Updates Here, There, and Everywhere

 A lot of headway has been made over this past week in regards to completing this project. On the legal end, I have contacted a personal family friend who is a tax attorney for Klein, Thorpe & Jenkins Ltd. and received excellent advice. Until this organization in incorporated (again, I am not sure if I will file) I am not liable for anything. Thank goodness! In regards to protecting my final binder/idea, I do not have to copyright but can have on file Confidentiality/Disclosure Form(s) if I do present to an already well established organization. Again, very good advice! On the academic end, Professor Berger who is overseeing my work, suggested that I "keep on keepin' on" with my work and to begin the academic research on the area of Zacapa once I return from my upcoming trip to Guatemala. Which leads me to my next point...

On October 4th I will be traveling to Guatemala along with a group of dentists and members of Crossroads Community Church. I am hoping to get a lot accomplished while in country. For my work, my goal is to perhaps conduct interviews of those who live in Conevisa. The purpose of these general interviews is to get a further understanding of the community to evaluate the conditions. Academics can only go so far in research and I truly believe that having an academic understanding of any world problem is not enough to accurately address the issues. You need to be on the ground talking with the locals and not just reading an article about them. (Side note- this has been a hot topic of discussion in my International Studies Capstone course) Another goal I have is to complete/type up the general business plan. For the purpose of my project, the business plan I am defining as: the outline of how a church is to do a trip to Conevisa i.e. what to expect, the schedule, the packing list, the area where they will be serving, contacts, etc. Any international mission organization has their own business plan, so this is nothing "new". I think that this will be the most fun to type up! While in Guatemala, I am not sure how great the internet connection will be... I will try to blog as much as possible if there is indeed a good connection.

~Please keep our team in your prayers~

It is fitting to quote Ignatius of Loyola today:

Go Forth and Set the World on Fire

Time to Clarify

I would like to make it clear to all readers of this blog that the overall purpose of the work that I am doing is to create a binder that includes the process of how to create a nonprofit corporation and the historical impact that missions has had on Guatemala from the colonial era to present day. This binder is my final project in order to receive my BA in International Studies and minor in Latin American Studies from Loyola University Chicago. I will have the tools/layout to create a nonprofit that will focus on creating connections with churches in the USA and communities in Guatemala, but IF and WHEN that happens depends on a lot more than just having the tools and a degree by the end of 2014. The legal process alone could take over nine months (and that is being optimistic) and the federal/state/legal fees alone I cannot take on at this exact moment.

With all this being said, what I will further be posting in regards to the legal process of forming a nonprofit corporation will be the basics. If you, as a reader, want to take the time like I am to learn the fine details then here is the link to Attorney Anthony Mancuso's book: Amazon  which I have been sharing throughout this blog. I am cutting down on the details because I have to essentially protect my final work that I will be submitting at the end of the semester. Plus, I do not want to be liable in some way pertaining to a nonprofit that does not even exist. I still believe that this idea for a nonprofit that helps churches in the US to connect and build long term, sustaining relationships with communities in Guatemala and then allowing those relationships to grow on their own, is needed.

Alrighty, here are the basics of Mancuso's work that I have learned:
1. Forming a corporation is the first step to obtain nonprofit status because it has to be in existence when applying for federal and state income tax exemption.
2. Mancuso provides a list of sequential steps in naming and filing the Articles of Incorporation.
3. The steps to even obtain a name is a legal process.
4. The Articles of Incorporation seem relatively simple, in my opinion- the secretary of state even provides outlines of how to meet the statutory requirements.

Thank You for Reading and God Bless

My favorite Bible verse so reposting it:

Proverbs 3:5-6

Trust in the Lord with all your heart

and lean not on your own understanding.

In all your ways acknowledge Him

and He will make your paths straight.

Guatemala is on the Horizon

Starting off with exciting news is always a wonderful. From October 4 to the 11th, I will be in Zacapa, Guatemala along with other missionaries who are hosting a dental clinic to the city of Coneviza. Although I have absolutely zero knowledge/skill for dental work, I will instead be meeting with the community leaders (cocode), the school board, and pastors in the area to discuss the plan in creating the Celeste Mission House as well as a nonprofit organization in Guatemala that will be like a sister to the one that I am creating in the U.S. It would be easiest and safest to create organizations in each country, especially for liability purposes. If internet is available then I will be much more active in posting each day while in Coneviza. The photo below is the view from the mountain that the Celeste Mission House could be built:

Matthew 7:24-27 Build upon the Rock

Back to business. A week's worth of nonprofit learning involved a lot of terminology and math (disclaimer- my undergraduate studies only required one math class, so I am a bit rusty). Here are the basics from Mancuso's text:

Chapter 4

• Public Charity Test- must be obtained along with 501(c)3 tax exempt status
• 1. Form a nonprofit that automatically qualifies
• 2. Derive most of the support from the public
• 3. Receive most of the revenue from activities related by tax exempt purposes
• Public Support Test- meaning: the nonprofit is classified as publicly supported, and the public charity must regularly solicit funds from the general community
• Must receive substantial portion of the funds from broad based public support sources
• Note to Self: May not meet because will rely on few private donors and/or grants, but can let the IRS decide
• The 1/3 or 1/10 figure of public support (math time!)

(high) --> public support 

(low)--> total support figure

= % of final public support

or

public support/total support figure = final public support %

• Public Support- the funds from private and public agencies and contributors from corporate and individuals donors
• "Normally"- is that the organization must receive either 1/3 or 1/10 of its total support from public support sources
• Government Unit- is considered public support (Ex. federal or state grants)
• Membership Fees- are public support if the member does not receive anything of monetary value in return
• Exempt Activities Support Test- the status of a 501(c)3 if not a public charity or a public support test candidate
• 1. Receive normally more than 1/3 of total support in each tax year as qualified public support (Ex. gifts, grants, contributions, membership fees, or gross receipts)
• 2. Must normally NOT receive more than 1/3 of its annual support from unrelated trades, businesses, gross investment income(s)
• Gain public support from: individuals, government agencies, other 501(c)3
• Note to Self: there is one major limitation which in any tax year, receipts from individuals or government units from the performance of exempt purpose service that exceeds $5K or 1% of the organization's total support for the year must be excluded from the organization's qualified public support figure
• Note to Self: the IRS will classify all 501(c)3s as private foundations so MUST change/apply to be a public charity
• Foundations are extremely restricted and monitored

The next chapter was about tax beneits and reporting requirements. To spare ya'll the explanations here is relative information:

• Nonprofits can apply for exemption to corporate income state tax
• Usually automatically exempt with 501(c)3 status
• But may have to notify the Department of Revenue
• IL- automatically recognized and can apply for sales tax exemption
• TX- separate application required but determination follows federal ruling (a.k.a. if given 501(c)3 status by the federal government then the state must follow suit with the tax)
• Generally have to report yearly to "register" existence (a.k.a. that the nonprofit is still alive)

I will close with a few questions to whoever is reading this blog (and thank you for taking the time out of your busy day/night to glance over this post!!!!) Any questions? Any thoughts? Any concerns? Any suggestions/ guidance/ words of wisdom that you would like to share? Want to be involved in some way? You interested to learn more about Zacapa, Guatemala? (If this is so, then do not worry because in a few weeks I will be researching all about Guatemala and how missions/the history of missions began in the area)

Matthew 7:24-27
Everyone then who hears these words of mine and does them will be like a wise man who built his house on rock.
And the rain fell, and the floods came, and the winds blew and beat on that house, but it did not fall,
because it had been founded on the rock.
And everyone who hears these words of mine and does not do them will be like a foolish man who built his house on the sand.
And the rain fell, and the floods came, and the winds blew and beat against that house, and it fell,
and great was the fall of it.

If it were an "Info-mercial"...

The amount of information that has been filing my brain about how to create a nonprofit is enough to make an info-mercial. Hence, this post will be a rather long list about the basic knowings of how to create a nonprofit. All the information thus far comes from chapters 1-3 in How to form a Nonprofit Corporation 8th Edition by Attorney Anthony Mancuso. Get it here on: Amazon Also, I am learning about how the paperwork varies from state to state... having to think about whether to establish in Illinois or Texas (there is a difference in being a domestic versus foreign corporation as recognized by the states).

(fyi- highlighted blue is "new" vocab.)

• Initial Incorporation Documents:
• Articles of Incorporation
• must limit the groups' corporate purposes to one or more allowable 501c3 purposes (a.k.a. 501c3 organizational test)
• Bylaws
• Minutes
• Filing taxes annually:
• report returns with the state tax or revenue office and the attorney general
• State attorney general oversees 501c3.. religious corporations have a wider flexibility in managing internal affairs
• IRS
• Lesson Learned- hire nonprofit tax advisor/attorney
• Payroll
• Double Entry Accounting Procedures
• Status:
• First- Legal: the state corporate filing office done by filing articles of incorporation
• Second- Tax: obtain corporation income tax exemption with the IRS
• Start-Up Fees:
• $300 for federal tax exemption application fee
• Total can range from $350-400 because additions $350 if anticipate $10k gross receipts
• Lesson Learned- hire attorney for forms and to create bank account for the organization
• corporation is NOT legally required to have a specified amount of money in the corporate bank account to start (Good!)
• Finances:
• Initial money can come from:
• Contributors
• Grants
• Dues
• Lesson Learned- do NOT take start up funds from a bank because I will have to secure the loan with personal assets
• Again, can have a "reasonable" salary
• Can make money from related activities
• Lesson Learned- fine line of looking like a for-profit if generating a large amount of money and is consuming the majority of the time; can NOT substantially engage in activities unrelated to the group's tax exempt purposes such as o produce "substantial" income
• Have a Board of Directors:
• IL- need at least 3, no residency required
• TX- need at least 3, no residency required
• Term of being a Director is set in the bylaws
• No specified number in IL or TX
• Quorum- specified number of directors of the corporation to be present to take action at a meeting (usually majority)
• IL- majority/not less than 1/3 or else specified in the articles
• TX- majority as stated in the corporations certification of formation or any number (not less than 3) and having a proxy does not count
• Lesson Learned- can have a meeting over the phone but will have to check with IL and TX nonprofit corporation law and must consent unanimously if this is allowed
• Important Notes:
• None of the gains, net, profits, or dividends of the corporation can go to individuals associated with the corporation
• compensation can be challenged by the IRS and may lose 501c3 status
• can have a 'reasonable' salary for directors
• Dissolution- any assets remaining after the corporation debts and liabilities are paid must go to another 501c3
• Can NOT participate in political campaigns and can NOT engage in legislative/grass root political activities
• I probably will stay away from offering formal membership

Most Importantly: I have GOT to create a name for this organization! Any thoughts?

Proverbs 3:5-6

Trust in the Lord with all your heart,

and lean not on your own understanding.

In all your ways acknowledge Him,

and He will make your paths straight.