Seeking 501(c)(3) Recognition

Report
Seeking 501(c)(3) Recognition
Lessons Learned
AABE Seattle-Portland Chapter
June 6, 2003
Background
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Sought for fundraising and tax purposes
Submitted application in March 2001
Received 501(c)(3) recognition from
IRS in May 2003
June 6, 2003
AABE Seattle-Portland Chapter
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Background
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Expected a long process, but not two
full years.
Completed application ourselves
Spent most of our time responding to
IRS requests for information
Benefits far outweigh the headache of
the process
June 6, 2003
AABE Seattle-Portland Chapter
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Background
The benefits of 501(c)(3) recognition:
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Tax deductible donations
Tax exempt status
Funding from corporations and
governmental entities who donate only to
501(c)(3) organizations.
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AABE Seattle-Portland Chapter
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Background
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If you’re well established and have
money to hire someone to complete the
application, DO IT!
If you’re like us, little money and/or
new chapter, here’s what you need to
do . . . .
June 6, 2003
AABE Seattle-Portland Chapter
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Application Prep-work
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Before you begin, have ready:
Descriptions of your chapter activities
Budgets for the current tax year and
the three subsequent tax years
Scholarship award guidelines
List of all funding sources
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Application Prep-work
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The national organization’s 501(c)(3)
recognition letter
Chapter bylaws signed by the president
and secretary
Current state incorporation
Tax or employer ID number
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AABE Seattle-Portland Chapter
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Prep-work: Activities
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You will need descriptions of your non-profit
activities:
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type of activity
purpose
frequency
how, when, where, and by whom
participation
fees/charges
percentage of chapter time spent on that activity
June 6, 2003
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Example
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Activity: AABE Seattle Fun Run/Walk
Purpose: to raise funds for scholarships and activities, and to raise
awareness of the AABE.
Frequency: annually
How, When, Where, By Whom: the Scholarship Committee will
organize this annual event to alternate between Portland and Seattle.
Necessary local permits for the route will be obtained. The event will
be advertised through the membership, at their places of employment,
community newspapers, and local sports related business, and other
AABE events. Scholarship Committee will solicit the assistance of
volunteers for the day of the event. Committee also will solicit sponsor
to help defray the cost of the event so that a greater percentage of the
money raised goes to fund scholarships and other activities.
Participation: open to the public; participants must register
Fees/charges: a registration fee
Time: 25%
June 6, 2003
AABE Seattle-Portland Chapter
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Prep-work: Scholarships
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You will have to submit scholarship
award guidelines if your chapter awards
or intends to award scholarships.
We are willing to share our guidelines
and application with you – just ask.
June 6, 2003
AABE Seattle-Portland Chapter
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Prep-work: Bylaws
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Your bylaws document (and state
incorporation document) needs to
include language requested by the IRS
(the IRS calls it “sample language,” but
they really want that exact language).
We are willing to share that with you –
just ask.
June 6, 2003
AABE Seattle-Portland Chapter
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Prep-work: Tax ID
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Obtaining the employer ID number is
the easiest part of the process.
You can obtain a tax ID number by
mailing or faxing Form SS-4 or by
calling 800-829-4933.
June 6, 2003
AABE Seattle-Portland Chapter
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Prep-work: Forms
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You’ll need the following IRS forms for a
complete application:
Form 1023 – Application
Form 872-C – Consent Fixing Period of
Limitation
Form 8718 – User Fee
You may download the forms at www.irs.gov.
There is no online application.
June 6, 2003
AABE Seattle-Portland Chapter
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The Application
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Form 1023
Part I – Applicant
Part II – Activities and Operational
Information
Part III – Technical Requirements
Part IV – Financial Data
Schedule H - Scholarships
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AABE Seattle-Portland Chapter
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The Application
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The space on the page should not limit your
response. For example, you should attach
additional pages to describe your activities.
Attach to your application all of the prep-work
documents mentioned in the earlier slides.
Submit the completed application and other
forms with the fee to the address shown on
Form 8718.
June 6, 2003
AABE Seattle-Portland Chapter
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The Application
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About the fee:
The fee will vary depending on the size
of your annual gross receipts.
When we filed, the fee was $150 for
under $10,000 and $500 for over
$10,000.
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AABE Seattle-Portland Chapter
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What Happens Next
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After submitting the application, expect
correspondence from the IRS.
Contact the IRS if you haven’t heard
anything within 30 days.
Be patient! For a smooth process, keep
in mind the following important
considerations.
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AABE Seattle-Portland Chapter
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Important Considerations
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Again, if you can pay someone, do it!
But, if you’re a new chapter, it may not
be cost effective to hire someone since
you will need to spend a significant
amount of your time with that person
defining your activities and goals.
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AABE Seattle-Portland Chapter
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Important Consideration
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Dedicate about two members to the process.
Develop a good relationship with your IRS
reviewer.
Check your mailbox regularly.
Be mindful of slow mail from the IRS – your
response time may be cut in half.
Stick to response deadlines and call the IRS
immediately if there will be a problem
meeting a deadline.
Stay on top of the IRS’ review.
June 6, 2003
AABE Seattle-Portland Chapter
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Important Considerations
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Keep a log of any telephone
conversations with the IRS.
Keep a complete file of all
correspondence to and from the IRS.
Follow IRS directions exactly.
All correspondence to the IRS has to be
in writing to be officially recognized.
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AABE Seattle-Portland Chapter
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Important Considerations
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Do not expect the ability to e-mail or fax
responses to the IRS, but don’t hesitate to
ask whether you can.
Remember any annual tax duties that my be
necessary - Form 990 or an audit of your
financial records.
If you are a large chapter, you may consider
professional tax advice.
Ask for help! Call us and others for tips on
how to get your 501(c)(3) recognition!
June 6, 2003
AABE Seattle-Portland Chapter
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Contact Information
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Sonya Baskerville
[email protected]
503-230-5904
Kirsten Watts
[email protected]
206-220-6762
 An electronic version of this presentation is available
upon request and at www.aabe-sea-por.org
June 6, 2003
AABE Seattle-Portland Chapter
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