Starting a 501c3 non-profit Organisation – steps


Business professionals want to learn the best way to build a nonprofit 501(c)(3). For business owners, starting a nonprofit organization is a great way to help those in need.

These are not for profit companies that provide enterprises in the sector with liability insurance and tax advantages.

To reap such benefits, organizations need to meet federal and state requirements to form a non-profit organization.

Continue reading the article below to learn how to build a 501(c)(3) nonprofit organization.

1. Make clear your purpose

The first step in creating a nonprofit 501(c)(3) is to define the purpose of your business.

A clear non-profit purpose defines your organization’s goal, and who you are trying to help.

That is important to motivate future employees and volunteers.

It also draws supporters, and provides the public with a good image.

To define your purpose you need to choose one of the 8 broad categories.

You will state this definition on your tax exemption form.

Potential areas for children and animals include social, public health and the prevention of cruelty.

There are also several charitable sub-categories, such as poverty alleviation, fighting discrimination and advancing education.

2. Board recruitment

The next step in the process is the recruitment of a nonprofit committee.

Before launching your company, several states require that you assemble a team.

Their names are to be listed on the documents of incorporation. Your board should be composed of people who have resources and expertise in various fields.

One third will have access to financial capital or previous donation solicitor experience.

One third should be individuals with experience in financial, marketing and/or legal management, like a lawyer from any top business law firms.

The last third of your board should be composed of individuals who have community-level connections and field expertise.

3. Choose a name and incorporate it

Once your board has been assembled, you can select and include a name for your nonprofit.

The non-profit name will end with a corporate label such as “Incorporated,” “Limited,” or “Corporation,” as well as being an abbreviation of either of these terms.

State-run corporate offices will help you figure out whether you have your proposed name.

They can also help you reserve your name for a short period of time while you are organizing your incorporation articles.

You must file “incorporation articles” with the corporate filing office in your state.

This document will contain basic information, such as the name and office address of your nonprofit.In this document, use specific language to ensure that you get a tax-exempt status.

To create a 501(c)(3) not for profit organization, you must pick and incorporate a name correctly.

4. Nonprofit bylaws

The next thing you need to do to build your nonprofit 501(c)(3) is to draft your Bylaws. For a non-profit entity, you must have a formal and carefully worded manual detailing non-profit bylaws and keep it.

These Bylaws represent the rule book that governs your corporation’s day-to-day activities.

When issues occur they are used to settle any conflicts between members of the board and employees.

To create your document use a structured template from a reputable source.

This is the most important document which is required by your 501(c)(3). Preparing a formal collection of bylaws is an necessary step in forming a nonprofit 501(c)(3).

5. Get your IRS status obtained

Finally, to get 501(c)(3) status for your charity, you must register with the IRS. This can be a complex process, much like a music license application. Look for assistance from the board members.

Apply for tax-exemption recognition to the Internal Revenue Service.

This means filing form 1023 for the IRS. Form 1023 is a document which is 28 pages long and can include attachments, schedules and other content.

This form serves as an examination of the governing structure, purpose and scheduled programs of your organization.

This paper should be read and edited thoroughly before submitting.

The IRS closely reviews all 1023s to find some conflict-of-issue or possible benefits for insiders.

Potentially, these issues may be grounds for refusing nonprofit status.

To receive 501(c)(3) status for your nonprofit organization, carefully complete and apply form 1023 to the IRS.

In summary

There are some steps that company owners need to take to create a nonprofit 501(c)(3) organization.

First, you will identify your mission, and choose your organization’s category.

Then a diverse team of board members meet to oversee the activities.

Choose a name with a corporate title, and apply to a state-run office for incorporation status.

Prepare a document that clearly outlines your non-profit statutes, and carefully complete and file IRS 1023 application form.

Using the above-mentioned points to create a nonprofit 501(c)(3) organization and start doing good for the people around you.

Komolafe Timileyin is a passionate entrepreneur that loves to solve entrepreneurial issues. He is also a blogger and an upcoming Engineer.

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