| While most people think of nonprofit organizations, or | | | | and property. This also frees you from liability and |
| NPOs, as charity groups, it is actually even simpler than | | | | insures that the NPO will continue after your death. To |
| that. NPOs do not distribute their earnings or surplus | | | | incorporate, you must fill out specific paperwork and |
| funds to shareholders or owners; instead, the money is | | | | file it with your designated state office. |
| given back to the cause pursued by the organization. | | | | Next, many NPOs can apply for tax exemption, as |
| Thus, besides charities, this definition also can apply to | | | | well as tax-deductible status. To become tax-exempt, |
| trade unions, advocacy groups, churches, and even | | | | you typically must be a corporation or another such |
| public arts promotion teams. | | | | group with legal standing. You should file for tax |
| Because nonprofits operate by donating their funds | | | | exemption with the IRS. The most common IRS |
| back to their cause, it is important to first create a | | | | tax-exempt designation is 501(c)(3). |
| mission statement if you are planning on starting this | | | | Tax-deductible status means that people who donate |
| type of organization. You should think about how you | | | | to your NPO can have tax deductions for their charity. |
| want the NPO to benefit your clientele or community, | | | | This can be very helpful for an NPO because it makes |
| as well as what values you want your organization to | | | | donations much more appealing. To earn |
| embody. This can help you stay on track with your | | | | tax-deductible status, you must apply to the IRS. |
| goals. | | | | As for directing your nonprofit in the way you want, |
| Once you decide on your cause, there are several | | | | you should set up a board of directors who are |
| different levels on nonprofits for which you can apply. | | | | dedicated to fulfilling the mission statement of the |
| First, you may just want to have an informal charity | | | | organization. Additionally, you should consider setting up |
| group led by you and a group of friends. This does not | | | | specific programs that help you meet your goals in |
| typically require legal paperwork to create because it | | | | serving the community or other group that benefits |
| function more like social/volunteer group rather than its | | | | from your work. Lastly, you will have the actual staff |
| own legal entity. | | | | that completes the day-to-day tasks of the |
| However, if you want to achieve true, legal | | | | organization. |
| not-for-profit standing, you should consider | | | | If you are thinking of starting a not-for-profit |
| incorporating your organization. Incorporation allows | | | | organization, you should speak to a lawyer to help you |
| your nonprofit group to have its own bank account | | | | file for incorporation or other legal statuses. |