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How to begin a nonprofit organization?

When I was in the 8th grade I put together a small group of friends and we began a little group in school to help make the school a greener place. That was a success. But now, I want to make things more serious. Im only 14 but by the time Im 18 I would like to own a boutique for unprivileged female teens with low income families to shop at. There is this girl, Allyson Ahlstrom, who did an organization such as this one but she targets female teens in foster care. She owns her own boutique and has many donors who give her money. My goal is by the time Im 18, own a boutique and have all my volunteer friends with me working there. We will be giving every qualifying teen free clothing of her choice. I emailed dozens of companies and stuff but in order for me to fill out a grant for donation I need to be a 501(c)(3) nonprofit organization. WHATS THAT AND HOW CAN I BECOME ONE. Below I have a few questions

1) Any famous companies who donate money to nonprofit organizations?

2) Is it difficult to become a 501(c)(3) organization?

3) Can you list me the steps of becoming a certified organization

4) Easiest way to find and buy a boutique...with donation money.

1 Answer

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  • Pat
    Lv 7
    7 years ago
    Favorite Answer

    For some reason, many people think that nonprofits don't have employees or pay for the things that they use.

    That is absolutely not true.

    PROFIT and MONEY are two entirely different things.

    ALL HUMAN BEINGS NEED MONEY.

    A nonprofit organization is a corporation, just like Sears, or General Motors, or McDonald's.

    They all bring in money.

    Profit making companies get it by selling goods or services.

    Noprofits get it by collecting donations from the public, foundations, the government, etc. and by charging fees for their services.

    A nonprofit corporation is a legal entity.

    Creating one is a very complex and expensive legal process.

    Only an adult can do this.

    No, teenagers can not do it.

    You must file Articles of Incorporation in your home state, verify that the name you choose is available, apply to the IRS for tax exempt status, obtain an EIN, state solicitation license, and sales tax exemption certificate, create a board of directors, elect board officers, establish a place of business, adopt by laws, hold regular board meetings, keep publicly-available minutes of those meetings, and file umpteen financial reports with local, state, and federal government agencies.

    That will cost between $1,000 and $2,000, not counting lawyers' fees.

    THEN you can begin to collect money for your activities.

    If you don't do that, you do not have a nonprofit.

    You have a hobby.

    And you can go to jail for soliciting without a license.

    We can not allow just anyone to collect money from the public and claim they will "give it to poor people".

    All organizations - profit and nonprofit - have expenses.

    Rent - utilities - office furnishings, supplies, and equipment - wages, salaries, and employee benefits - transportation - insurance - lawyer and accounting fees - and lots more.

    Believe me, they get nothing for free.

    And yes, wages.

    Ten percent of the American public works for nonprofits - paychecks, vacations, sick days, health insurance, pensions, the whole nine yards.

    The Red Cross, Salvation Army, United Way, most universities and hospitals, churches, homeless shelters, athletic organizations, boy and girl scouts, labor unions, NCAA, Republican Party, Democratic Party, US Chamber of Commerce, Planned Parenthood, Public Broadcasting System, are all nonprofit.

    Do you think they operate without money?

    Do you think the millions of people who work for them do it all for free?

    There are no laws about it, but a nonprofit that spends no more than about 20% of its income on administrative expenses - like those listed above - is considered to be well -run.

    The rest of the money goes to program expenses.

    When the company brings in more money than it spends, the excess is called a profit.

    The company can distribute that profit to its stockholders.

    When the nonprofit organization brings in more money than it spends, the excess is called a fund balance.

    There are no stockholders.

    The money stays with the organization to continue its work.

    They can keep some in savings for future projects, or for emergencies, or whatever, or they can put it all back into the organization immediately.

    There are thousands of rules governing both for-profits and nonprofits.

    For profits pay taxes.

    Nonprofits do not, but they do file extensive income and expense reports with the IRS and other government agencies.

    Charities are only one of about 32 different categories of nonprofits.

    The others are political, labor union, trade associations, etc.

    These are the legal steps.

    There are many more steps to creating a well-organized, effective nonprofit.

    And there are many info sources.

    Read these, in this order.

    http://www.irs.gov/Charities-&-Non-Profits/Charita...

    http://www.irs.gov/Charities-&-Non-Profits/Charita...

    http://www.irs.gov/Charities-&-Non-Profits/Charita...

    http://www.501commons.org/resources/tools-and-best...

    http://www.charitynavigator.org/

    Find an organization that's doing the work that you want to do and volunteer.

    Learn.

    http://www.serve.gov/

    I have been a volunteer, staff, manager, board member, board president, and consultant to nonprofit corporations for 30 years.

    I know what I'm talking about.

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