Over 4,000 new foundations are
created every month! It is a very popular tool and it is used for many
different purposes. Do you see a social
need that you want to satisfy? Do you have a message you want to
communicate? Do you want your wealth to
benefit particular causes? Would you like to give back to the community and see
your grandchildren become respected leaders? All these purposes and more are part of the reasons why people form
foundations.
Nonprofit organizations, like
all corporations, are formed under the laws of the states, not the federal
government. The federal government
grants an exemption from federal taxes to nonprofit corporations who apply,
satisfy IRS review of their application, and follow the IRS regulations found
in Section 501 of the IRS Revenue Code. Nonprofit corporations may acquire the
funds they need to operate by soliciting donations, providing services under
government contract, applying for and receiving grants, or even operating a
business. Donations to a nonprofit with
federal tax exempt status may be deductible by the donor on Schedule A of their
tax return if the donor and the nonprofit have followed the regulations of
Section 170 of the IRS Revenue Code. Most states have elected to follow the IRS
regulations but require separate registration and reporting. Federal tax exempt
status does not automatically transfer to all state and local taxation.
If you want to form a new
nonprofit organization, you have come to the right place. We have formed,
managed and dissolved dozens of nonprofits for over 25 years. We can help you setup and maintain your
nonprofit organization’s tax exempt status by handing all of the IRS and
California reporting for
you.
Here is what we do for you ...
$ Prepare IRS mandated paragraphs in your
Articles of Incorporation. The IRS Code
section 501 and associated Treasury Regulation 1.501 requires specific control
of the powers of a qualifying corporation.
$ Create and file the necessary papers to
form a nonprofit corporation under the laws of the state of
California (or any other state of your
selection). You have a choice of states
and we will show you which states would be best for the type of nonprofit
activity you plan.
$ Prepare the By-laws sections concerning
directors with you. Nonprofits
corporations do not have shareholders. Instead, they are controlled by the
board of directors. We will explain the complexities of keeping the nonprofit
corporation aligned with your purposes.
$ Prepare IRS-required resolutions that
must be passed by the incorporating directors in order to qualify your
nonprofit for federal tax exemption. We guide you through the process of
holding the first board meeting to pass these resolutions and other resolutions
required to setup the corporation at federal and state levels.
$ Set up the books of account and
corporate records. This involves
accounting for initial inventory of assets of cash and property; accounting for
liabilities such as leases, mortgages, loans and payables; establishing control
systems for memberships and donations; filing for federal employer
identification; setting up payroll; filing state employment and tax papers;
setting up the minutes book and directors.
$ Interviewing you and writing a mission
statement and definition of your planned operations including a three year
budget plan for revenue and expenses. This is required for the federal tax-exempt application.
$ Assisting you in creating a set of
program and operations policies for board adoption that comply both with your
purposes and the IRS Section 501(c)(3) limits. From time-to-time both the IRS and Congress issue regulations in
response to current concerns about nonprofit activities. Our part-time CFO services can be an important
source of guidance to operations that may jeopardize your tax-exempt
status. Often, it is only a matter of
knowing the correct approach to take to your goals to achieve IRS approval.
$ Assist you in creating policy and
establishing internal controls on revenue from donations, grants, event fees,
services fees, or business operations. Each method carries the burden of sometimes complex federal and state
regulation. Tax-exempt operations require more documentation than for-profit
operations. Our part-time CFO services can assist in reducing the load on your
board of directors and operations staff. Errors can result in direct penalties on the directors.
$ Assist you in establishing correct
procedures and controls on fund raising. The IRS is particularly sensitive to solicitation of funds from the
general public, the expressed purpose for those funds, and the financial
control system that restricts expenditures to expressed purposes. State and
federal regulations have created a tangle of rules. We can assist you in structuring a fund
raising program or in selecting a fund raising organization. Grants are a popular source of funds. We can assist you in finding grant sources,
writing the grant application, and providing both operations and financial reports
to the granting agency.
$ Prepare, file and negotiate the Form
1023 application for tax-exempt status. The IRS Tax-exempt Organizations office is required by law to process
the application within 120 days; however, they are so overworked and understaffed
that the process can take more than 6 months. They create the time they need by
sending letters to applicants asking for additional information. We handle the correspondence and phone work
necessary to push the application through the system. We also prepare and file the state
registration once the federal application has been approved.
