How to Start a Nonprofit 501(c)(3)

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How to Start a Nonprofit 501(c)(3)

  1. 1. Melanie M. Swift, MNMDirector of Nonprofit Services CharityNet USA Chris Romero Marketing Coordinator HBIF Meeting 12-09 CharityNet USA info@CharityNetUSA.com
  2. 2. • CharityNet USA: A “One-stop” resource center for nonprofit organizations and foundations nationwide!• Key Speaker: Melanie M. Swift, MNM
  3. 3. • Will the webinar slides be available for download? Yes• Will the webinar be recorded and available on-demand? Yes – Recorded Webinar Available At: • http://www.charitynetusa.com/webinararchive/in dex.php
  4. 4. I. Starting a Nonprofit OverviewII. Articles of IncorporationIII. BylawsIV. Board DevelopmentV. Conflicts of InterestVI. Tax Exemption
  5. 5. • Treat it like a business• Develop a Plan• What is my advantage?• What makes my organization unique?• How will I Sustain?• Know the Facts!
  6. 6. • 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
  7. 7. • Operating constitution• Outlines more specific measures than does AOI• Details board procedures• Defines elections, term limits, quorums, etc.• Should be reviewed and revised regularly
  8. 8. • 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.
  9. 9. • 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
  10. 10. • The Activities of a Board Include: • Mission Statement Development • Policymaking • Executive Director supervision • Committee appointment • Reputation Enhancement
  11. 11. • 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
  12. 12. • 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
  13. 13. • 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.
  14. 14. In most casesboard memberscannot be heldpersonallyresponsible forlegal actionagainst theorganization.
  15. 15. • 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.
  16. 16. • Require full disclosure of potential conflicts.• Requires arm’s-length negotiations.• Removes individual with conflict from participation in the decision and/or vote.
  17. 17. • Setup your 501c3• Develop Fundraising Plans• Start Building Awareness of your Organization• Begin Fundraising
  18. 18. • 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.
  19. 19. • 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!
  20. 20. NonprofitDoes NotMean TaxExempt!
  21. 21. • A nonprofit must prove that they are both organized & operated exclusively for allowable purposes.
  22. 22. • 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
  23. 23. • Homeless Shelters • Clothing Ministries• Soup Kitchens • Prison Ministries• Churches • Foreign Assistance• Outreach Ministries • Art Schools/Centers• Private Schools • Youth Organizations• Daycares • Little Leagues• Museums • Low Income Housing• Community • Senior Housing Development • Orphanages Organizations
  24. 24. • 501(c)(3) organizations are subject to limitations on some specific activities, including: • Private benefit/inurement • Lobbying • Political Campaign Activity • Unrelated Business
  25. 25. • 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
  26. 26. • 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
  27. 27. Free Flyer(with purchase of $499)
  28. 28. • CharityNet Nonprofit Services • 501c3 Prep • Grant Writing • Strategic Planning • Website Development • Graphic Design • Marketing (Online & Offline) • Bookkeeping & Accounting • Small Business Services
  29. 29. Contact Us • Chris Romero: Chris@bizcentralusa.com • Melanie Swift: Melanie@bizcentralusa.com • Visit www.CharityNetUSA.com or Call 407-857-9002 www.twitter.com/charitynetusa Facebook Fan Page: CharityNet USA

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