ATTORNEY IN LOUISVILLE, KY
According to the National Center for Charitable Statistics, there are over 1.5 million nonprofit organizations registered in the United States. Nonprofit organizations are often established to further a social cause or serve the public’s needs. Due to the public benefits provided, these nonprofit organizations are often granted tax-exempt status by the Internal Revenue Service. Having experienced legal counsel when establishing a nonprofit can ensure that your charitable organization starts off on a strong legal footing and help avoid potential pitfalls.
If you’re considering starting a nonprofit, speak with an experienced nonprofit attorney for detailed guidance. At Chris Sanders Law PLLC, I’m committed to providing comprehensive legal guidance and advocacy for clients in legal matters of nonprofit development, formation, and ongoing support. I’m available to discuss your charitable goals and explore your possible legal options. As your legal counsel, I can walk you through every phase of the nonprofit formation process to ensure that you comply with the necessary requirements.
My firm, Chris Sanders Law PLLC, proudly serves clients in Louisville, around Kentucky, and across the country.
STARTING A NONPROFIT
A nonprofit organization is a non-business entity established with the purpose of serving a public need or improving lives within the community. These nonprofit organizations are committed to furthering a charitable, religious, educational, scientific, literary, public safety cause, or cruelty-prevention mission. This is why they’re given tax-exempt status by the IRS.
TYPES OF NONPROFIT ORGANIZATIONS
According to Internal Revenue Code Section 501(c), types of nonprofit organizations in the United States include:
Section 501(c)(1): Corporations organized under the Act of Congress, such as federal credit unions.
Section 501(c)(2): Nonprofit organizations established to hold titles for exempt organizations.
Section 501(c)(3): The most typical nonprofits, including religious, charitable, educational, literary, and scientific organizations. Most nonprofit organizations fall under Section 501(c)(3).
Section 501(c)(4): Social advocacy groups established to promote various kinds of social or nonprofit political and advocacy efforts, including civic leagues and social welfare organizations, volunteer fire companies, and homeowners associations.
Section 501(c)(5): Labor unions, and agricultural and horticultural organizations.
Section 501(c)(6): Trade or professional associations such as chambers of commerce, business leagues, and real estate boards.
Section 501(c)(7): Social and recreational clubs.
Starting a nonprofit can be an excellent and fulfilling way to serve a mission, assist a social cause, or help with public needs. To start a nonprofit organization:
Perform comprehensive research to identify or determine problems within your community that you want your nonprofit to address
Choose a name for your organization
Establish a solid plan for financing, especially during the initial stages
Build a solid foundation or structure for your organization
Recruit incorporators and initial directors
Prepare and file the articles of incorporation
Obtain an Internal Revenue Service Employer Identification Number (EIN)
Establish the bylaws and other governing policies
Hold a meeting of the board of directors
Apply for 501(c) tax exemption status
Maintain good standing and ensure ongoing compliance with all federal, state, and local agencies
HOW DOES A CHURCH OR RELIGIOUS ORGANIZATION DIFFER FROM OTHER NONPROFITS?
For tax purposes, religious organizations include places of worship, including churches, mosques, temples, synagogues, and other worship centers, as well as religious councils. Unlike other nonprofits, churches are not obligated to register with the IRS by submitting Form 1023 (Application for Recognition of Exemption).
WHO QUALIFIES FOR TAX EXEMPTIONS?
Tax exemption means an organization’s income and receipts that are not subject to federal, state, and local taxes. Qualifying for tax exemption requires the nonprofit to apply under Section 501(c)(3) of the Internal Revenue Code. To be eligible for tax-exempt status, the nonprofit organization must:
Be organized and operated exclusively for the exempt purposes specified
Have a charitable purpose
Ensure that earnings are not related to any individual or private shareholder
Not have political affinities or participate in partisan political campaigns
PITFALLS TO AVOID
Starting a nonprofit organization is both art and science. Consider getting good advice about
Staff and board development
Marketing and public relations
Markers for success and improvement
WORK WITH A
Starting a nonprofit organization with a simple mission can still be complex. Choosing a name, filing the articles of incorporation, drafting bylaws, obtaining licenses and permits, and applying for federal tax exemption requires detailed guidance and assistance from legal counsel. A knowledgeable nonprofit attorney can offer you the proper guidance you need to navigate important decisions.
Chris Sanders Law PLLC has the experience and resources to assist in nonprofit formation, development, and ongoing support suited to your organization’s goals and needs.
NONPROFIT ATTORNEY SERVING LOUISVILLE, KENTUCKY, AND ACROSS THE COUNTRY
If you’re considering starting a nonprofit organization, contact my firm — Chris Sanders Law PLLC — today to schedule a one-on-one evaluation. I can offer you the legal guidance, assistance, and advocacy you need to navigate key decisions. My firm proudly serves clients in Louisville, around Kentucky, and across the U.S. Call me today to get the assistance your nonprofit needs.