Once you’ve decided your mission, developed an operations strategy and started building a team, it’s time to prepare and file your incorporation documents and 501(c)(3) status applications. If you’ve done your homework properly in documenting your mission, strategy and plans, the application process should be straightforward. That doesn’t mean, however, that it will be easy. Without a prior knowledge of IRS rules and regulations, your plan could still run the risk of being declined by the IRS for 501(c)(3) status. The most successful nonprofits utilize experts in nonprofit compliance for every step of their planning, to ensure from the start that their nonprofit plan is compliant and ready for approval.
As a mission-driven world changer, it is unlikely that your core expertise is nonprofit compliance. Using a professional company that specializes in establishing 501(c)(3) nonprofits is the most prudent choice in these scenarios, but there are no one-size-fits-all solutions for choosing a business vendor. Online DIY services that promise easy, quick results can often be the cheapest way to operationalize, but adage “you get what you pay for” is true – don’t expect anything in terms of support. You’re on your own. Mistakes that result in a rejected application means lost time you must spend fixing and resubmitting your application, ironically increasing the cost of your process.
Additionally, online legal/corporate document preparation services still focus on for-profit organizations much more than nonprofits. The process of gaining tax-exempt status is more rigorous than a corporation filing, given that the tax incentives for nonprofits are given in exchange for those organizations providing a public benefit. Who defines a public benefit versus a private one? How does your specific plan fit into state and federal IRS regulations regarding operating as a nonprofit in an area such as homeless services or working with children? These are areas best understood by talking to experts before you file your paperwork, not after your application has been declined. There is no substitute for specialized expertise.
After you’ve obtained your 501(c)(3) status and have launched your startup nonprofit, the need for qualified experts in nonprofit compliance does not lessen. If your nonprofit serves constituents or fundraises in multiple states, you’re liable for nonprofit filings in each state you do conduct business in. Each state has its own unique rules and regulations regarding nonprofit operations, and your organization is responsible for compliance and separate filings in each of them.
Maintaining state compliance for your nonprofit in addition to federal compliance can be an onerous task, especially as your operations grow. With technology advancing tools of communication and outreach to global levels of efficiency, it’s easy to lose sight of local rules based on older methods of doing business. Working with a professional partner for your annual IRS Form 990 filings can help you focus on your key areas of expertise, leaving the compliance filings to experts.
Foundation Group’s Expertise
Foundation Group was started by tax and accounting professionals who specialize in nonprofit issues. While other companies focused on the larger for-profit company market, Foundation Group made its mission that of serving the tax and compliance needs of the charitable community. Today, Foundation Group has over 20 years of experience working exclusively with nonprofits on 501(c)(3) application processes, annual Form 990 filings, charitable solicitations registrations, and other tax related issues at the state and federal levels.
There is virtually no issue in the area of nonprofit status applications and compliance that Foundation Group has not addressed at some point in their 21-year history. To take advantage of Foundation Group’s broad ranging expertise in nonprofit formation, contact our office today. Let us be a partner in your success from the start!