Midwest Center for Nonprofit Leadership / UMKC1
Presents
Establishing a Nonprofit
Organization
For
D.R.E.A.M. Initiative
O...
Midwest Center for Nonprofit Leadership / UMKC2
Establishing a
Nonprofit Organization
Presented by:
David Stallings, C.P.A...
Midwest Center for Nonprofit Leadership / UMKC3
Establishing a
Nonprofit Organization
Course Outline
1. Attributes of Tax ...
Midwest Center for Nonprofit Leadership / UMKC4
Establishing a
Nonprofit Organization
Attributes of tax exempt, charitable...
Midwest Center for Nonprofit Leadership / UMKC5
Establishing a
Nonprofit Organization
Attributes of tax exempt, charitable...
Midwest Center for Nonprofit Leadership / UMKC6
Establishing a
Nonprofit Organization
10 Responsibilities of the Board of ...
Midwest Center for Nonprofit Leadership / UMKC7
Establishing a
Nonprofit Organization
10 Responsibilities of the Board of ...
Midwest Center for Nonprofit Leadership / UMKC8
Establishing a
Nonprofit Organization
Charitable Board Design:
1. The char...
Midwest Center for Nonprofit Leadership / UMKC9
Establishing a
Nonprofit Organization
Confirming the Community Need:
Makin...
Midwest Center for Nonprofit Leadership / UMKC10
Establishing a
Nonprofit Organization
Starting Point of Confirming the Ne...
Midwest Center for Nonprofit Leadership / UMKC11
Establishing a
Nonprofit Organization
Steps to Incorporating
a Nonprofit ...
Midwest Center for Nonprofit Leadership / UMKC12
Establishing a
Nonprofit Organization
Why Incorporate ?
• Limited liabili...
Midwest Center for Nonprofit Leadership / UMKC13
Establishing a
Nonprofit Organization
I.R.S. Life Cycle of a Public Chari...
Midwest Center for Nonprofit Leadership / UMKC14
Establishing a
Nonprofit Organization
Steps to Establishing a Nonprofit
O...
Midwest Center for Nonprofit Leadership / UMKC15
Establishing a
Nonprofit Organization
Steps to Establishing a Nonprofit
O...
Midwest Center for Nonprofit Leadership / UMKC16
Establishing a
Nonprofit Organization
Steps to Establishing a Nonprofit
O...
Midwest Center for Nonprofit Leadership / UMKC17
Establishing a
Nonprofit Organization
Steps to Establishing a Nonprofit
O...
Midwest Center for Nonprofit Leadership / UMKC18
Establishing a
Nonprofit Organization
Steps to Establishing a Nonprofit
O...
Midwest Center for Nonprofit Leadership / UMKC19
Establishing a
Nonprofit Organization
Steps to Establishing a Nonprofit
O...
Midwest Center for Nonprofit Leadership / UMKC20
Establishing a
Nonprofit Organization
Steps to Establishing a Nonprofit
O...
Midwest Center for Nonprofit Leadership / UMKC21
Establishing a
Nonprofit Organization
Steps to Establishing a Nonprofit
O...
Midwest Center for Nonprofit Leadership / UMKC22
Establishing a
Nonprofit Organization
Summary: Topics We Covered
1. Attri...
Midwest Center for Nonprofit Leadership / UMKC23
Establishing a
Nonprofit Organization
Questions?Questions?
Midwest Center for Nonprofit Leadership / UMKC24
Establishing a
Nonprofit Organization
Presented by:
David Stallings, C.P....
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2008 DREAM Initiative Establishing A NPO

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2008 DREAM Initiative Establishing A NPO

  1. 1. Midwest Center for Nonprofit Leadership / UMKC1 Presents Establishing a Nonprofit Organization For D.R.E.A.M. Initiative Organizational Structure Seminar State of Missouri February 12, 2008 Midwest Center for Nonprofit Leadership University of Missouri – Kansas City
  2. 2. Midwest Center for Nonprofit Leadership / UMKC2 Establishing a Nonprofit Organization Presented by: David Stallings, C.P.A., M.P.A. Senior Fellow Midwest Center for Nonprofit Leadership/UMKC, and President, Community Mediation & Consulting, Inc. StallingsD@umkc.edu Scott Helm, Ph.D. Fellow Midwest Center for Nonprofit Leadership/UMKC, and Consultant with Community Mediation & Consulting, Inc. HelmSt@umkc.edu
  3. 3. Midwest Center for Nonprofit Leadership / UMKC3 Establishing a Nonprofit Organization Course Outline 1. Attributes of Tax Exempt, Charitable Entities 2. Organization Governance and Management 3. Confirming the Community Need 4. Establishing the Charitable Message/Mission 5. Step to Establishing a NP Corporation
  4. 4. Midwest Center for Nonprofit Leadership / UMKC4 Establishing a Nonprofit Organization Attributes of tax exempt, charitable entities The foundation of all nonprofit entities is: • Public trust • Public accountability In Exchange, the government requires or allows: 1. Directors are held legally accountable by: • Federal government • State government • Funders • Donors • Stakeholders (all others benefiting) 2. Tax deductible contributions and exemptions, all of which serve as a form of public or governmental subsidy
  5. 5. Midwest Center for Nonprofit Leadership / UMKC5 Establishing a Nonprofit Organization Attributes of tax exempt, charitable entities (contd.) Basic rules for operating a charity: • Establish a charitable mission, goals & strategies • Incorporation or other form of organization • Development of an independent Board of Directors • Create funding along with financial accountability • Retain staff and board leadership and oversight • Cultivate a corp of volunteers and supporters
  6. 6. Midwest Center for Nonprofit Leadership / UMKC6 Establishing a Nonprofit Organization 10 Responsibilities of the Board of Directors 1. Determine the Organization’s “Marketable” Mission and Purpose 2. Select the Chief Executive Officer 3. Provide proper financial oversight and public accountability 4. Ensure adequate resources 5. Ensure legal and ethical integrity and maintain accountability 6. Ensure effective organizational planning, short and long term 7. Recruit, orient, and train new board members and define and assess board effectiveness
  7. 7. Midwest Center for Nonprofit Leadership / UMKC7 Establishing a Nonprofit Organization 10 Responsibilities of the Board of Directors 8. Enhance the organization’s public standing 9. Determine, monitor and strengthen the organization’s programs and services 10. Support the Chief Executive, define their effectiveness and assess their performance annually
  8. 8. Midwest Center for Nonprofit Leadership / UMKC8 Establishing a Nonprofit Organization Charitable Board Design: 1. The charity as a cause or necessary funding partner 2. Board member representation and public interest vs. self interest 3. Community, Governmental or Elected Officials 4. Everything the Board does either confirms or refutes the “charitable” need. 5. Identify the charitable partners, however, the board should represent the broader community. 6. Populist/charitable boards vs. quasi-governmental boards (who do we look like we are trying to serve?)
  9. 9. Midwest Center for Nonprofit Leadership / UMKC9 Establishing a Nonprofit Organization Confirming the Community Need: Making the Charitable Case •If you are seeking grassroots, charitable donations, you must build the case for public benefits. And everything we say and do must be grassroots oriented. •If you are seeking primarily governmental funding, we risk undermining grassroots, charitable funding, and being perceived as an extension of the local chamber, the city government and local business interests. •Our true charitable intentions are expressed with every act of the board and staff of the agency.
  10. 10. Midwest Center for Nonprofit Leadership / UMKC10 Establishing a Nonprofit Organization Starting Point of Confirming the Need • Environmental scans • Market research • Collecting third-party, independent data • Going beyond passion and self-interest
  11. 11. Midwest Center for Nonprofit Leadership / UMKC11 Establishing a Nonprofit Organization Steps to Incorporating a Nonprofit Organization
  12. 12. Midwest Center for Nonprofit Leadership / UMKC12 Establishing a Nonprofit Organization Why Incorporate ? • Limited liability • Board and Volunteer immunity & indemnification • Adequate capital to protect the public • Insurance coverage
  13. 13. Midwest Center for Nonprofit Leadership / UMKC13 Establishing a Nonprofit Organization I.R.S. Life Cycle of a Public Charity 1. Starting Out 2. Applying to IRS 3. Annual Filings 4. Ongoing Compliance 5. Significant Events
  14. 14. Midwest Center for Nonprofit Leadership / UMKC14 Establishing a Nonprofit Organization Steps to Establishing a Nonprofit Org 1. Form a corporation under state law 2. Apply for a federal E.I.N. 3. Apply for & obtain federal tax exempt status 4. Maintain organization’s charitable purpose and organizational attributes 5. Plan for the Life Cycles of the organization 6. Dissolution of corporation
  15. 15. Midwest Center for Nonprofit Leadership / UMKC15 Establishing a Nonprofit Organization Steps to Establishing a Nonprofit Org •Forming a corporation under state law • NP purpose under 355.025 • Not owned – no stockholders • At dissolution assets go to another NP • Public v. mutual benefit • Membership v. non-membership
  16. 16. Midwest Center for Nonprofit Leadership / UMKC16 Establishing a Nonprofit Organization Steps to Establishing a Nonprofit Org •Pro forma formation •Secretary of State filing • Incorporator • Three board members •Adopt & file articles of incorporation
  17. 17. Midwest Center for Nonprofit Leadership / UMKC17 Establishing a Nonprofit Organization Steps to Establishing a Nonprofit Org IRS filings •Obtain federal EIN •Apply for tax exempt status with Form 1023 • Automatically exempt organizations • The 15 months rule • Narrative of proposed activities
  18. 18. Midwest Center for Nonprofit Leadership / UMKC18 Establishing a Nonprofit Organization Steps to Establishing a Nonprofit Org Form 1023 cont’d • Directors, officers & trustees • The 5 highest paid employees & contractors • Target population • Additional disclosures • Forecasted Budget • Public charity v. private foundation
  19. 19. Midwest Center for Nonprofit Leadership / UMKC19 Establishing a Nonprofit Organization Steps to Establishing a Nonprofit Org Complete Missouri Forms • State & Local tax exemptions for • Sales taxes • Property taxes
  20. 20. Midwest Center for Nonprofit Leadership / UMKC20 Establishing a Nonprofit Organization Steps to Establishing a Nonprofit Org Maintaining the Tax Exempt, Charitable Corporation • Filing requirements • Public records maintained • Internal records • Dissolution planning
  21. 21. Midwest Center for Nonprofit Leadership / UMKC21 Establishing a Nonprofit Organization Steps to Establishing a Nonprofit Org Helpful Resources on the internet: • IRS.gov • Sos.mo.gov • Dor.mo.gov • Guidestar.org • Mcnl.org
  22. 22. Midwest Center for Nonprofit Leadership / UMKC22 Establishing a Nonprofit Organization Summary: Topics We Covered 1. Attributes of Tax Exempt, Charitable Entities 2. Organization Governance and Management 3. Confirming the Community Need 4. Establishing the Charitable Message/Mission 5. Step to Establishing a NP Corporation
  23. 23. Midwest Center for Nonprofit Leadership / UMKC23 Establishing a Nonprofit Organization Questions?Questions?
  24. 24. Midwest Center for Nonprofit Leadership / UMKC24 Establishing a Nonprofit Organization Presented by: David Stallings, C.P.A., M.P.A. Senior Fellow Midwest Center for Nonprofit Leadership/UMKC, and President, Community Mediation & Consulting, Inc. StallingsD@umkc.edu Scott Helm, Ph.D. Fellow Midwest Center for Nonprofit Leadership/UMKC, and Consultant with Community Mediation & Consulting, Inc. HelmSt@umkc.edu
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