Marc Alexander Explains how to Establish a Non-Profit
In the world of business it is great to know a little about every industry, so I am going to give you some food for thought about the non-profit industry. Within a matter of a week anyone can have a non-profit company registered with their state simply by filing a “Non-Profit Articles of Incorporation.” Although you are registered as a “non-profit” your company is not fully recognized as a tax -exempt non-profit organization.
The 501 (c) 3 application, once approved by the IRS, allows an organization to become tax-exempt. This sought out status for tax-exemption provides numerous benefits. For starters, your organization is exempted from paying taxes on purchases. So when your organization goes to make a purchase of any size, you simply present your “Tax-Exempt” number and your can avoid the taxes that must be paid during purchase. The biggest plus of having this status is that it opens the doors for potential funding opportunities. When someone wants to donate to your organization they can now deduct that donation when filing their taxes, whereas they would not be able to do so with a non-profit that is not tax-exempt. Aside from donations, there are also grant opportunities. When dealing with some of the larger, six figures and up grants, some will require the applying organization to be tax-exempt in order to even apply.
The application itself is about 22 pages and has a fee of $300 if your organization’s annual revenue is below $10,000 and $750 if it is above $10,000. Remember, that this fee is applied each time you submit your application, so I advise doing it right the first time to save money and time. Well, this is everything you did and didn’t know about the 501 (c) 3 status in the non-profit industry.
Marc Alexander has been president and CEO of Youth of Tomorrow, a non-profit offering innovative programs to the youth for over four years. Visit Marc’s website for more information.
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