More Notes on Non Profit Status

Following up on my post about forming a non profit here in Orlando, here are some notes that might help you get through the process a little faster:

  1. In the corporate filing for the state, use the IRS recommended language: Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Cost varies by state.
  2. Get your EIN online. Free.
  3. File the IRS Form 1023. You’ll want to use the streamlined application, the other one will make you cry. Take your time filing this out. I forgot to save the NTEE code I used (Sorry!). $285
  4. File for state tax exempt status. This is optional. Think about how much sales tax you pay and whether you want to invest the effort (about 30 minutes to find the form and complete for Florida). Free.
  5. Write your bylaws and choose the Board. I encourage you to take both seriously. Requirements vary by state, so take the time to read the state requirements (kind of a grind) and then look at what other non profits use (I just Googled for ‘florida non profit’). Most are similar. The key is to write high level governance, keep most of the details in process documents. Details matter. You should include the requirement language from #1 above (read the link!). Then look for stuff that matters. For example, here in Florida the Board can meet as long as they can hear each other. In-person, phone, Hangout, etc are all ok, group text message is not. You can read our initial bylaws here. I can’t promise they are perfect (or don’t have a typo or two), but you’re welcome to use them as a starting point for your own.
  6. Have your first Board meeting. Be sure to take notes for the minutes. Florida requires one annual meeting a year, be sure to check your state.
  7. Open a business checking account. I use BB&T for this. Had to go to the branch, they looked up the corporation to verify non profit, done in about 30 minutes.
  8. Set up a business PayPal account. Not required, but I’m guessing most of you reading this will want it for accepting SQLSaturday funds.

That’s the core. Here’s some other stuff you might want to do:

  1. Buy a domain, grab Twitter and whatever other social media accounts you’re going to use. (Done)
  2. Set up a website and buy a logo. (No logo yet)
  3. Register on TechSoup, they have a catalog of free and discounted software and services, and many companies use them to validate that you are legit. (I haven’t finished yet)
  4. Pick an accounting solution. (Not done yet, but hoping one of the online ones will be free/cheap).
  5. Set up a shared folder for the org on the “drive” of your choice and scan in all the official documents, load the bylaws, minutes, etc. Give your Board read access to that.
  6. Set a reminder to have an annual meeting.

I used this book, plus a lot of online reading to get through the process. There are sites that will help you do it for a fee – I don’t know if worthwhile or not. My take is that a few hours learning about how it all works is time well spent. You’re forming a legal entity, you’ll be filing a tax return – you want to know that you’re doing the right stuff. Obviously I’m neither an attorney or accountant, just sharing what I learned and what I’ve done so far. If you find something I’ve missed or that I should add, let me know.