How To Start A Charity: The Legal Requirements

Founding a charitable organization may sound like a fairly difficult thing to do, but, if you have all the legal knowledge about what this means, you will discover that this task is not as daunting as you think. If you want to start a charity, you will need to do your homework and see what all the authorities have to say in the matter, before starting a charity. Here are the steps that you will need to follow.

Any charitable organization has a purpose. If yours is going to be a non profit organization, you will find the legal requirements in Section 501(c)(3) of the Internal Revenue Code. You will then have to choose between community benefit, religious, scientific, or educational purposes for your charity.

Non profit organizations are not the only possibility for starting a charity. There are charitable trusts that act as charitable organization, only that they deal with allocation of money, instead of services.

Your organization will need a formal mission statement. This is not to be taken lightly, as this is how you tell the world what your charitable organization is intended for. The mission statements has to have about one to five sentences, clear and concise, and then transmitted to everybody involved, like volunteers, community representatives, and those giving money.

Your charity will also need Articles of Incorporation, which serve as the foundation of your organization. For that you will need to search the Internet for samples, so you know how to write yours. They are meant to show the purpose, the name, the duration of activity, the types and other aspects related to your charity. Search for forms online that can be filled out, and then make sure that you have two signatures on them.

The bylaws of your organization are next in line. You will find plenty of template bylaws on the Internet. They will show how decisions are made in your organization, and all the aspects of the decision making process within your organization.

The corporation division of the Secretary of State is where you need to go to file your application for starting a charity.

You will then get a Federal Employer Identification Number (EIN), which will serve IRS to count you on for taxes. This number will appear on all the forms that you will complete from now on, and it is very important.

When filing for IRS as a charitable organization, you will need to complete the application packet. You will inform them there how the money will be spend and for whom.

Any such an organization has a board of directors and a registered agent; the directors will be entitled with the decision making, and the registered agent will take care of all the official communications from the state.