Are you thinking about starting up a charity to give back to the community? If so, you will definitely need a helping hand. Starting a charity can be one of the most rewarding and fulfilling adventures that helps give back to the greater good of society. Charities can be religious, educational, or scientific in nature, or help specific causes such as cancer, homelessness, AIDS, or abandoned pets. Here is what you will need to get started:
► Overview of Starting a New Charity in California
- Form your Charity with the California Secretary of State. The first step will be having your charity formed in California as a nonprofit corporation. This is done with the Secretary of State, and will require filling out forms to become complaint with the Secretary of State, Franchise Board, and all licensing authorities and enforcement offices.
- Your Team. To hit the ground running, you will need a team of officers (Executive Director, Treasurer, Secretary, etc.) as well as a board of directors to help you manage the charity. Directors often contribute with the three T’s: time, treasure, or talent. You will want directors who have the time to help fundraising efforts for the charity, the funds to make personal donations to the charity, or be skilled in certain occupations (such as tax, legal, accountancy, public relations, etc.) to help your charity get the boost it needs.
- IRS Tax-Exempt Status. Once you are up and running as a California nonprofit corporation, you will need to apply to the IRS for tax-exempt status. The IRS has two tracks available for charities, a simplified form for smaller charities with straightforward fundraising activities, and a longer application for charities that receive more significant funds. The IRS application will require information about your activities, your officers, directors, how you intend to raise money, and how your programs will benefit the intended beneficiaries of your charity. You will be required to pay a governmental fee depending on how large your charity is, for processing of your application. An IRS application can be pending for weeks or months.
- Preparing the Fundraising Plan. After you acquire tax-exempt status, you will find that it is generally much easier to persuade members of the community to donate to your charity. To grow your charity, you will need widespread public support, and preparing a business or fundraising plan can help you get there. Try to clarify your charity’s objectives, activities, and resources, by laying out how you will go about raising more funds for the charity. You might be asked about the charity’s activities, operating expenses, and annual donations received by potential donors.
Setting up a new charity and acquiring tax-exempt status is not easy, but it can be tremendously fulfilling and a wonderful contribution to your local community. If you need help with any matter involving a California charity, give us a call and we will do our best to help.
► Getting Legal Help
If you are seeking a non-profit law attorney or a lawyer for your charity or foundation, contact Axis Legal Counsel today. Our Nonprofits and Charities practice provides full-service representation of Non-profits and Charities in a wide variety of legal matters. We represent nonprofits and charities in charity-governance matters, the 501(c) tax-exempt process, operations, handling of donations and donor-advised funds, investigations, labor/employment, intellectual property, tax-exempt law, charity law, disputes, controversies, litigation, real estate, and numerous other legal matters. Axis represents new non-profits form and do business in California. We assist clients maintain the corporate health of their businesses by adhering to the requirements and formalities necessary to remain in good standing with the appropriate governmental agencies. We assist charities with tax-exempt applications, IRS inquiries, and general tax-exempt advice and counsel. Axis also assists nonprofits and charities with a wide variety of intellectual property and licensing matters, ranging across copyright, trademark, trade secret, licensing, confidentiality, and related matters. Contact us today at 213-403-0100 or [email protected] for a confidential consultation.
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