creating a non profit organization in Chicago?
How do I go about creating a non profit Organization in Chicago for empowering and educating others?
At the moment, I don't need a space but I do create fun projects, events, activities and challenges. All Funds are from my own pocket so it would be nice to be able to accept donations from other people or companies to help my cause. Any useful information will be greatly appreciated. Thank you
- PatLv 77 years agoFavorite Answer
I answer this question a dozen times every day.
I know you have good intentions.
But that's not enough.
A "charity" is a type of nonprofit organization.
A nonprofit organization is a corporation, just like Sears, or General Motors, or McDonald's.
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, NFL, MLB, NHL, NBA, Republican Party, Democratic Party, US Chamber of Commerce, Planned Parenthood, PTA, Public Broadcasting System, are all nonprofit.
They all need money to operate.
The millions of people who work for them do not 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.
Managing a nonprofit is a whole specialty.
You have to learn to balance the organization's financial needs with its duty to provide services.
You need to know about fundraising, recruiting and training staff and volunteers, program development and service delivery, marketing, budgeting, board relations, public relations, media reliations, government relations, financial management, legal requirements, and lots more.
You do NOT just create a website and sit back while the money flows in.
it does not work that way.
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.
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.
Lots of detailed info here.
There were 973,961 charities in the US in 2010.
They are all competing for very scarce dollars.
You do not need to reinvent the wheel.
Find one doing work you're interested in and volunteer.
I have been a volunteer, staff, manager, board member, board president, consultant, and lobbyist for nonprofits for 30 years.