Quick Guide: How to Start a Non-Profit Organization in Virginia
How to Start a Non-Profit in Virginia
Source: https://law.richmond.edu/faculty/files/Short_Guide_for_Nonprofits_1st_ed.pdf
FORMATION
1. Needs Assessment
i.
Research the community demographics to
determine size and needs of geographic area that your organization would like
to serve
ii.
Identify area competitors and other
organizations that provide the same/similar services to ensure there is need
for your organization
iii. Identify stakeholders with whom the organization can collaborate to promote and maintain the organization
2.
Mission Statement
i.
Draft a mission statement that explains
the nonprofit’s purpose in a concise manner
ii.
Include a short one-sentence statement that
is easily remembered
iii. Include another longer version with more detail. Keep it broad to allow space to expand and reinvent in the future
3.
Articles of Incorporation
i.
The Articles of Incorporation serve as
the defining document for your organization, listing the purpose and the main
aspects of the organization and governance. Included in the articles should be:
i.
Corporate name
ii.
The director(s) of the organization
iii.
A registered agent and office
iv.
An incorporator
v.
Whether the organization will be member-based
ii.
Include less rather than more, including
only what is formally required by statute to avoid the need for frequent
amendment
iii. Upon completion, submit to the State Corporation Commission along with fee
4.
By-Laws
i.
File by-laws to secure tax-exempt status.
File at the same time as the Articles of Incorporation
ii.
The by-laws outline the internal governance
structure and operations of the board
iii.
Should be general enough to allow for
flexibility but specific enough to serve as a guiding document concerning
the responsibilities, structure, and operations of the Board of Directors
iv.
Outline the structure of the Board of
Directors:
i.
Number
ii.
Terms
iii.
Leadership Positions
iv.
Committees
v.
Create provisions for keeping copies of
the Article of Incorporation, By-Laws, and financial statements in specified
location
5.
Determine Board Structure
i.
The duty of the Board of Directors is to
carry out the mission of the corporation:
i.
Make decisions about the policies and
operations of the corporation
ii.
Has the responsibility to tend to the
legal, financial, operational, and human resources functions
ii.
Fully brief board members about the
organization’s history, goals, and operations. They must be able to commit to monthly/quarterly
meetings.
iii.
Documents board members should be provided
with:
i.
Mission Statement
ii.
Articles of Incorporation
iii.
By-Laws
iv.
Most recent annual report
v.
Financial statements (budget and tax filings
of form 990)
vi.
Policies
vii.
Expectations for meeting attendance and
committee work
viii.
List of current board members with complete
contact information and committee designations
iv.
Board members are bound by two primary
duties:
i.
Duty of Care:
1.
To act in good faith
2.
Act with the care an ordinarily prudent person
in a like position would exercise under similar circumstances
3.
To act in a manner the director reasonably
believes to be in the best interests of the corporation
ii.
Duty of Loyalty:
1.
Requires board members to pursue the
organization’s best interest, avoiding conflict of interest. Prohibits a
director from engaging in self-dealing unless:
a.
There is a full disclosure to the Board
b.
The conflicted board member does not participate
in any decision relating to their personal interests
c.
The transaction is clearly in the corporation’s
best interest
MAINTENANCE
6.
Corporate Status
i. Organization must file an Annual Report with the State Corporation Commission to maintain corporate status each year
7.
Tax Requirements
i.
If organization exceeds $5,000 in gross
receipts an application for tax exempt status must be filed within 15
months from the organization’s creation (Form 1023)
ii.
Section 501 (c)(3) exempts the
organization from federal taxes and allows donors to deduct contributions from
their taxes
iii.
Must apply for an Employer Identification
Number (EIN) even if your organization does not have employees (Form
SS-4)
iv.
File Annual Report (Form 990) once tax
exempt status is obtained
i.
Must state specifically:
1.
Items of gross income
2.
Receipts
3.
Disbursements
4. Other information required by IRS
8.
Fundraising
i.
The organization must properly register with
state and local government before fundraising or soliciting donations
ii.
Apply for grants from government agencies,
foundations, and corporations that are applicable to the mission of your
organization
iii. All fundraising professionals must be registered with state/proper local authorities before solicitations begin
9.
Employees/Volunteers
i.
Have a handbook in place to outline
guidelines, policies, and procedures of your organization
Comments
Post a Comment