Welcome to the blog for the Non-Profit and fund raising sector.
As the Non-profit Funding Center Supervisor, I’ve been asked many times how to become a non-profit. People have heard that grants are available to non-profits, and they are hoping to get some. When I explain about the 30 page form that the IRS requires, and the $850 non-refundable application fee, that tends to dissuade those that inquire. If after hearing the above, they are still interested, because they believe they can help alleviate some societal concern, I ask what homework have they done to see if any existing organization is already doing what they are hoping to do. If they can lend their talents to an existing non-profit, then it makes that organization stronger, and their mission to serve can be achieved.
For purposes of this blog, I will be referring to 2 different types of non-profit. Those that are helping a certain cause, and not caring to become a tax-exempt organization; and those that care and apply for tax-exempt status with the IRS.
Any group of people can call themselves a non-profit, if they generate less than $5,000 a year, and do something for the public good. They can not, however, tell people that any monetary or in-kind donations are tax deductible. The right is only for those non-profits that have filed the necessary paperwork with the IRS, and received a Letter of Determination. These 501 (c) 3 – referring to the statute in the IRS Code – Non-profits can and should make that information known. The majority of grantmakers will ask for the Letter to verify their status, and individual donors will benefit from the tax deduction.