An enormous part of establishing a 501c3 tax exempt non-profit organization is dealing with who will run it. No one does it alone, and in most states a board of directors is needed to run an organization smoothly. Forming a board of directors can seem simple – just pick a couple of buddies and relatives and there you go!
For the good of the organization’s future and your chances of qualifying for 501c3 tax exempt status, this isn’t a great idea. It’s important to understand how to develop a board of directors that cares about your objectives.
Look at Your Mission All good businesses, whether or not they’re for or not for profit, have mission statements in which they spell out what the organization exists for and how they plan to accomplish it. Shorter than a business strategy, a mission statement for a non-profit should be concise and to-the-point, and forming a board of directors ought to circle around what the mission statement says. Only by going back to your mission can board members who care about that mission are chosen, which is in the best interest of the organization and its future.
Study and Recruit One thing numerous non-profits need to consider when choosing a board of directors is that the research and recruitment needed to choose suitable candidates can be extensive. Search for well-known and well-publicized local members of the community which have the time and the passion to pursue a non-profit with your mission statement. It is essential to find people who can get things carried out but are also passionate about your purpose. These individuals might not necessarily be people you already know or even like personally, but they’ll be best for the organization.
Do the Paperwork As soon as the board members have been decided and are on board using the non-profit project, it is essential to get it in writing. An attorney should assist you to work out contracts or agreements with every board member and then write up bylaws using the entire board. Filing for 501c3 tax exempt status for your non-profit demands proof of every board member’s representation as well as proof of their salary agreement to make sure not too much of your profit is going to salaries. One of the factors it is important to select people that are not close to you is that the IRS investigates heavily signs for conflicts of interest or likelihood of fraud when granting 501c3 status.
Nonprofit Legal Center offers tips and resources for you to learn more about how to start a 501c3 and 501c3 nonprofit institutions.
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