I Have a great ideal for an non- profit but I would like to make money for myself as well.?
Could the board keep you out of your own ieal or baby so to speak?
Answers:
When you start your corporation, as incorporator you would assign the initial director(s). The directors will vote on who the officers of the corporation will be and determine their salaries. In most states, one person can be the incorporator, sole director and president of the corporation.
Even non-profit corps pay the the CEO.
The thing about it is though, why do you even want to start a non-profit corp, to make money? Will you be misleading people?
How do you go about?
You are starting the company, you write the articles of incorporation, according to your state laws for nonprofits. You appoint the board of directors, if you are the board of directors, you hold the board of directors meeting and decided who the president and other officers will be. Maybe you (the board of directors) will decide that you will be the president and give the president a fair salary. You document it all in the articles of incorporation, the bylaws, and the minutes of the board of directors meetings, and the shareholders meetings if you have shareholders.
Unfortunately the non-profit world is a complex one to navigate. I spend alot of time helping non-profits fix the messes they create. A non-profit can come in several forms but the most common one is a corporation.
You establish Articles of Incorporation with your state and then the incorporator passes the initial resolutions to establish the board. The board hires managers and sets compensation. There many restrictions and you don't have ownership in stock or anything like that. There are also some persons who are disqualified and the compensation needs to be set pursuant to a policy.
There are also certain things for which the non-profit must be established. After establishment you must file IRS Form 1023 to seek tax exemption. The form is long and can take more than 100 hours to prepare. You will also need to submit information on all board members, all financial data, a conflict policy, and ByLaws for how you will be governed.
In almost all states you then need a license to solicit donations. In order to obtain the license you need all of the items above plus you will need either reviewed or audited financial statements each year. The accounting in a non-profit is very important.
If you want general information I would look at the instructions for Form 1023 on the IRS website in their forms and publications section. They also have some other applicable publications. Many state also offer training sessions on non-profits. These are often offered by the attorney general and are of very limited cost.
Whatever you do, follow these two things: Get a competent attorney who has experience establishing and advising non-profits and Second, get a good CPA firm with experience advising non-profits on accounting issues. These are both absolute musts. Failure to have good legal and accounting teams can be disasterous. If done right the organization is tax exempt. If done wrong it may be fraud and could potentially lead to a 200% excise tax.
Non-profits may be complicated but if you're doing good for the world and believe in the mission then it is worthwhile. Non-profits do great work and improve many lives, just don't jump too fast. You might also see if a local law school offers a non-profit development clinic, many do and are a great free or nearly free resource.
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