No Good Deed Goes Unpunished

4 Things You Need to Know Before Setting Up a 501(c)(3) Nonprofit Charitable Corporation

Kent Seton - Thursday, January 10, 2013

 

Guest post today courtesy of Deborah Sweeney, CEO of MyCorporation.com.

Developing your dream 501(c)(3) nonprofit takes into consideration plenty of steps until it’s completed, starting with the incorporation process of preparing and filing your Articles of Incorporation and even holding an first board of director’s meeting. No matter how well you lay out these steps, occasionally a few can get forgotten along the way – and you definitely don’t want that! Here are four areas you need to be sure to address before you fully set up your 501(c)(3) nonprofit charitable corporation.

1) Determine a Great Name for Your Nonprofit

Once you have determined what societal need you’re working to address and an outline on how you plan to go about addressing that need as your purpose, it’s time to think up a name. The name of your nonprofit should be able to easily distinguish who you are from the crowd and what it is that your nonprofit organization does or provides. As a general rule of thumb, states often vary on business name requirements but the more unique the name is, the better chance you have of being able to use it for yourself. You may include the words “foundation” or “charitable foundation” within the name and nix any words like “federal” or “national” that suggests being associated with a specialized entity.

2) Establish a Mission Statement

What is your purpose? Can you easily define it and the role that you (and subsequent others involved) will have in your nonprofit? Alongside your business, annual budget and fundraising plans, you need to establish a mission statement that sums up your purpose and mission that the nonprofit will focus on in a few short sentences. Make sure you incorporate your mission statement in a succinct and legal manner into the Articles of Incorporation of your 501(c)(3) nonprofit corporation to appropriately describe your charitable activities to the IRS.

3) Obtain Your IRS Employer Identification Number (EIN)

When you receive your official copy of your Articles of Incorporation, be sure to obtain your IRS employer identification number (federal tax identification number) through the IRS. This is necessary for both tax purposes and tax exemption, and it’s important to note on charitable receipts you give to the donors to your 501(c)(3), so they receive the appropriate deduction. You can apply for an EIN online (through the IRS website) and over the phone (1-800-829-4933, from 7AM to 10PM your local time). Additionally, you will want to file IRS Form 1023 to secure your 501(c)(3) tax-exempt status and contact your Secretary of State and Attorney General for any additional forms or applications you may also need to file.  Filing your form 1023 is as easy as 1-2-3, with our trusted partner, Center for Nonprofit Creation.

4) Identify Where Your Nonprofit Will Operate

Whether you’ve got a storefront in state or out of state or even online, it’s important to identify the specific location or place where your organization plans to operate. Be sure to be able to identify the beneficiaries of your nonprofit too!

Author Bio:

Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and charities. MyCorporation.com does all the work forming the nonprofit corporation and is a proud partner with Kent E. Seton and Center For Nonprofit Creation, who helps you prepare and file the Form 1023, also known as the 501(c)(3) application, to get 501c3 tax exemption.