Forming a Non-Profit Organization:
Introduction:
Some rising entrepreneurs are not only interested
in going into business for themselves, and being their own bosses, but
they are also interested in helping their community, or filling some
need they feel is worthwhile. If this describes you, starting a non-profit
business may be the right step for you to take.
Definition of a Non-Profit Corporation/Organization:
________________________________________________________________________
The definition of a Non-Profit Organization
is: One which is organized not for profit but for the promotion of
the welfare of others. A non-profit corporation is defined as:
Any non-profit corporation organized under the appropriate State’s law
for charitable purposes. These are both exempt from paying Federal
income tax by virtue of its non-profit status.
Some steps on forming a Non-profit
Organization:
_____________________________________________________________________
Most organizations seek recognition under section
501(c ) (3 ) of the Internal Revenue Code, since that status allows contributions
to the organization to be eligible for deductibility as a charitable contribution.
The following are some steps to
take when forming a Non-Profit Organization:
-
Check for availability of the proposed name of the
organization.
-
Nearly 90% were married and 67% had children living
at home. (This implies that these entrepreneurs aren’t totally dependent
on their business for income.
-
80% had some postsecondary education either in a
vocational-technical school, or college.
-
About two-thirds of the those surveyed, said that
the home-based business contributed less than 25% to their total family
income. Only 12% said it contributed more than 75%.
To Incorporate or Not to Incorporate:
________________________________________________________________________
-
Do Small Non-Profit organizations need to incorporate?
-
Incorporation will generally offer greater protection
for the offices and directors than there may be available for an unincorporated
organization. Many states also provide for the disposition of the
assets of non-profit organizations.
-
Some facts about incorporating your non-profit organization:
-
Before the decision is made to incorporate, the group
must have a purpose, and a mission statement formed.
-
Incorporation will not make your organization “non-profit”
or “tax-exempt” as defined by Federal, State, and Local taxing authorities.
-
Contributions to the organization also would not
be tax deductible.
Some Things to Consider When Forming
a Non-Profit Organization:
________________________________________________________________________
-
What is the purpose/service of your organization?
-
Do I need to recruit Board Members?
-
Annual Board Meetings
-
Fundraising Plans- What amount of funds are needed
and where will they come from?
-
An Accounting System- How will funds be reported/tracked?
-
Staffing- Will my staff be paid or volunteers?
-
Insurance- Obtain business insurance as soon as possible.
-
Will my organization at any time consider taking
in any profits?
Top Web Sites to Browse:
________________________________________________________________________
http://www.nolo.com/chunksb/sb23.html
http://199.172.96.5/municode/art06/6.04.190.html
http://www.gwu.edu/~sbpm/researchcenters/casbhw/4.htm
http://www.mncn.org/bylaws.htm
