There are three primary characteristics of all non-profit organizations. First is to serve the community; secondly, provide security to staff; and finally earn enough money to continue in operations in the future.
When an entrepreneur starts out on his/her long journey of building a legacy with his business; he/she almost immediately focuses on the legal status of his business. Thoughts include: ‘Should I become a limited liability company or an S-Corporation?’; ‘What if I take on partners?’; ‘How do I get more capital without giving up control?’
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.
Raising money while having a good time as a charity can be a challenge. The primary goal of any charity event is to have a good time and remind the participants of the mission of the organization. The secondary goal is to raise money. Bowling brings both attributes to the 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.
Before you do anything towards starting a non-profit organization, you need to form a brain trust. This is a group of friends that will add their thoughts to your idea and provide you with a platform to begin the process. Their ideas, questions, suggestions, misgivings, and other thoughts expand your thinking beyond a simple idea to a core value of what is important.
I have had many clients come to me to ask how they could start a non-profit organization. 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?
This article is about the characteristics of a non-profit organization as compared to those of a profit driven operation. What are the differences? Actually there are NO DIFFERENCES between the two types of operations.
