How do you start a nonprofit?
What is the difference between a "nonprofit" and an "NGO"?
The term "non-governmental organization" was first coined in the Charter of the United Nations in 1945. “NGO” is most often used to refer to a charitable nonprofit that is operating outside the US. An NGO can be any kind of organization, provided that it is independent from government influence and is not organized for personal profit. In contrast, the term “nonprofit” is the term used in the US to refer to organizations that are structured as nonprofit corporations, whether or not they are also designated as tax-exempt by the IRS. We use the term NGO interchangable with nonprofit as we operate internationally.
How much should a nonprofit spend on overhead?
Whatever is necessary to advance the organization's mission. There is no set percentage that would indicate that one nonprofit is run any more effectively than another. Overhead costs are investments in necessary infrastructure, including rent, paying staff, replacing old computers, repairing a leaky roof, etc. A better gauge of an efficient nonprofit is its impact in the community.
Does our nonprofit have to file anything annually? What is a Form 990?
The IRS Form 990 is the tax form that all tax-exempt nonprofits must file with IRS annually. There are multiple types of 990 forms, so make sure your nonprofit files the correct form. We can help you form your annual forms with the IRS! Visit our contact page to get started.
Can a nonprofit fundraise before it has tax-exempt status?
A nonprofit that is not yet recognized as tax-exempt by the IRS may fundraise, but it may not tell donors that their contributions are tax-deductible – because they aren’t until the nonprofit has received a determination of tax-exemption from the IRS. So that contributions can be deductible to donors, some nonprofits that are not-yet tax exempt (and some that are) seek a fiscal sponsor. Fiscal sponsorship is ideal for projects or organizations that have begun the filing process to become a 501(c)(3) charitable nonprofit organization but have yet to receive official exempt status from the IRS. Establishing a fiscal sponsorship allows those not-yet-exempt organizations to accept tax deductible donations and begin to raise funds through their fiscal sponsor.