Starting a 501(c)(3)

Off Topic
1

I’m creating a non-profit and I want to make it a 501c3 also. There is also some state-specific forms that I have to fill out and submit.

I was considering using an attorney to assist me. The attorney I met with is also a tax specialist. The problem is, it’s expensive!

Another option was having an accountant help me for less.

I don’t want to do it myself, since I have no experience in these type of matters. I just want to ensure it does not get “rejected” or I have a mistake come tax-time.

The non-profit would be used for fundraising and providing scholarships for at-risk kids to train at my boxing gym.

Anyone started one recently?

Thanks for any advice or suggestions.

2

[quote]Brett620 wrote:
I’m creating a non-profit and I want to make it a 501c3 also. There is also some state-specific forms that I have to fill out and submit.

I was considering using an attorney to assist me. The attorney I met with is also a tax specialist. The problem is, it’s expensive!

Another option was having an accountant help me for less.

I don’t want to do it myself, since I have no experience in these type of matters. I just want to ensure it does not get “rejected” or I have a mistake come tax-time.

The non-profit would be used for fundraising and providing scholarships for at-risk kids to train at my boxing gym.

Anyone started one recently?

Thanks for any advice or suggestions.[/quote]

Find an account that is sympathetic to your cause, lifter, boxer, boxing fan. Have them donate their time to set it up. Apply for federal and community grants, the donated time can be used as match for a matching funds grant. Fair warning, it will seem daunting at first given the complexity of the non-profit landscape.

Good luck and it sounds like a good cause.

3

To echo the general sentiment above:

It shouldn’t be too hard to find a handful of charities in your area. Typically these charities will use one or two different firms. (Accounting firms tend to specialize in industries, generally speaking.)

Go to that firm, as they will have experience in setting up the non-profit.

Good luck.

4

[quote]Brett620 wrote:
I’m creating a non-profit and I want to make it a 501c3 also. There is also some state-specific forms that I have to fill out and submit.

I was considering using an attorney to assist me. The attorney I met with is also a tax specialist. The problem is, it’s expensive!

Another option was having an accountant help me for less.

I don’t want to do it myself, since I have no experience in these type of matters. I just want to ensure it does not get “rejected” or I have a mistake come tax-time.

The non-profit would be used for fundraising and providing scholarships for at-risk kids to train at my boxing gym.

Anyone started one recently?

Thanks for any advice or suggestions.[/quote]

501(c)(3)'s currently take six months to a year, unless you are politically connected. (See Malik Obama's 'Barack H. Obama Foundation' Raises Questions | HuffPost Impact)

My recommendation is to team up with a charity that targets similar at-risk youths and run under its charter (e.g., Boys and Girls Club). Call the local United Way (if it is a stand alone chapter; don’t bother with the national organization) and see who does this in your area. A good local United Way may even have a pre-existing 501(c)(3) that went dormant for whatever reason for you to take over.

5

Great advice guys. It’s non-political, and I’m going to try to make it an after-school program too. I’m requiring the kids to have certain grades and participate in community service.

I’m going to check with The United Way. Great idea.

I just didn’t know how things are now, considering the current “climate”.

6

[quote]Jewbacca wrote:

[quote]Brett620 wrote:
I’m creating a non-profit and I want to make it a 501c3 also. There is also some state-specific forms that I have to fill out and submit.

I was considering using an attorney to assist me. The attorney I met with is also a tax specialist. The problem is, it’s expensive!

Another option was having an accountant help me for less.

I don’t want to do it myself, since I have no experience in these type of matters. I just want to ensure it does not get “rejected” or I have a mistake come tax-time.

The non-profit would be used for fundraising and providing scholarships for at-risk kids to train at my boxing gym.

Anyone started one recently?

Thanks for any advice or suggestions.[/quote]

501(c)(3)'s currently take six months to a year, unless you are politically connected. (See Malik Obama's 'Barack H. Obama Foundation' Raises Questions | HuffPost Impact)

My recommendation is to team up with a charity that targets similar at-risk youths and run under its charter (e.g., Boys and Girls Club). Call the local United Way (if it is a stand alone chapter; don’t bother with the national organization) and see who does this in your area. A good local United Way may even have a pre-existing 501(c)(3) that went dormant for whatever reason for you to take over. [/quote]

My understanding is that you are a non-profit once you incorporate as such. The delay in IRS approving is a matter for your donors certainty in taking the tax deduction and yours in accepting the money and not paying tax, although in first year I don’t think you are required to pay estimateds. For example, if a person donates before the IRS rules then they can take the deduction but may be in a sticky situation if the IRS later says you don’t qualify.

There are all kinds of walk through things on the IRS website to help you do it yourself but it takes a level of sophistication that is pretty challenging.

Seek advice from a local bar association that might have a clinic or referral to someone doing pro-bono.

Taking over a dormant one might not work as if its dormant its IRS status may have lapsed as well (it goes after 3-4 years without a return I think).

All this is from a non-lawyer who set up a c3 a few years ago with friends for a similar youth type thing. So I may not know exactly what I’m talking about. That’s my take, but you get the advice you pay for. Good luck.

7

^ Yeah, I wanted to get the status soon, since I have a person that is willing to donate a bunch of gym equipment to me. It’s a rich person who is moving out of their huge home, and basically they have their own home gym. It’s the same size as a hotel gym. 3 treadmills, a Stairmaster, about 6-7 weight machines, dumbells, and assorted other equipment. It’s like-new and about $30k worth.

The bad thing is she wants the tax deduction!

8

[quote]Brett620 wrote:
^ Yeah, I wanted to get the status soon, since I have a person that is willing to donate a bunch of gym equipment to me. It’s a rich person who is moving out of their huge home, and basically they have their own home gym. It’s the same size as a hotel gym. 3 treadmills, a Stairmaster, about 6-7 weight machines, dumbells, and assorted other equipment. It’s like-new and about $30k worth.

The bad thing is she wants the tax deduction! [/quote]

Check if they give you some sort of preliminary status when you apply. I remember something vaguely like that to show donors.

9

I started a 501(c)(3) about 3 years ago. She Say filled out the paperwork. It seemed daunting at first, but was really pretty simple. I believe we had our signed letter in like 3-6 months. Got Lois Lerner’s signature and everything.

She Say has no business/accounting/tax background, but was able to answer all the questions. I have an MBA in finance and 21 years of business experience including 10 years of direct work with government grants. She had to ask me for help with a handful of questions, but it was all simple stuff.

If I remember correctly a LOT of the questions on the forms won’t apply to your particular case. Our 501(c)(3) is a soccer club for youth in the Maryland suburbs, so we’re probably similar situations. I’m pretty sure you answer yes or no to a bunch of questions and if it was yes you had to provide more info, but if no you just moved on.

Do you have the paperwork yet? If not, get it and look at it. I think you can download all the info. from irs.gov.

If you can find an accountant or lawyer to do pro bono work for you, my hat is off to you. Maybe things are different in other parts of the World, but in the DC area charitable aid is restricted to the big guys that will give you a gala with congressional “celebs” for your donations.

10

[quote]Jewbacca wrote:

My recommendation is to team up with a charity that targets similar at-risk youths and run under its charter (e.g., Boys and Girls Club). [/quote]

Maybe things are different where you guys live, but in the DC area Boys and Girls Clubs are the worst run places at best and hideouts for thugs stealing tax payer money at worst.

I volunteered for 10 years at my local boys and girls club. I took the soccer program from 64 kids to 400 kids. Registration fees were $75. $75 * 400 is $30,000. Guess how much the soccer program received? A whole lot less than $30,000. When I started volunteering they ‘provided’ cheap ass t-shirts without even numbers on them. Referees were untrained volunteer parents. Each kid did get a $2.00 medal that featured the name of the club. After 10 years I was getting about $8,000 for uniforms and paid licensed referees. It did however take about 3 months to get the refs paid and the uniform company had to wait about 120+ days on average to get paid.

Where did the money go? To the football program and to the huge-ass, dilapidated building the club had “bought” for one dollar when the County had to offload it as it needed millions in repairs. So…all the money my kids paid went to football players and a building that was falling down around the thugs running the club and had ZERO kids doing anything in the damn building anyway. Ai yi yi.

So…before you partner with anyone, I’d do a big investigation of them considering you’d be brining $30,000 worth of donated equipment.

Not trying to be a dick to Jewbacca or anyone who has had a better experience with a boys and girls club. I have just found all of the ones in my area to be more interested in paying their overhead than helping the kids.

11

Thanks for the perspective Sen Say. I’m going to download the forms and take a look at them.

And with the gym equipment, I don’t even know if I’m going to use it. We have no space for it. My boxing gym doesn’t want to have all of it there, since they don’t have the space. I was going to maybe sell it and use the proceeds to finance for first fundraising events (a silent auction with a band, food and drinks, golf scramble, 5k run etc.) and basic equipment for the kids. After that, the regular fundraising activities should provide the funds to sustain ourselves.

12

[quote]sen say wrote:
Not trying to be a dick to Jewbacca or anyone who has had a better experience with a boys and girls club. I have just found all of the ones in my area to be more interested in paying their overhead than helping the kids.
[/quote]

I don’t disagree with you.

The key is a local-charter B&G Club or United Way (they’ll say things like “United Way of [Your Town], Inc.” on their corporate docs.

The national organizations of both groups (and their local “chapters” vs. a stand-alone corporation) are horrid — as is the Red Cross, by the way.

The Red Cross is easily the most useless charity and uses a sad percentage of its funds to support things like ObamaCare outreach.

13

I was trying not to derail, however some so called non-profits are absolutely the most corrupt, cutthroat, inept organizations on the planet.

14

http://www.msysa.org/docs/501C3.pdf

15

[quote]sen say wrote:
http://www.msysa.org/docs/501C3.pdf[/quote]

Thanks Sen Say! I talked to my local United Way and they said I have to have been a 501c3 for a year before I can operate under their charter.

I left a message with a administrator at the Boys and Girls club.

I visited the IRS web site and printed off the 31 pages of the application.

I guess I need to form my corporation first, right? I’m going to try to do that ASAP.

QUESTION: I heard you can conduct fundraising prior to being approved. Is that correct? Is that the provisional status that JB mentioned?

16

[quote]Brett620 wrote:

[quote]sen say wrote:
http://www.msysa.org/docs/501C3.pdf[/quote]

Thanks Sen Say! I talked to my local United Way and they said I have to have been a 501c3 for a year before I can operate under their charter.

I left a message with a administrator at the Boys and Girls club.

I visited the IRS web site and printed off the 31 pages of the application.

I guess I need to form my corporation first, right? I’m going to try to do that ASAP.

QUESTION: I heard you can conduct fundraising prior to being approved. Is that correct? Is that the provisional status that JB mentioned?[/quote]

  1. Not sure about United Way Charter…I’ve found you should tell most Established Organizations to fuck off. Not sure what their Charter would get you…but…you can cross that bridge in a year.

  2. Good luck with the boys and girls club. What I believe is that 50 years ago boys and girls clubs served a good purpose. They provided baseball in the spring, football in the fall and basketball in the winter. Kids played for their ‘local’ boys and girls club;. As we got more specialized there began a demand for year-round baseball, soccer evolved, flag-football opened up and the boys and girls club ‘model’ became outdated. They usually charge X dollars for any sport when obviously they all don’t cost the same. So…some sports subsidize others. Unless you’re the one getting the subsidy why do you want to give away your money? And the ‘local’ aspect is now a joke. If you live in an area where the club is lousy…why shouldn’t you be allowed to go to another area? It’s all about the volunteers CURRENTLY giving their time NOT the boys and girls club moniker. So…like I said…may be different in your area, but around here they’re the equivalent of the churches on The Wire.

  3. Complete 5 pages a day of the 31 page app and you’ll be done in a week. I’m friends with another guy that broke off his football program from our boys and girls club at the same time I split and he paid $10K to have the forms filled out. Take your time and save the money. We can help with tricky questions. Email me at greaterlaurelunitedsoccerclub@gmail.com if you want.

  4. I’m confused…do you OWN a gym with a boxing ring, etc…and does this involve a Corporation? You DO need to have a Corporation BEFORE you can get 501(c)(3) status…I was assuming you had a gym…if you don’t…I would suggest you’re up shit creek…space/fields are the number 1 hurdle you’ll face…if you got nowhere for the kids to box…tie your wagon to someone else or spend the next 6 months finding a space.

  5. I think you can fundraise prior to being approved…call the IRS and ask…maybe it’s different where you live…but…fundraising has not been part of our business model…I admire that you want to help out disadvantaged kids and require they do well in school…but…what we found out was the kids we were giving scholarships to were showing up to the field in Cadilac Escalades…the businesses we reached out to for help had 1,000 hoops to jump through…basically…we did an analysis of our costs and everything is paid for by the kids registration fees. We have received a few thousand from local gummint and Modell’s Team Week…but…fundraising is a full time job…I spend 10-60 hours a week working on our club just planning games and teams…this could be different for boxing…but…after all this I have no time to reach out to businesses or gummint to ask for money…our registration fee is roughlu $100 for 10 weeks of soccer…we’ve never turned anyone away that has asked for financial help…but…$100 is 2 tanks of gas…4 trips to McDonalds…if you really want your kid to play soccer you can find $100.

Good luck brother! I am right now taking a break from putting together a few teams for our fall season, prepping 2 marketing emails and tweeting some pics to the US Men’s National Team while drinking Irish Whiskey…I love every detail of my soccer club and if you want your boxing club to succeed you need to feel the same way. 9.9 out of 10 people in youth sports SUCK. That $30K in equpiment may seem like the world right now, but it’s the day to day work on this that will make or break you, so go slow and stick to what you want.

17

Sen Say,

Sorry I should have been more clear. I train at a boxing gym and I’m also a volunteer coach for the junior program. The gym is new, and it’s a for-profit gym. Gym dues are kind of costly, even for the kids. I want to create a non-profit that gives poorer kids in the neighborhood (it’s in the inner-city) an opportunity to box. It would be separate from the gym, but would raise fund and basically pay the kids’ membership.