A 501c3 nonprofit corporation is a type of organization that is exempt from taxes and able to accept tax-deductible donations. The basic process is this: your nonprofit must be formally organized at the state level, and then you apply to receive tax-exempt status from the IRS. You can also look for: Virtual Bookkeeping for your business or non profit.
But not all nonprofit corporations are eligible for 501c3 status. In order to receive the exemption from taxes provided to 501c3s, your organization must be organized exclusively for one of the following purposes:
- Testing for Public Safety
- Fostering Amateur Sport Competition
- Prevention of Cruelty to Animals or Children
- But before you formally organize as a corporation and apply for your tax exemptions, there are two important documents any nonprofit corporation intending to apply for 501c3 status should prepare: your Mission Statement, and your Nonprofit Bylaws.
- Nonprofit Mission Statement
Adopting a nonprofit mission statement is one of the most important things your organization can do. With a mission statement, all the goals and aspirations of your nonprofit — as well as explicit way those goals and aspirations are to be addressed — are gathered together in one place.
There are three main purposes for your mission statement:
The mission statement ensures that your members, directors, and other key players are all on the same page, acting toward a common goal. (Those key players should be directly involved in developing the mission statement — schedule a brainstorming meeting so everyone has a chance to help craft something accurate, comprehensive, and engaging.)
Possible donors and other organizations you might work with will be able to read your mission statement and have a clear understanding of what your nonprofit organization is all about. (Do not fill your mission state with abstractions. It should include specific activities.)
The IRS will use it to consider your application and determine whether you are truly an organization that falls under section 501c3 of the Internal Revenue Code, the section covering only those specific purposes noted in the beginning of the article.