how to start a nonprofit 501(c)(3)
DESCRIPTION
This is a slide presentation on how to get your nonprofit up and running.TRANSCRIPT
HBIF Meeting 12-09
The ABC’s of Starting a Nonprofit
A Webinar By:
Key Speaker
Melanie M. Swift, MNMDirector of Nonprofit Services
CharityNet USA
Administrator
Chris RomeroMarketing Coordinator
CharityNet [email protected]
Welcome!
• CharityNet USA: A “One-stop” resource center for nonprofit organizations and foundations nationwide!
• Key Speaker: Melanie M. Swift, MNM
Most Commonly Asked ?s
• Will the webinar slides be available for download?
• Will the webinar be recorded and available on-demand?
– Recorded Webinar Available At:• http://www.charitynetusa.com/webinararchive/in
dex.php
Yes
Yes
Ask Questions – Give Feedback!
Agenda
I. Starting a Nonprofit Overview
II. Articles of Incorporation
III. Bylaws
IV. Board Development
V. Conflicts of Interest
VI.Tax Exemption
The Gift of Giving
• Treat it like a business
• Develop a Plan• What is my
advantage?• What makes my
organization unique?
• How will I Sustain?• Know the Facts!
Articles of Incorporation
• Governing Document, aka Charter• Legally forms the corporation with
the state• Identifies the organization’s purpose• Sets out the basic operating
framework for the organization• Provides limits to organizational
activities
Bylaws
• Operating constitution• Outlines more specific measures than
does AOI• Details board procedures• Defines elections, term limits,
quorums, etc. • Should be reviewed and revised
regularly
Why a Board of Directors?
• Guardians of the public trust
– Built in protection, ensuring public purposes are being carried out.
– An effective board makes it possible for the staff to focus upon day-to-day mission fulfillment.
Board Responsibilities
• Legally and financially ensuring the conduct of the nonprofit organization
• Defining the organization’s mission, goals, and objectives
• Public accountability and creation of public value
Board Activities
• The Activities of a Board Include:•Mission Statement Development
• Policymaking
• Executive Director supervision
• Committee appointment
• Reputation Enhancement
More Board Activities
• Additional Activities Include:
• Manages the organizations funds
• Assists in developing annual budget
• Makes personal financial contributions
• Assesses its own performance
• Engages in long term strategic planning
What Board Members Do NOT Do
• Board Members DO NOT:• Become involved in day to day
operations of the organization
• Hold owner’s equity in any
organization assets• Receive compensation or salary for
their Board duties
IRS Board Guidelines for 501(c)(3)
• Must have a minimum of 3 members on the Board of Directors
• Must have a minimum of 51% that are independent
• Should represent a cross-section of the community served.
Board Indemnification
In most cases board members cannot be held personally responsible for legal action against the organization.
Conflict of Interest Policy
• Policies developed to address situations in which an insider or a member of their family may benefit personally from a transaction with the organization.
• Decisions involving conflicts may still be in the organization’s best interest.
Conflict of Interest Policy
• Require full disclosure of potential conflicts.
• Requires arm’s-length negotiations.• Removes individual with conflict from
participation in the decision and/or vote.
What Comes Next
• Setup your 501c3
• Develop Fundraising Plans
• Start Building Awareness of your Organization
• Begin Fundraising
Charity Registration
501(c)(3) Organizations
• Do not pay federal corporate income tax.
• In most cases, do not pay state corporate, franchise, excise, sales, and use taxes.
• Can offer individual and corporate donors a tax deduction for their contribution.
Summary Slide
• There are critical steps that must be taken when starting a nonprofit organization!
• Identifying organizational needs, a strong board and avoiding conflicts of interest is key in starting a solid foundation!
Why 501(c)(3)?
Nonprofit Does Not Mean Tax Exempt!
What Organizations Qualify 501(c)(3)?
•A nonprofit must prove that they are both organized & operated exclusively for allowable purposes.
Organizational Test
Operational Test
• An organization must be operated exclusively for one or more of the following purposes: • Religious• Charitable• Scientific• Testing for public safety• Literary• Educational• Fostering amateur sports• Prevention of cruelty to children or animals
Examples of Qualifying Organizations
• Homeless Shelters• Soup Kitchens• Churches• Outreach Ministries• Private Schools• Daycares• Museums• Community
Development Organizations
• Clothing Ministries• Prison Ministries• Foreign Assistance• Art Schools/Centers• Youth Organizations• Little Leagues • Low Income Housing• Senior Housing• Orphanages
Limitations for 501(c)(3)
• 501(c)(3) organizations are subject to limitations on some specific activities, including:
• Private benefit/inurement
• Lobbying
• Political Campaign Activity
• Unrelated Business
Unrelated Business Income
• Selling goods or services to generate income
• Not directly related to exempt purpose
• Reported and taxed on 990-T
• Certain exceptions apply
• If UBIT becomes a substantial portion of revenue, your organization will no loner be considered exclusively charitable
Upcoming Webinars
• Steps to Grow Your Nonprofit: 1/25/2012 3pm EST
• Fundraising Success: 02/01/2012 3pm EST
• Nonprofit Marketing: 02/08/2012 3pm EST
Register for upcoming events at:
http://www.charitynetusa.com/webinar/index.php
Special Promotion
Free Flyer(with purchase of $499)
Q & A
•CharityNet Nonprofit Services
• 501c3 Prep• Grant Writing• Strategic Planning• Website Development• Graphic Design• Marketing (Online & Offline)• Bookkeeping & Accounting• Small Business Services
Q & A
Contact Us• Chris Romero: [email protected]
• Melanie Swift: [email protected]
• Visit www.CharityNetUSA.com or Call 407-857-9002
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