Why Set Up a 501c3 Organization?
Nonprofit organizations exist to serve the unmet needs of people, animals or the environment. Nonprofit organizations fall under section 501(c)(3) of the IRS tax code, qualifying them for income tax exemption under federal law.
One of the major benefits of being tax-exempt under IRC Section 501(c)(3) is the ability to accept contributions and donations that are tax-deductible to the donor. Additional benefits include, but are not limited to:
501c3 Financial Statements - Preparation (Part 1)
Generally, small charities and nonprofits with budgets under $50K/year can prepare their own financial statements: Profit & Loss Statement and a Balance Sheet.
Below are some tips that will lead you through the tedious process of organizing your nonprofit’s financials and how to use the financial information:
Read more: 501c3 Financial Statements – Preparation (Part 1)
501c3 Financial Statements - Usage (Part 2)
As a part of the successful nonprofit management, each 501c3 needs to come up with the financial statements at the end of the reported period. The financial statements (Income Statement and a Balance Sheet) bring a valuable information on the financial health of the nonprofit. Based on the numbers, the Board of Directors may decide on a new strategic plan for development and on a new direction in order to guarantee a sustainable growth.
Quite often, the Board members prepare the financial statements and use them for:
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