How to Start a Charity - Cleveland 19 News Cleveland, OH

How to Start a Charity

While starting a charity may seem like a daunting task, anyone with dedication, patience, and the ability to follow directions can successfully incorporate a charitable organization. There are federal, state and local requirements for starting a charitable organization, and there are multiple organizational structures to choose from, so make sure to do your research and check with all appropriate authorities. If you follow the steps below you will be able to create your own charitable organization with less hassle than you might think.

 

1. Think about what kind of charity that you want to have. If you want to start a non-profit organization as identified by Section 501(c)(3) of the Internal Revenue Code, your organization's activities will have to be charitable and will have to fall under certain categories. The most common categories are community benefit, religious, scientific, and educational.

 

2. Decide if a 501(c)(3) non-profit organization is best suited to serve your charitable goals. In addition to non-profit organizations, there are also charitable trusts. Trusts differ from non-profits in that they are centered more on the allocation of money than on the allocation of community services.

 

3. Define your mission. What is your organization going to do? What service will it provide your community? Once you've figured out your mission, write it out in a formal mission statement. It may seem silly to write a mission statement, but it's absolutely necessary, and it's very important-a good mission statement succinctly communicates to others-volunteers, community members, and potential funders-- what you do or what you hope to do. The mission statement should be short (1-5 sentences, ideally), clear, and free of jargon. If you're having trouble writing, visit established organizations' web sites and study their mission statements.

 

4. Create Articles of Incorporation for your charity. Articles of Incorporation lay out the foundations of your organization. You can find sample Articles on the internet. Articles of Incorporation state the purpose, name, duration of operation, type, structure, and other basics of your organization. Most states have forms online that you can fill out. Be aware that some states require at least two signatures on Articles of Incorporation.

 

5. Write the bylaws for your organization. Template bylaws can be found online. Bylaws are the rules that govern your charity. A set of bylaws will define how decisions are made, who makes the decisions, what type of governing structure will direct the charity, how the organization will be set up, and how conflicts will be resolved.

 

6. File an application packet for a non-profit organization with your state Secretary of State. A non-profit charity is considered a corporation, so generally application paperwork is directed to the corporations division of the Secretary of State. There is usually a small fee associated with filing.

 

7. Get a Federal Employer Identification Number (EIN). The EIN is the number the IRS uses to identify your organization for tax purposes. You'll need the EIN on just about every form you fill out from now on, including IRS paperwork and grant submissions. You can call the IRS at (800) 829-4933 to get an EIN assigned immediately, or you can apply online, by mail, or by fax.

 

8. File with the Internal Revenue Service for recognition as a charitable organization. There are charitable organization application packets available online (see external links below). The IRS reviews applications for recognition as a charitable organization on an ongoing basis, so you can apply for charitable status at any time. The packet will ask you to submit information on what your organization will do, who it will benefit, how it will administered, and who it will serve. It is important to note that you must first complete your Articles of Incorporation and your Bylaws, and they get accepted by the Secretary of State prior to applying for federal charitable status.

 http://www.irs.gov/Charities-&-Non-Profits/Application-for-Recognition-of-Exemption

 

 

9. Set up a board of directors and a registered agent. The board of directors will help guide the charity and will make decisions. The registered agent is a person that resides in the state of incorporation-he or she is responsible for receiving official communications from the state.

 

10. Start becoming active in your community. Advertise what you are doing, who is going to benefit, and how you are going to go about doing it. Try to get involved in partnerships with other charitable organizations. Even a small role on a larger project can build credibility and recognition for your fledgling organization.

 

11. Write grants, raise funds, create programs, hold events, bring people together, solve problems, and generally make the community, state, or world you live in a better place!

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