Profit Company
Starting a charity or a community-services group can be as straightforward as gathering a few people together who share a common cause. But filing as a non-profit organization is a good idea to qualify for grant funding and large donations. It's also a good idea because your organization will be tax exempt and be protected against personal liability.
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Instructions
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Establish the organization's mission. Most community-service groups form to fill a specific need, such as providing clothes to those in need or beautifying the neighborhood. Formalize your mission by putting it on paper.
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Decide on a name. Your organization's name should be unique. You can visit the U.S. Patent and Trademark Office to make sure the name you have in mind is not protected by another organization. Visit http://www.uspto.gov and click on "Trademark Basics" in the Trademark section to get started. You can also check sites like GoDaddy.com to see if the Web site domain name is already taken.
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Select the board members. The board of directors ensures the group fulfills its mission. It also helps with fundraising and event planning. When you file for non-profit status, the IRS will want to see a list of the board members.
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Write a strategic plan. This will include a budget, a mission statement, a list of board members, organizational structure, goals, a SWOT analysis (strengths, weaknesses, opportunities and threats), and how you will execute the plan.
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File the articles of incorporation. While this is not necessary step when applying for non-profit status, there are a number of benefits to doing this. Check with your secretary of state's office to learn more.
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Obtain a Federal Tax Identification Number, also called EIN (Employer Identification Number). This number acts like a social-security number for an organization. To apply, file an SS-4 form with the IRS.
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Complete and submit Form 1023 to the IRS. This is the official form for obtaining non-profit status. Complete it online at http://www.irs.gov within 15 months of developing your organization or filing your articles of incorporation. The application will ask you for the mission statement, a list of board members and specific elements listed in the business plan. You will also need to decide on a non-profit category, such as a political organization, religious group or charity. The filing fee will depend on the size of the group's budget.
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Tips & Warnings
Enlist the help of a certified public accountant to develop your budget. You can use other tools such as business plan software and online legal support to help with the other steps in the process.
