Starting a Nonprofit Organization Focus Area: Grants Education Instructor: Vince Franco

1. Starting a Nonprofit Organization Focus Area: Grants Education Instructor: Vince Franco

2. For additional help Technical Assistance Hotline 1-866-973-2760

3. Course Description & Objectives Course Descriptions: Once you have a focused organization and a plan in place, you may be ready to start a 501 (c)(3). This course will guide attendees through the process of establishing a Board of Directors, incorporating as a nonprofit organization, creating bylaws, holding organizational meetings, and much more. Course Objectives: After this course, attendees will be able to: • Describe the process of incorporation; • Utilize best practices to form a Board of Directors; • Conduct a meeting to adopt bylaws and goals; • Create a records book; and, • Apply for 501 (c)(3) status using IRS Form 1023. Starting a Nonprofit Organization #1

4. Your Presenter Vince Franco Grants Compliance ManagerNative Learning Center (NLC) 6363 Taft StreetHollywood, Florida 33024 VincentFranco@semtribe.com 1-954-985-2300 Ext. 10651

5. Any Questions? • If you have a question please use the hand tool to raise your hand and type your question into the chat box (next slide). • The presenter will work to answer your questions as quickly as possible. Questions will be answered in the order they were received. • Please remember to complete theclass survey at the end of this course.

6. How to ask a question

7. Technical Issues? Unable to hear us?

8. Topics • Building an Organization and Defining Your Mission (Review) • Choosing a Business Name • Incorporating your Organization • Articles of Incorporation • Putting Together a Board of Directors • Developing Bylaws • Holding an Organizational Meeting • Registering for an Employer Identification Number • Applying with the IRS for 501(c)(3) Nonprofit Status • Sales Tax Exemption • Contributions and Applying for Grants and Funding

9. Building an Organization and Defining Your Mission (Review) • Implementing a Needs Assessment • It is a survey of potential customers • Helps to identify other organizations doing what you do • Conducting a SWOT Analysis • Defines your Strengths and Weaknesses (Internal) • Defines your Opportunities and Threats (External) • Developing a Mission and Vision Statement • A strong mission shows why an organization exists and its overall purpose • A strong vision supports the mission by showing the future path of an organization • Creating a Logic Model, Goals and Strategic Plan • Helps to define the purpose of an organization • Helps to determine the everyday direction as well as long-term objectives • Developing Partnerships

10. What do you think a successful nonprofit organization looks like?

11. Choose a Business Name • Avoid numbers and colors • Avoid fads and clunky names • Keep it short • Make it memorable • Sound like you belong • Check with the State • Do your homework First, you need to choose a business name and check for availability. Every state has a Division of Corporations that will allow you to search for available corporate names, as well as outlining any restrictions on naming. You should also familiarize yourself with the statutes in your state that deal with incorporation and nonprofit organizations. In the State of Florida, go to: http://www.sunbiz.org.

12. Choose a Business Name In most states, the potential nonprofit's name may not be the same-as or similar-to other names on file. In addition, watch out for the situationstated below. Nothing is more important for an organization than having a name that is logical and easy to remember. Some names look great, however, the names may be memorable for the wrong reasons. Many bad names come about because of poor planning. However, some of the worst names are unintentional.

13. Choose a Business Name Here are some naming situations to avoid. And here are some examples of bad names and name changes. Now that you have carefully considered a name, let’s move on.

14. Incorporate your Organization If you are located outside of Florida, then you will need to check with the National Association of Secretaries of State to determine the process and filing fees for incorporation. Go to: www.nass.org. The filing fee is usually between $50 to $200, but it varies by state. For more information on incorporation in the State of Florida, go to the Division of Corporations at: http://www.sunbiz.org. Next, let’s look at what you need.

15. Articles of Incorporation • Incorporationis a process that establishes an organization as a legal entity. It also shifts liability of the organization from an individual to the corporation. • Usually conducted at a state level. • Usually requires the completion of Articles of Incorporation and a fee. • Articles of Incorporation require serious decision making regarding the structure of the organization. Let’s look even closer.

16. Articles of Incorporation

17. Board of Directors In most states, you must have at least three Directors, who are age eighteen or older, for your nonprofit organization. Normally, your Directors do not have to reside within the state, but check your state’s requirements. All of the Directors should be selected, in part, for their ability to raise money. This is very important because raising funds is an organizational effort and everyone should be involved in generating revenue to operate the organization. Look for people with work experience in sales or business.

18. Board of Directors What are some common themes and recommended personal qualities of a strong Board of Directors member? For more information on the qualities of Board members, go to: http://www.governanceprofessionals.org/society/Governance_for_Nonprofits_-_Board_Members_Personal.asp

19. Bylaws There are usually no set criteria for the content of Bylaws, but they typically set forth internal rules and procedures. There are a number of web pages out there that have sample Bylaws, including http://www.ehow.com/how_7518601_develop-bylaws-nonprofit.html and www.grantspace.org. You might or might not be required to file Bylaws with your state, but in most cases, you must keep a copy at your organization's principal place of business. Check with your state to make sure. Let’s look closer at Bylaws. BYLAWS Article I Purpose Article II Office Article III Board of Directors Article IV Officers Article V Committees Article VI Employees Article VII Miscellaneou

20. Bylaws Power*: authority to “oversee” or authority to “manage” the affairs of the organization. New nonprofits may require Directors who have the ability and authority to oversee operations. More established nonprofits may require Directors who manage the process.

21. Organizational Meeting Hold an Organizational Meeting and create a Records Book. You will need this book to store important documents concerning your organization. Check your state’s nonprofit recordkeeping requirements for specific information about what you need to record in your Record Book. Bring this book to all meetings. • CORPORATE RECORDS • Articles of Incorporation • Bylaws • List of Board of Director Members • Official Minutes from Meetings • Other Documents

22. Organizational Meeting Consider implementing the following activities before and during your first organizational meeting. Before the meeting: • Select a date, time and location, and then announce the meeting. If not already included in your Bylaws, select a date, time, location and frequency that is conducive for all. Send emails or postcards to confirm. • Create a first agenda that includes the issues below. During the meeting: • Name and approve the Board of Directors, Officers, and the Executive Director; • Adopt the Bylaws and major goals or strategic plan; • Adopt a budget and major events, if any; • Approve an accounting system and fiscal year; and, • Select a bank. Look for a bank that has accounts for nonprofits with low minimum deposit requirements. Name and Approve the BOD Adopt the Bylaws Adopt a Fiscal Year

23. Employer Identification Number Request an Employer Identification Number from the IRS, with or without employees of the organization. This can be done via an online application at www.irs.gov. Use IRS Form SS-4, Application for Employer Identification Number. The federal government and many state and local agencies use the EIN to identify your organization. Let’s look closer.

24. Employer Identification Number Sample of questions on the Application for Employer Identification Number (IRS Form SS-4). Keep in mind that some items will and will not apply to your organization. Now it’s time to formally apply for 501 (c)(3) status. • Corporation • New Business • Other (specify)

25. Applying for 501(c)(3) Status with the IRS Become familiar with the Applicationfor Recognition of Exemption (IRS Form1023). Read the instructions carefully. This is a comprehensive 23-page form and may require you to seek accounting and/or legal assistance to complete it. IRS Form 1023 requires a lot of leg work, but don’t worry, many other people have completed this form successfully. So let’s look closer.

26. Applying for 501(c)(3) Status with the IRS Listed below are standard questions and attachments for the Application for Recognition of Exemption (IRS Form 1023).

27. Applying for 501(c)(3) Status with the IRS After approval of incorporation and the return of your filed Articles of Incorporation by the Division of Corporations in your state, which usually takes about 30-60 days, you can submit IRS Form 1023. Once you get your IRS exemption, you can apply to your state for a Sales Tax Exemption. So let’s look closer. Keep in mind that you must file IRS Form 1023 within 27 months of the date of the establishment of the organization or when your Articles of Incorporation were approved and returned to you.

28. Sales Tax Exemption

29. Contributions • Wait until incorporation is finalized in your state and you have the letter of 501 (c)(3) status from the IRS before trying to raise money through contributions. • Why? • Before incorporation, you are personally responsible for how you handle money. Also, you cannot tell potential donors that their contributions are tax deductible until you are officially declared a tax exempt nonprofit by the IRS. Your Organization

30. Contributions • However, if you need to start raising funds before state-approved incorporation and IRS-approved 501 (c)(3) designation, you can use a Fiscal Sponsor. • A Fiscal Sponsor is simply another nonprofit organization that is willing to handle your donations for you. This situation is also known as Nonprofit Managementor Nonprofit Incubation. • For more information on Fiscal Sponsors, Nonprofit Management and/or Nonprofit Incubation, go to the Society for Nonprofit Organizations at www.snpo.org. In addition, go to the Foundation Center www.foundationcenter.org and use the key word of Incubator.

31. Grants and Funding • If your organization wishes to apply for grants, keep in mind that funders, whether private foundations, corporations, or government agencies, almost always require 501 (c)(3) status. For more information on these granting organizations, go to www.foundationcenter.org. • In addition to tax exemption, contributions and grants, there are other benefits of 501 (c)(3) status, including special discounts on postage and rent. Some programs, like local Rewards Programs, require that an organization be a 501 (c)(3).

32. Topics Covered • Building an Organization and Defining Your Mission (Review) • Choosing a Business Name • Incorporating your Organization • Articles of Incorporation • Putting Together a Board of Directors • Developing Bylaws • Holding an Organizational Meeting • Registering for an Employer Identification Number • Applying with the IRS for 501(c)(3) Nonprofit Status • Sales Tax Exemption • Contributions and Applying for Grants and Funding

33. Closing Notes If you have any questions or need help, call The NLC Grants Technical Assistance Hotline at 1-866-973-2760! Catch all the latest stuff from the Native Learning Center on our webpage at www.nativelearningcenter.comor on Facebook or Twitter.

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