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.