Thinking about starting a nonprofit charity but not sure where to start or how to go about it? Have you heard of the term “501 (c) (3)” but are not exactly sure what that term means or what meaning is attached to it? You are probably not alone. This article helps shed light on some of the issues surrounding creating and establishing a nonprofit charity in Florida. We also outline the basic steps to take to get your charity off the ground. If you are looking to establish a non-profit organization in Florida, the basic steps to follow are as follows:
Once you have your proposed charitable mission in mind, you need to incorporate it. To incorporate a non-profit organization, you must prepare and file the articles of incorporation with the Florida Division of Corporations. The articles of incorporation are the document that “creates” your nonprofit organization according to state law. The articles contain, among other provisions, the name of the legal entity, the address of the corporation, and the name and address of the registered agent.
In addition, the articles must contain certain special provisions required by the IRS to form a nonprofit charitable entity. These provisions include a purpose and a dissolution clause, respectively. Without such a clause, your items will not meet IRS requirements. For this reason, it is preferable to have a professional, such as a CPA or an attorney, handle your filing requirements.
Once prepared, the completed articles of incorporation should be submitted to the Florida Division of Corporations along with the state filing fee of $ 70.00. The filing fee must be paid to the “Florida Department of State”. You must send the items to the Division of Corporations, PO Box 6327, Tallahassee, Florida 32314.
After incorporation, you must obtain a Work Identification Number (“EIN”) for your non-profit organization. You can obtain an EIN for your nonprofit in a number of ways. The fastest way is to apply online at the IRS website. However, you may not be comfortable with that. Alternatively, you can complete IRS Form SS-4 and fax it to the IRS. Typically, you will receive your EIN within 4 business days. You can obtain more information by contacting the IRS at 1-800-829-4933.
To establish an IRS-recognized charity, the next important step is to file for 501 (c) (3) tax-exempt status with the IRS. This step involves completing a relatively detailed application known as Form 1023, Application for Acknowledgment of Exemption. The purpose of completing this form is for the IRS to recognize your organization as a tax-exempt charity. Additionally, once you have obtained such exempt status, donors who contribute to your charity may make tax deductible donations, to the extent permitted by law. To obtain such tax-exempt status, you must complete Form 1023 and submit the completed application to the IRS along with the applicable IRS application fee. To obtain a copy of the application, you can contact the IRS at 1-877-829-5500.
After submitting the form to the IRS, within approximately 3-5 months thereafter, the IRS will respond by sending you a Letter of Determination formally recognizing your entity as 501 (c) (3). If your application is incomplete or a problem arises, the IRS will notify you, which may result in a delay in the successful processing of your application.
Once you have received the IRS Determination Letter, you must notify the Florida Department of Revenue of your charity’s tax-exempt status by sending a copy of your IRS Determination Letter to that Department. You can contact the Florida Department of Revenue at 1-800-352-3671.
Another issue to consider is requesting donations. If you plan to solicit donations from the general public to support the mission of your charity, you must register your charity with the state of Florida. The registration process is administered through the Florida Department of Agriculture and Consumer Services. To register to apply for donations in Florida, you must obtain a copy of the registration application from the Florida Department of Agriculture and Consumer Services, complete it, and then send the completed application to that department along with the applicable registration fee. You can obtain the registration application by contacting the Department of Agriculture and Consumer Services at 1-800-435-7352.
As a nonprofit charity, you will also be required to file an annual return with the IRS. This annual filing requirement is important because if you do not file for 3 consecutive years, your entity could automatically lose its tax-exempt status. Such an event could be devastating for your organization. For this reason, you should hire a CPA from the beginning so that you can ensure your organization’s ongoing compliance with the requirements of the federal tax code.
We hope this helps.