This information is provided by:
Michael Wexler
Wexler Law Group, Inc.
12526 High Bluff Drive, Suite 300
San Diego, CA 92130-2067
858.792.3540 FAX 858.792.3501
michael@wexlerlawgroup.com
Concept:
A nonprofit corporation would obtain IRS approval under Internal Revenue Code section 501(c)(3), as a tax-exempt Public Charity.
Advantages:
Public Charity status may help you rent a meeting room at a discount, and collaborate with other local charities. A Public Charity can receive tax-deductible charitable contributions, and can apply for grants.
Timeline:
Roughly 2 months, thanks to new IRS Form 1023-EZ for eligible nonprofits. (Projected gross receipts must be less than $50,000 for first three years.) Form 1023-EZ is only 3 pages, filed online, without even a sentence describing your charity - just a 3-digit classification code.
Your Team:
In California, for example, you need a second person to be the Secretary, if you are the President. The Board of Directors (listed on Form 1023-EZ) should include you and at least two unrelated volunteer Directors.
Filings:
As for any corporation, there are filing fees to incorporate in your state and file annual reports. IRS charges $400 for Form 1023-EZ. Most states require charities to register with state Attorney General or another regulator. In some states, your charity has to apply separately for tax exemption, like California FTB Form 3500A (2 pages). The annual IRS tax return for a small charity (under $50,000 gross receipts) is Form 990-N, which is like an online postcard.
Alternatives for Existing Businesses:
File long Form 1023 (generally $850 fee). Or consider converting to a “benefit corporation” in your state, which is not a Public Charity, but could provide some halo effect.
For more information:
https://www.irs.gov/uac/About-Form-1023-EZ
EZ State charity regulators:
http://www.nasconet.org/resources/
THIS SUMMARY PROVIDES GENERAL INFORMATION. FOR LEGAL, TAX OR OTHER PROFESSIONAL ADVICE, YOU SHOULD CONSULT YOUR PROFESSIONAL ADVISORS.
2-18-16