PANO does not assist
organizations with the paperwork to file with the IRS and
state. We recommend consulting an attorney or
accountant that specializes in nonprofits. There are
several listed on our consultant page.
PANO
will only provide technical assistance to members who
are starting a new nonprofit organization. You can join even
if your paperwork is not finalized.
Join as a nonprofit at the
budget range reflective of your organization.
We recommend the "Pennsylvania
Nonprofit Handbook."
Please read this article about some of the
fundraising challenges you will likely experience if you
are starting a nonprofit.
We have also provided the following article to assist you
in your efforts:
PANO's Tips on How to Become a Nonprofit
Organization in Pennsylvania
1. Determine the purpose of the
organization.
Every organization should develop a mission statement that
describes their reason for existing. This can be developed
by meeting with potential clients, constituents, board members
and other interested parties.
2. Determine the structure
of the organization.
This stage should include determining the type of organization
that you will form (e.g., a charitable corporation under § 501
(c)(3) or another kind of non-profit: member or not, corporation
or unincorporated, association, or trust). Do you want to
be a membership organization or governed by a board of directors
who elect their own successors? What interests or constituencies
should be on the Board?
3. Choose your board of directors.
Your board will help you transform your ideas into reality
by helping establish goals and fundraising strategies.
Pennsylvania law requires every non-profit corporation
to have a President, Treasurer, and Secretary (i.e. officers
who perform comparable duties) and a single person may
hold all three offices.
4. Write bylaws.
Your bylaws will guide your organization's day to day operations.
These should be drafted carefully and may require the assistance
of an attorney experienced in nonprofit law to reflect
the proper power relationships among those with an interest
in the group.
5. File Articles of Incorporation with
the Department of State.
For organizations that plan to be incorporated, this is a
key step. In Pennsylvania, you need to file your Articles
of Incorporation with the Department of State's office. For
more information or copies of the basic forms contact:
The
Department of State
Corporation Bureau
308 North Office Building
Harrisburg, PA 17120-0029
( 717)-787-1057
If you expect to seek exemption as a charitable
organization under Section 501 (c)(3), be sure to include
the language required by the Internal Revenue Service. It
is not on the state's printed forms.
6. Develop strategic and fundraising
plans.
A strategic plan will help you outline the steps needed to
fulfill your organization's goals, determine your staff needs,
and establish operational priorities for the upcoming year
and beyond. The strategic plan should determine your budget
priorities, identify potential donors, establish bookkeeping
practices, and delineate fundraising activities (e.g., mailings,
dinner-dance, silent auction, etc.) There are six core elements
of a successful nonprofit:
(1) fundraising, (2) marketing, (3) internal operations,
(4) programs, (5) volunteer development, and (6) community
involvement.
7. Establish a system for record
keeping and accounting.
A protocol should be established for keeping all your organization's
official records (such as board meeting minutes and financial
reports) and records should be preserved for the life of
the organization. Establishing written, board-approved, financial
and internal management policies and procedures is essential
for the organization's success.
8. Obtain a Taxpayer Identification
Number from the IRS. You'll need this number to open
a bank account, file informational returns with the IRS
and withhold your employees' income tax. It helps when
requesting a Pennsylvania sales tax exemption. You can
obtain a Taxpayer Identification Number (also called an
Employer Identification Number.EIN) by filling out an SS-4
form. Contact the IRS at 1-800-829-FORM or
http://www.irs.ustreas.gov/charities/index.html for
an SS-4 form or more information.
9. Request recognition of tax-exempt
status from the IRS. Without a "determination
letter" from the IRS, donors who want an income tax
deduction may not make gifts to your charity. Nonprofit
corporations that are charities and meet the definitions
in IRC §501 (c)(3) may request recognition of their tax-exempt
status. To receive §501 (c)(3) tax-exempt status from the
IRS, you must fill out an IRS 1023 form and attach your
proposed budget, Articles of Incorporation (certified),
and bylaws (a true copy). Resumes of your board members
are helpful as well. This application should be filed within
the first 15 months of your organization's existence. Contact
the IRS at 1-800-829-FORM or
http://www.irs.ustreas.gov/pub/irs-pdf/f1023.pdf to
receive a copy of this form. There are other nonprofits
that are not charities, such as Chambers of Commerce, etc.
Different IRS forms are required for these.
10. Filing for Pennsylvania tax-exempt
status. To request exemption from paying sales tax
in Pennsylvania contact the:
Pennsylvania Department of Revenue, Tax
Forms Service Unit
711 Gibson Blvd.
Harrisburg, PA 17104-3200
and request Form REV-72 or download it here: http://www.revenue.state.pa.us/revenue/lib/revenue/rev-72.pdf
If you plan to sell items to others who
are required to pay sales tax, you should open a state sales
tax collection account. You can download other
forms here.
Your organization's Federal tax exemption
status has no bearing on PA tax-exempt status policy.
11. Register with the Pennsylvania
Bureau of Charitable Organizations.
If your organization will be requesting donations within
Pennsylvania you must register with the Bureau of Charitable
Organizations prior to beginning any fundraising activities.
There are exemptions and exclusion for certain organizations,
and you should contact the bureau for the requirements. To
receive a packet of information that includes the long and
short forms, requirements for exemption, excerpts of the
law and instructions for filling out the forms contact:
Department of State
Bureau of Charitable Organizations
207 North Office Building
Harrisburg, PA 17120
http://www.dos.state.pa.us/char/site/default.asp
800-732-0999
12. Obtain a nonprofit bulk mail permit
from the U.S. Post Office.
If your organization will be doing any large mailings, you
may want to obtain an imprint authorization for bulk mailing. The
permit provides a discount on the cost of mailing, if you
are sending at least 200 pieces, and the mailing is sorted
and processed within the regulations of the Postal Service. There
is a one-time imprint fee and the permits must be renewed
annually. Certain nonprofit organizations may
qualify for reduced rates. For more information on bulk mailing
call, (901) 576-2062 or visit the
web
site.
13. Establish personnel policies.
Before hiring employees, the personnel committee from the
board of directors should develop written personnel policies. They
can be expanded as the organization develops but should cover
basic operational procedures. For areas to be considered
in the policies contact the PANO office.
14. Register for unemployment compensation.
All nonprofit organizations must participate in an unemployment
compensation program. To receive an employer packet describing
your compensation responsibilities contact:
Office of Employment Security
Bureau of Employer Tax Operations
Labor and Industry Building
7th and Forester Streets
P.O. Box 60849
Harrisburg, Pennsylvania 17106-0849
Another program is also available to your
organization. The law allows the option of reimbursing the
state for only the actual benefits paid to your former employees. For
more information of this program contact the PANO office.
15. Be sure to withhold employment
taxes for the IRS. Employers are required to withhold
their employees' wage income and FICA taxes and submit
these to the IRS regularly. Failure to do so can result
in significant fines and potential personal liability for
the responsible officers. Contact the IRS at 1-800-829-3676
or www.irs.ustreas.gov to
receive appropriate forms. The state and some local
governments also require withholding.
16.Obtain liability insurance for your
organization. Like the business
community nonprofits are exposed to legal risks. Contact
PANO, your insurance representative or your attorney for
more information on general liability insurance, directors'
and officers' liability insurance, and general professional
liability coverage.
As a PANO member, PANO can assist
you by providing more information, contacts at state agencies,
lists of attorneys, accountants and other professionals who
specialize in the nonprofit sector.
Not from Pennsylvania? Find an
association
from your state.
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