The 501(c)3 organization is an Internal Revenue Code designation granted to certain charitable entities. The main purpose of starting a nonprofit is to gain the contribution advantage the Internal Revenue Service (IRS) provides. Why do you need the IRS to authorize this? What is the difference between tax exempt and a charitable organization? How does the church fit into all of this? So what does this all mean?
The following articles explain the issues and compliance requirements related to 501(c)3 organizations.
A public charity is another term for the coveted Internal Revenue Code Section 501(c)3 status. This designation allows all donations made to the charity to be tax deductible for taxpayers. To obtain this designation, the organization must have the proper provisions within the organizing documents.
Section 6033 of the Internal Revenue Code requires tax exempt organizations to file an annual report. Form 990 fulfills this requirement. Many citizens utilize the information from Form 990 to evaluate the non-profit organization they donate to annually. The 990 covers much of the information any citizen desires to know about the charity of their choice.
Step three of starting a non-profit organization is gathering the potential board members for the first meeting. In step one; you formed a brain trust to validate the mission of the non-profit organization. In step two; you generated a list of potential board members by identifying sources and creating profiles. In this step, you have to get everyone together, present the mission to the group, get commitments to help, and set a date to legally form the non-profit organization.
Now that your brain trust has evaluated the idea and has endorsed the concept, it is time to go onto step 2 of the process. You will need to create a founding board to start the non-profit organization. The members of the brain trust provided you with names of potential board members.
