As a firm that works with not-for-profit grassroots organizations, we are often asked how to start a non-profit organization. Our best advise is to create an overview or summary/plan of your cause, decide on your mission and your vision and get busy planning; then consult with attorney who specialize in that particular area of law.
Here is a quick checklist you can use to obtain tax-exempt status for a Nonprofit Corporation:
(1) Identify purpose, mission and vision of your new organization
(2) Draft and file articles of organization with the appropriate state official – in NYC, the filing is made with the Secretary of State; the articles must comply the with organizational test of the Treasury Regulations, i.e., organization must be dedicated exclusively to exempt purposes, prohibition of private inurement and private benefit, limitation on lobbying activity, no political campaign activity and assets dedicated irrevocably to exempt purposes.
(3) Determine whether the corporation will have members, shareholders or have the directors serve as members; many nonprofit corporations have only directors.
(4) Determine identity and number of directors; typically three, but if the corporation has fewer than three members, the number of directors may equal the number of members .
(5) Draft and adopt a code of regulations for governance of the corporation; this document identifies and specifies the rights of members and states the number, terms and powers of directors and officers of the corporation; it should include an IRS approved conflict of interest policy .
(6) Visit IRS.gov for all forms applications for Recognition of Exemption, Power of Attorney and all related documents.
(7) Obtain employer identification number and submit IRS forms confirming assigment of that number.
(8) Board of directors action: (a) electing additional directors, if desired; (b) electing officers; (c) adopting banking resolutions; (d) adopting/acknowledging code of regulations; (e) approving Exemption Materials and any related transactions
(9) Finalize and file Exemption Materials with IRS Service Center; filing must be accompanied by check for IRS “user fee”
(10) State registrations: charitable trust (required) and charitable solicitation (depending on activities)
We hope this was helpful.
Have a productive day!