How to Start a Nonprofit: Our Adventures to Start PJBH
- Child Care Concierges
- Dec 6, 2022
- 5 min read
This blog is a play by play, step by step record of what we did to start our nonprofit. Updates are available weekly sometimes daily.
Be sure to check back daily!
First Step: Determine The Why!
A vision starts out as an idea that we cultivate in our mind and believe in so much so that we start to cultivate it in our hearts. Most nonprofit organizations start from a yearning or urging to help others rather we have a lot for ourselves or not. The idea of a nonprofit should start from the heart to want to help and support others. Mrs. Jitta, our vice president, made a great point to teach her children "It is never lonely at the top, because once you reach the top you reach down and pull the next person up." Project Jitta Bug Helps Inc is built off the same premises of wanting to help grow the very community that raised the leaders of the organization. After helping several nonprofits get set up and interviewing the owner of the nonprofit it became clear to us as a company that not everyone should run a nonprofit. This motivated us to think deeper about how we are supporting and giving back to our community. Instead of complaining, we want to be part of the solution. So, what started as a simple food drive turned into a monthly project of giving back to the different parts of our community that could use the support and help.
Second Step: Name It and Board It
Once you understand the why it is not to create a name for the organization. The name is the first impression for most people and in this world today, everyone loves a story. Your name can create the first chapter of your organization's story and potential impact on the community. You want a clear and consistent name that matches the why and overall goal of the organization.
When it comes to filing for incorporation with the state your organization is in, the name of the nonprofit corporation must contain a word that clearly indicates that it is a corporation. This word may be CORPORATION, CORP., INCORPORATED, or INC. Sections 617.0401(1)(a) and 617.1506(1), Florida Statutes, prohibits the use of the word COMPANY or CO. in the name of a non-profit corporation.
Once you have a name created, the next thing is to form your board. In the state of Florida, you must have at least three directors on the filling with complete addresses. Your organization must have a President, Vice President, Treasurer, Secretary, and then you can have several other board members for voting. When forming your board, find constantly individuals that share the vision and are willing and committed to their role to help the organization find success.
Third Step: EIN Number and the IRS
Next, we moved on to our scary big brother, the IRS and obtaining our federal employer identification number (EIN) which is required if we want to open a bank account for our nonprofit which is definitely something we want to do. We also want to earn our 501c3 Status, but we must first obtain our EIN. This is why we are blogging about the process so we can share the steps and information to better help others. Most organization use the EIN for their employees and taxes but even if our nonprofit does not have employees, we are still required to obtain this and have it on hand for our bank accounts. It is also important to note that the IRS will send a letter and it vital that this letter is put on file, and we suggest making a digital copy and saving it to your hard drive, flash drive, and google docs to be sure you have that letter. You will need that letter from the IRS for several different things.
once you are at the link you will want to choose "View Additional Types, Including Tax-Exempt and Governmental Organizations" and then click continue.
You will then pick which category best fits your organization. For us we chose "Community or Volunteer Group" You will then input the person's name that is responsible for the EIN and their information. The next few screens are asking key information about the organization, and you will select the principal business activity. Once you finish you will be able to review but if anything is incorrect you will need to do a new application.
Fourth Step: File for Tax Exemption
Once you have your organization's EIN you will be able to move forward and file for 501c3 status. This is a special status that allows your organization to operate under a certain set of clear and strict outline of rules and do so tax exempt. You will need to go to this link to find more about Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code: https://www.pay.gov/public/home There is a fee associated with this step and for us it was $275.00. The application is very detailed, and you will need your mission statement and EIN ready to proceed with the application. You will also have to list all director's names and addresses. For answers to questions about charities and other non-profit organizations, call IRS Tax Exempt and Government Entities Customer Account Services at 877-829-5500 (toll-free number). If you prefer to write, use the address below. For answers to employment tax questions, call the Business and Specialty Tax Line at 800-829-4933 (toll-free). To obtain a determination letter applying to a specific set of facts, or to send copies of amended documents write or fax to:
Internal Revenue Service Exempt Organizations Determinations Room 6403 P.O. Box 2508 Cincinnati, OH 45201 Fax: 855-204-6184
OKKKKKKK I found a great link for a course that will explain the process and how to file: Applying for Section 501c3 Status | Stay Exempt (irs.gov)
Fifth Step: DUNS Me Please
You need to have a DUNS number as part of some of the other parts. This number is used to track the organization's credit worthiness. Part of the application you will need a SIC code. SIC for "non-profit" 8399 - Social Services, Not Elsewhere Classified Establishments primarily engaged in providing social services, not elsewhere classified, including establishments primarily engaged in community improvement and social change.
Sixth Step: SAM Registration ALERT!!
A SAM registration is required for any entity to bid on and get paid for federal contracts or to receive federal funds. These include for-profit businesses, nonprofits, government contractors, government subcontractors, state governments, and local municipalities. The SAM registration is valid for one year from the date the registration is complete and must be renewed before 60 days of expiration to avoid potential penalties. Required SAM Information - Updated 09/2020 (uscontractorregistration.com)
CAGE Code Registration
For those new to government contracting, you might be thinking, “what is a CAGE code and what about SAM?” Once you complete your System for Award Management (SAM) registration, you will be given a Corporate and Government Entity (CAGE) Code, and this code is your link to the contracting world.
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