Qualifying for 501c3

Many individuals often wonder whether their proposed activities and services qualify for 501c3 tax exempt status.  Below we will highlight some of our recent projects which qualify for 501c3 tax exempt status as charitable, educational or religious.

Addiction Prevention & Support  

This nonprofit organization is helping individuals in Tennessee. Their main focus to provide support and resources to individuals in the community who is struggling with addiction. They plan on providing resources including, but not limited to, food, clothing, hygiene products, and faith-based curriculum.

Cancer Assistance and Support  

This charitable organization is located in Texas. They are focusing on helping individuals in the community who are suffering from cancer and their families. They also want help individuals with disabilities.

Read more: Qualifying for 501c3

Got An LLC But Need A 501c3

Some people already have a for-profit (or an LLC) organization set up and want to know if they can convert it to a 501c3 non-profit organization. Unfortunately, an LLC cannot be a 501c3; However, you can still setup the 501c3 organization.

 

An LLC Cannot be a 501c3

The LLC organization can’t be a 501c3 nonprofit organization for two main reasons. The first main reason is that a for-profit organization has an owner or multiple owners. Nonprofit organizations do not have any owners because they are established for the public. So the original paperwork filed for the organization is not compliant with the IRS requirements for 501c3 nonprofit organizations.

Read more: Got An LLC But Need A 501c3

501c3 Board Members and Officers

The Board “Members” or “Directors/Trustees” are elected and their main goal is to manage the nonprofit organization’s activities. These specific positions should be filled first by the Board of Directors: President, Treasurer, and Secretary. Other optional positions, once those three are filled, could be Vice President and Director. They usually serve for 1-3 years, and then the Directors are reelected.

The powers, rights and responsibilities of the Board of Directors are specified in the Bylaws of the 501c3 charitable organization. The Bylaws consist of general information about how the Board of Directors is elected; scheduling Board meetings; decision-making methods; Board of Directors’ duties and other specific rules, applicable to the charitable organization’s activities.

Read more: 501c3 Board Members and Officers

Nonprofits and Technology

 

In this internet driven world, all organizations have to stay updated on their technology usage in order to be relevant. This especially includes nonprofit organizations. The main types that are most helpful are website builders, apps, Google tools, and Microsoft centers.

 

Website Builders

Websites are the key to showing your audience your mission statement, purpose, programs, and other essentials to your specific organization. There are a few free and low-cost website builders that are highly recommended. Wix is the most commonly known low-cost website builder. All reviews say that it’s easy to use and has many useful features. The basic plan is free, but you could also go for one of the low-cost, ad-free options if you prefer that. Another good website builder is Weebly. This company also provides a multitude of pre-made templates and features to help with creating your website. Their basic plan is free as well, but they also provide other paid plans that start at $8 per month. One website builder that has been getting a lot attention for the past year is Squarespace. This company is mainly known for their minimalist templates and intuitive editor interface. When you first sign up they give you a 14-day free trail, and after that their basic plan starts at $12 per month.

Read more: Nonprofits and Technology

Crowdfunding Sites For 501c3 Nonprofits

 

Crowdfunding is a method of raising money through the collective effort of friends, family, customers, and individual investors. The main objective is to get a large number of people to donate a small amount each for your organization. Crowdfunding sites provide an easy place to showcase and provide financial transactions for people to donate. The top three of these sites are GoFundMe, YouCaring, and FirstGiving.  If you're looking to crowdfund for your nonprofit and you're confronting questions for the first time, you should start by checking out the information provided by the National Council of Nonprofits.

Read more: Crowdfunding Sites For 501c3 Nonprofits

501c3 Public Charity or Private Foundation

 

Every section 501c3 organization is classified as either a private foundation or a public charity. Private foundations and public charities are distinguished primarily by the level of public involvement in their activities. Though greatly outnumbered by public charities, private foundations bring a lot to the table. Many people have a layman’s understanding of the difference between public charities and private foundations, but there are some significant differences that can determine what type of nonprofit organization you want to setup.

Read more: 501c3 Public Charity or Private Foundation

Nonprofit Hunger Relief Organizations

As the holidays are approaching, remember that there are some individuals who are unable to have a nice hot meal or afford food. Thankfully, there are many charitable organizations set up exclusively to help these individuals. Usually there are two main types of 501c3 charitable hunger relief organizations: food pantries and meal centers.

Food pantries (or food banks) usually involve receiving donations of nonperishable canned food items and redistributing these items back out. These charitable organizations are focusing more on giving the grocery items to individuals who are unable to afford these items, but have a means of cooking them. Sometimes these nonprofit food pantries will also buy or take donations of groceries for specific families in need in the community.

Read more: Nonprofit Hunger Relief Organizations

Bookkeeping for 501c3 Organizations

Even though your 501c3 nonprofit organization is income tax-exempt with the IRS, you must file a yearly tax return. The easiest way to make sure you tax return is accurate each year, is to have an efficient bookkeeping system. Here are some basic tips for efficient bookkeeping throughout the year.

Know your fiscal year end. Most organizations choose December 31st, since it is also the calendar year end. But if your organization decided upon a different month as your year end, it is crucial to recall when that is. This will help when recording your data, as well as let you know when your year tax return with the IRS is due.

Keep track of your revenue and expenses. The revenues for 501c3 nonprofit organizations are different from most other types of businesses. These sources can include donations, program fees, sales income, membership dues, investment income, and proceeds from fundraising events. Whenever your organization receives revenue from any of the sources listed, you must keep detailed information about the revenue. For example, if a donor gives your organization a check, you will need to have the donor’s name and how much they donated. The expenses for your 501c3 nonprofit organization are also a bit different from for-profit businesses. These can include, but are not limited to, contributions to other charitable organizations, reimbursements, organization’s facility fees (utilities, rent), organization’s program expenses, and board of director’s compensation. Much like the revenue, these should be listed with details like what the expense is for, who it’s being paid to, etc. Keeping a good detailed list of your 501c3 organization’s revenue and expenses will be helpful for you in the future.

Read more: Bookkeeping for 501c3 Organization

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