Generally, an organization applying to the IRS for recognition of 501(c)(3) status retroactive to the date of its formation must file a properly completed and executed (signed) Form 1023 within 27 months after the end of the month in which it was formed. So, an organization formed on January...
STARTING A NONPROFIT
Although the vast majority of individuals who set out to start a nonprofit do so with the best of intentions, starting a nonprofit requires much more than just good intentions.
Founders should invest meaningful time and thought in determining whether they can access the human, financial and other resources necessary to create a sustainable organization that will effectively and efficiently bring value to the public. And they should understand the various considerations and issues involved with starting and operating a nonprofit. For a Step-by-Step Guide for Starting a California Nonprofit, check out our article for CalNonprofits here.
Starting a Nonprofit: Articles of Incorporation and Specific Purpose Statements
It is generally required that a nonprofit’s Articles of Incorporation or other organizing document state the general purpose(s) of the corporation. For example, the Articles of a California nonprofit public benefit corporation must include the following statements verbatim: “This corporation is a nonprofit public benefit corporation and is not...
Starting a Nonprofit: What is “Religious” under 501(c)(3)?
A “religious” purpose is one of the seven exempt purposes specified in Section 501(c)(3) of the Internal Revenue Code (the “Code”). However, unlike with the terms “charitable,” “educational,” and “scientific,” the term “religious” is not defined in the Treasury Regulations, in large part due to constitutional issues. IRS guidance...
Starting a Nonprofit: What is “Charitable” under 501(c)(3)?
A “charitable” purpose is one of the seven exempt purposes specified in Section 501(c)(3) of the Internal Revenue Code (the “Code”). According to the Treasury Regulations, the term charitable is to be interpreted in its generally accepted legal sense and includes, but is not limited to: Relief of the...
Screwtape’s 10 Pieces of Advice to Founders of Nonprofits
Build it and they will come. You need to create a nonprofit before you start looking for donations. Don't waste your time with a business plan. The world moves so fast, it would be useless in a few months. Just go with the flow and follow the opportunities as...
Starting a Nonprofit: What is “Scientific” under 501(c)(3)?
A “scientific” purpose is one of the seven exempt purposes specified in Section 501(c)(3) of the Internal Revenue Code (the “Code”). There is however little guidance about what qualifies as a scientific purpose. The Treasury Regulations refer to scientific by way of example, namely, the carrying on of scientific...
Starting a Nonprofit: What is “educational” under 501(c)(3)?
A 501(c)(3) organization may be organized and operated exclusively in furtherance of an educational purpose, but it is unclear to many startups what qualifies as educational. The first place to look is Treasury Regulation Section 1.501(c)(3)-1(d)(3), which provides that educational relates to: (a) The instruction or training of the individual...
Starting a Nonprofit: Form 1023 – Narrative of Activities
For those starting a charitable nonprofit, completing the IRS Form 1023 - Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code – may be the most difficult part of the process. Form 1023 includes 11 Parts and 8 Schedules. A critical section for an applicant...
Starting and Representing a Nonprofit – Pro Bono Issues – BASF
Stephanie Petit, a principal with Adler & Colvin, and I will be presenting on Starting and Representing a Nonprofit- Pro Bono Issues for the Bar Association of San Francisco (301 Battery Street) on Wednesday, November 30, from noon to 1:30 p.m. You can register here to attend the event in...
Legal Issues Facing Nonprofit Start-Up Organizations – Foundation Center, San Francisco
Yesterday, Gene and I presented at the Foundation Center in San Francisco on “Legal Issues Facing Nonprofit Start-Up Organizations.” Setting up and operating a successful nonprofit is challenging but possible under the right circumstances. Below we’ve highlighted some of the key steps and issues to consider prior to formation for...