I was just wondering if I have to fill out with the IRS even even if the erudition is benefiting students in Haiti.
21
Jul
I want to start a scholarship for students in Haiti. Do i have to register as a non profit organization in USA?
Filed under Scholarship | 2 Comments
In order to solicit money from the public in the US, you must be a legally established nonprofit corporation WITH a solcitation license from your state.
You also have to establish tax-exempt status with the IRS.
If you don’t, then YOU have to pay income taxes on all of the money that you collect.
And you can’t just start up a nonprofit organization.
The legal documents must be filed by an adult.
You have no concept of how to build or manage a nonprofit.
I know you mean well, but this is simply too much for you.
There’s much more to it than you reckon.
You need education in the fields of business and nonprofit management
You also need life experience to teach you to deal with all of the types of people you’ll encounter.
This is not just about “helping poor people”.
You don’t just collect money and mail a check.
There are thousands of organizations already doing the work that you want to do.
And they’re already competing for VERY scarce dollars.
Find a excellent one and volunteer.
Take relevant classes in high school and college.
Eventually, you can get a paid job with a nonprofit.
You could get a degree in nonprofit management.
A nonprofit is a corporation, just like General Motors, or Sears, or McDonald’s.
You file the incorporation documents with your home state the same way.
There must be an official address and place of business, by laws, a board of directors, board meetings, and minutes of those meetings.
They are required to file formal reports on their financial activities with the state AND the feds.
Now here is where the differences start.
The difference is that a nonprofit has no owner and no stock.
When the corporation brings in more money than it spends, the excess is called a “fund balance”, instead of a “profit”.
That fund balance can be re-invested in the corporation or held in savings for prospect projects or for lean times.
The board of directors makes those decisions.
Once the org incorporates, it must apply to the IRS for a tax exempt status.
Those policy are under section 501(c) of the IRS code.
Most charities are under (c)(3).
Labor unions are under c5.
There are about two dozen different categories.
That means that the ORGANIZATION does not pay taxes on its income.
The EMPLOYEES of the organization pay their personal taxes under the same policy as everyone else.
Individuals who donate money to c3 orgs can deduct it from their income taxes, if they itemize.
Donations to other categories – c4, c5, etc. are not deductible.
There are thousands of state and federal policy governing activities, finances, and reporting.
For example, c3 orgs CAN NOT endorse political candidates and there are strict limits on the lobbying that they can do.
That’s why labor unions can endorse candidates and churches can’t.
State laws on soliciting donations from the public vary, but all states have them.
C3 and C4 orgs can be eligible for government grants for their work.
They can also solicit money from charitable foundations.
But then the foundations will come to their offices and tell them they’re doing everything incorrect and refuse to give them any money unless they exchange everything they do.
And even then they might not give the money.
I despise foundations.
Look at http://www.irs.gov/charities/index.html
There is more info at http://www.foundationcenter.org
Source(s):
27 years as volunteer, staff, manager, board member, board president, and consultant to nonprofit corporations.
There are a number of ways you can do this, and no, you don’t have to register with the IRS.
For example, you can make arrangements with a church to collect money and send it overseas. Or you could also work with an organization that is already fundraising for Haiti: try http://www.stillerstrong.org or http://www.witnessforpeace.org. By working with others, you’ll find that you can do a lot more, and you don’t need a lot of IRS paperwork to do it; other people have already filled it out and qualify.
I hope that helps.