Sustainable Bliss

never stop learning!

Creating a Non Profit

I went through the process of helping to create a non profit for First Friday: Oceanside Art Walk. I'll share that process here. How to decide

  • Option 1: work with an established organization as fiscal agent

    • similar mission

    • typical fees 5%-10%

  • Option 2: join an existing organization

    • make sure it is a cultural fit

  • else pursue 501(c)(3)

Concerns

  • buy-in from a group of people - if it is going to be a community organization there must be more than just one person invested

First things first

  • develop mission statement

    • answers purpose, how, who benefits

      • example: "The mission of United Way of York County is to inspire the people of York County to make a difference in the lives of their neighbors through financial generosity and volunteer commitment"

  • create board of directors, elect officers

    • establish policy, exercise fiscal responsibility and oversee management (Association of Fundraising Professionals)

    • minimum officers are President, Secretary, Treasurer/CFO

      • President cannot be Secretary or Treasurer, but the person holding the Secretary role can also be the Treasurer

      • Officers cannot be paid for those roles

    • Executive Director cannot be President, but can be Secretary or Treasurer

    • evaluate time, talent, treasure

  • decide whether to engage a lawyer

    • ours fromTaxFreeCharity.com made it easy, providing the following services:

      • checked name availability

      • procured EIN

      • created/filed articles of incorporation

      • drafted bylaws

      • drafted initial meeting minutes

      • created/filed IRS Form 1023

      • drafted CT-1

      • drafted FTB 3500A

  • Bylaws

    • rules for calling board meetings, define quorum

    • how/when board members and officers are selected/elected/removed

    • officer job descriptions

    • pitfalls

    • checklist

  • file Articles of Incorporation ($98)

  • get an Employer Identification Number (EIN)

    • donation letter text: "To comply with IRS requirements regarding charitable donations, we affirm that no goods or services have been provided to you, in whole or in part, in consideration for your contribution."

  • file IRS Form 1023 ($400)

    • no corporate income tax

    • accept tax deductible donations

Put everything in place

  • check name availability

  • create bank account

    • in general, a bank needs your EIN and a copy of the endorsed Articles of Incorporation and possibly the organization's bylaws, signed by the officers

    • the signers on the account should be officers

    • banking rules/guidelines

  • establish PO Box and physical address

  • establish phone number

    • grab free number from Google Voice and forward it to a cell phone

  • create official Initial Meeting Minutes

  • for every meeting, record miniutes

  • put Liability Insurance policy in place

  • policies

Yay! Got the Letter of Determination from the IRS!

Ongoing Filings (for CA entity)

General nonprofit resources:

Arts resources:

Grant resources: