How to Set Up a Benefit Fund
In order to collect donations for a cause or charity it is important to set up a benefit fund. Sometimes benefit funds are opened so people can make donations to help families where a death has occurred, or to help a family whose possessions were destroyed in a fire or other disaster. By filing out a few tax forms a benefit fund can be opened at almost any bank.
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Instructions
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Contact the IRS and get an Employee Identification Number or EIN. This is also called a Tax Identification Number and can be obtained online.
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Apply for 501C status, which is a tax-exempt status. If your application is declined you will still be able to open a benefit fund, but the government will impose taxes on any funds raised.
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Write a proposal of what the benefit fund will be used for.
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Visit the bank in which you will be setting up the benefit fund. Present your EIN number, proposal, and 501C forms to a bank representative. You may be required to present your social security number and two forms of ID.
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Fill out tax information sheets and sign any documents presented by the bank representative. Once the account is set up, anyone can make a donation by writing a check to the fund.
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Tips & Warnings
Spread the word about the benefit fund and what its purpose is. The more people that hear about it, the more will donate.
The money raised should only go towards the cause it is associated with.
Benefit funds are subject to state taxes.
Some banks require you wait a period of time before the money can be accessed.
References
Resources
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