COUNSELING NON PROFITS

          The following points are intended to identify the several items that need to be addressed by those who are attempting to obtain formal 501c3 certification for a non profit. There are several books and two presentations in the Erie SCORE office that will also assist the counseling process for those trying to start a non profit as well as for those counseling existing non profit organizations. Both of these presentations are being reviewed and prepared for review by the SCORE membership.

           Non Profits should be encouraged to prepare a business plan for their organization, just as a for-profit business should. This process will help to identify the mission, the population affected, the specific niche that the new organization expects to fill that makes it unique form existing organizations, funds required for operation, the expected source of the funds and potential alliances that could assist operations, just to name the obvious.

           The persons trying to prepare an organization for 501c3 certification should prepare the following prior to seeing a lawyer for the formal document submittals:

·       For incorporation, the full name and address of the corporation and a brief summary of its purpose.

·       Identify the names, addresses and phone numbers of the individuals who will form the first board of directors. A president, secretary and treasurer must be named, and additional officers (for example, one or more vice presidents) may also be named.

·       The mailing address of the treasurer must be specified.

·       If the group has already been operating as an unincorporated association, and have obtained an employer I.D. number from the IRS, please provide this.

·       If the fiscal operating year is going to be different from the calendar year for accounting purposes, identify such.

·       The incorporation process is relatively simple and can be completed in a matter of a few weeks. Filing and advertising costs for the incorporation will be approximately $175.00, and the person filing should be prepared to write a check in that amount at the initial meeting with the attorney. Having the required information completed may eliminate the need for subsequent costly meetings.

• A detailed and complete description of the organization’s present and planned activities, services, programs, etc. Copies of any newsletters, brochures, mission and vision statements, business plans, publications and the like should be supplied. If a website exists, provide the address.

• In addition to the list of directors and officers with names, addresses, and phone numbers as indicated above, please indicate whether any of these individuals are presently or will be compensated by the organization, the amount of such compensation, and whether any are related to each other by a family or a business relationship. Similar information should be provided for any other individual, even if not a director or an officer, who is receiving or will receive payment from the organization. Resumes of the directors and officers will be helpful.

 

• If the organization has or will have voting members in addition to the board of directors, the criteria, dues, if any, for membership should be specified. What will the dues be used for? How often will membership meetings be held?

 

• Provide copies of any and all leases, contracts, or other agreements that the corporation has entered into, especially those entered into with board members and officers. If any evidence has been obtained that amounts paid under such contracts reflect fair market value, please provide copies.

• Describe all types of fundraising planned and how such fundraising will be conducted. Will bingo or small games of chance be conducted to raise funds?

• If the organization will provide grants or contributions to others, please describe these in detail and describe how recipients will be selected and how use of the funds for charitable purposes will be verified (this includes scholarships).

• If the organization is already operating, provide complete financial statements (balance sheets showing assets and liabilities and income statements showing receipts and disbursements) for at least the last three years. If the organization is not yet in operation, provide any information available or estimated for the current year along with proposed budgets for the next two full years.

If the organization’s average annual gross receipts have exceeded or will exceed $10,000 annually over a four year period, the filing fee will be $500. If less, the fee is $150. Again, these amounts should be available at your initial meeting with the attorney.

Requested information should be clearly labeled, indicating the nature of the information contained in each document.   Please submit the required information to Robin Koble, Non Profit Pro Bono Project, 127 West 6^th Street, Erie, PA, 16501. Dates for review of the information are available from Robin.