Starting a Non-Profit 501(c)(3)? Preliminary Considerations

Starting a Non profit – Preliminary
Questions:

 

First
things first
:  Remember, a 
non-profit
501(c)(3) organization
is first and foremost a business

 

People
start non-profits for a great variety of reasons and to serve a vast array of
needs.  Indeed, the whole basis of a
tax-exempt organization is to serve the community and tax-exempt status is
available to almost any idea for an activity that benefits the community. 

The
secret is that the idea must fit within the following categories:  religious, charitable, scientific, testing
for public safety, literary, educational, sports competition.    These categories are broad and if your idea
seems to fit in more than one, that is even better.   The category your choose depends on
the activity that your organization is going to perform.  Additionally, the business form of your
non-profit depends on what activity it will perform.   Thus, 
the first major question to answer is: What is the Activity of your non-profit
501(c)(3)
concept?

 

What is the Activity of your non-profit
501(c)(3) concept?

It
may seem like an easy question to answer. 
I hope that it is.  However,
sometimes the hardest part is to define the activity in writing.  This is an important step because all non-profit
501(c)(3) organizations
must state their purpose to attain the coveted
tax-exempt status.    Furthermore,  the activity or purpose does influence the
type of entity to create for the non-profit. 
If your idea for a non-profit 501(c)(3) organization is to assist
another non-profit 501(c)(3) organization, then this is more aligned with a
joint venture and makes a different business entity  then if the non-profit 501(c)(3) organization
you have in mind is to be wholly independent of other nonprofits.

 

Who Conducts the activity and how?

This
question is of paramount importance.  It
is an important question for any type of business,  a non-profit 501(c)(3) organization is no
exception.  To break this down into a few
easier questions to answer,  lets think
about it in terms of category. First, 
how is the non-profit
501(c)(3) organization
going to be governed?  Who makes decisions? How are they made? Is
there a board or a panel that makes decisions for the non-profit 501(c)(3)
organization?   And Second, how does the non-profit
501(c)(3) organization interact with the community?  Who carries out the activities?  How?

 

While
there are a few more important questions to consider that are unique to a non-profit
501(c)(3) organization.  These two umbrella
questions will have you well  on your way
to a successful launch of a non-profit 501(c)(3) organization.   Visit
the website for more information
.

 

‹ Blogs Home