Does anyone have experience with starting or operating a 501(c)(3)?

#1
ClearwaterVol

ClearwaterVol

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#1
My fiance, daughter and I have been adopting families at Christmas for the last few years. Basically, we get kids' christmas lists and fill them for local families who struggling. We adopted the kids of a woman who was escaping an abusive husband and had to leave her career behind and go into hiding in a new city one year, another we adopted because the father was hospitalized in ICU for several months beginning in Oct. Anyhoo, last year we told a couple of people about our pet project and assistance came pouring in. We aren't talking about a bunch of money, but people were leaving small cash donations in envelopes on my porch. I wanted to separate things and legitimize the effort. I also was curious if we could expand our efforts.

thus far I have

1. Incorporated
2. 501c3 status by irs
3. bank account
4. CPA on board (donating his time)
5. Started fundraising.

What are the pitfalls I face and what should I be doing?
 
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#5
#5
Just make sure the EIN is being used for the donation setup, bank accounts, etc. Otherwise the IRS will tie it back to you as income. Nonprofit taxation can be complicated, it’s important to have things like a charter or articles of incorporation handy for reporting purposes. They also tend to be scrutinized by the government a lot more. Have you gotten a sales tax exemption cert from your state? You will need that when buying things.
 
#6
#6
DancingOutlaw said:
Just make sure the EIN is being used for the donation setup, bank accounts, etc. Otherwise the IRS will tie it back to you as income. Nonprofit taxation can be complicated, it’s important to have things like a charter or articles of incorporation handy for reporting purposes. They also tend to be scrutinized by the government a lot more. Have you gotten a sales tax exemption cert from your state? You will need that when buying things.
Click to expand...

I have done all of the above and requested the tax exempt certificate. TY.
 
#8
#8
DancingOutlaw said:
Just make sure the EIN is being used for the donation setup, bank accounts, etc. Otherwise the IRS will tie it back to you as income. Nonprofit taxation can be complicated, it’s important to have things like a charter or articles of incorporation handy for reporting purposes. They also tend to be scrutinized by the government a lot more. Have you gotten a sales tax exemption cert from your state? You will need that when buying things.
Click to expand...

I have done all of the above and requested the tax exempt certificate. TY.
 
#10
#10
Good luck in your efforts. A potential resource is Alan Cantor. He is a consultant to non profits and has a useful website and blog. He has been helpful to me via email regarding questions I’ve had regarding donor advised funds. You might check out his website and previous blogs and contact him if you want further information.
 
#11
#11
OldandStillaVol said:
Good luck in your efforts. A potential resource is Alan Cantor. He is a consultant to non profits and has a useful website and blog. He has been helpful to me via email regarding questions I’ve had regarding donor advised funds. You might check out his website and previous blogs and contact him if you want further information.
Click to expand...

thanks, I will check it out. Do you have a non-profit
 
#12
#12
My focus has been local families here in Florida, but if Volnation wants to help out... I would make a commitment to helping out one or more struggling Volunteer families.

We started the idea several years ago and we were so humbled by the Christmas lists we received. Clothes, books, toys, but almost nothing over $30.00. It made us realize how blessed and spoiled we were. It truly is a process that I get more out of than I put into it. I didn't post this with the intent of soliciting donation, but really just want to make sure I do it right. In addition to the kids' lists, we are also partnering with a local business owner that gives out christmas dinners (the groceries) to struggling families and co-sponsoring that event this year. It is my favorite thing I do every year.
 
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#14
#14
ClearwaterVol said:
My focus has been local families here in Florida, but if Volnation wants to help out... I would make a commitment to helping out one or more struggling Volunteer families.

We started the idea several years ago and we were so humbled by the Christmas lists we received. Clothes, books, toys, but almost nothing over $30.00. It made us realize how blessed and spoiled we were. It truly is a process that I get more out of than I put into it. I didn't post this with the intent of soliciting donation, but really just want to make sure I do it right. In addition to the kids' lists, we are also partnering with a local business owner that gives out christmas dinners (the groceries) to struggling families and co-sponsoring that event this year. It is my favorite thing I do every year.
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Good on you. I would be happy to contribute, but don’t have Facebook. Any other way to donate or should I send some cash to that address?
 
#15
#15
golfballs said:
Good on you. I would be happy to contribute, but don’t have Facebook. Any other way to donate or should I send some cash to that address?
Click to expand...

The address for now. The bank account is not set up for zelle yet, but its on my to do list
 
#17
#17
ClearwaterVol said:
My fiance, daughter and I have been adopting families at Christmas for the last few years. Basically, we get kids' christmas lists and fill them for local families who struggling. We adopted the kids of a woman who was escaping an abusive husband and had to leave her career behind and go into hiding in a new city one year, another we adopted because the father was hospitalized in ICU for several months beginning in Oct. Anyhoo, last year we told a couple of people about our pet project and assistance came pouring in. We aren't talking about a bunch of money, but people were leaving small cash donations in envelopes on my porch. I wanted to separate things and legitimize the effort. I also was curious if we could expand our efforts.

thus far I have

1. Incorporated
2. 501c3 status by irs
3. bank account
4. CPA on board (donating his time)
5. Started fundraising.

What are the pitfalls I face and what should I be doing?
Click to expand...
Great work! As someone who has chaired a 501c3 for 10 years I would first check to see what other organizations might already be doing the same or similar. The biggest thing I’ve run into is overlap of services.
 
#18
#18
I'm no help. I can barely operate a V8 5spd. Great thing you are doing, though. Good to see you maximizing the opportunity and doing it so professionally and organized.
 
#19
#19
#4 is what I would have recommended. I know you're a lawyer but is this within your specialty area? If not, that would be my recommendation - get legal representation specific to not-for-profits.

oh and I echo the good on you comments - nice work.
 
#20
#20
Roustabout said:
Great work! As someone who has chaired a 501c3 for 10 years I would first check to see what other organizations might already be doing the same or similar. The biggest thing I’ve run into is overlap of services.
Click to expand...

It's really just been something we enjoyed doing
 
#21
#21
ClearwaterVol said:
It's really just been something we enjoyed doing
Click to expand...
Cool. You asked for advice. The reality is you don’t need a 501c3 if this is just your family’s personal mission. If you are trying to scale it up to a budget and tax benefit donations then you need to take an honest look and see how another group may already have infrastructure and other experience doing similar or same. This may afford a partnership or resources to even help you. No need to reinvent the wheel and as I mentioned, there often is a bit of unknown overlap. Sometimes you can even step on toes (I’ve seen it).

Personal anecdote. Our group gave out backpacks of school supplies to urban youth for several years. I was speaking with a youth and asked him where he went to school and his thoughts on his supplies. Turns out we were the 3rd group to provide him a back pack that week.
This led to some analysis, and sure enough with a little research we found several agencies and church groups already doing this. It was really eye opening because it wasn’t our focus and giving it up allowed us to channel resources (time and money) to better use. We also were able to connect with other benevolence groups. Our primary mission is not duplicated by any other group, so these others agencies now know about our focus.

Since that experience around a decade ago, we’ve interacted and partnered with dozens of benevolence groups and agencies. This has strengthened everyone involved and better served the people we’re all trying to help.
 
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