I travel around from state to state and sell kites and garden spinners. I would like to know if I can turn my business into a non profit business for disabled veterans.
Answers
Hi Justin,
While you CAN...the question is SHOULD you? It can be very cumbersome to administer a non-profit. Are you adept at writing grants? Do you have time to request donations? Do you have a board of directors? Have you determined how the annual record keeping will affect you?
And the biggest reason is WHY? You can very efficiently have a for-profit business that supports a veteran cause, without having to be a non-profit. A friend of mine just shut down his veteran non-profit and started a veteran for-profit just for those reasons.
Too often people think they need a non-profit to support veterans' causes. Not true. And the more money you make, the more veterans you can help. Making a profit does not undermine your good will efforts...it helps them.
I guess you would need to list the pros/cons of switching to a non-profit and see what you come up with. If I can be of help, feel free to reach out.
Brian Richardson
www.VetLaunched.com
I have my normal Business (S-Corp) partnered with my NonProfit to have an unfair advantage. Corporate Sponsorship can be used on the 501©3 side to fund a pipeline into your normal business and it happens everyday.
Would you be looking for people to make tax deductible donations to you? and if so why?
If you business purpose is to create profits for helping veterans then there is no reason to be a non-profit. You are then classified as a for profit social enterprise. I work with charitable non-profits, for profit social enterprises as well as public and private foundations. Contact me directly if you want to explore this deeper.
james.d.bishop@morganstanley.com
Yes you can, but are you willing to meet all of the requirements. You've gotten some very good response, but there is one that you may want to consider; having both; a profit with a non-profit arm. This should include the training for veterans and may include providing himes and future jobs for these veterans. It can be done!
Yes you can incorporate as a nonprofit. Steps are
1 Incorporate 2. Apply for EIN 3. Apply for IRS Form 1023-EZ on line and fee have to be paid by credit card or bank account. If you need more info let me know at Linda.Gray@scorevolunteer.org
Yes you can incorporate as a nonprofit. Steps are
1 Incorporate 2. Apply for EIN 3. Apply for IRS Form 1023-EZ on line and fee have to be paid by credit card or bank account. If you need more info let me know at Linda.Gray@scorevolunteer.org
Justin's comments 'right on'. Regardless, you can legally take personal compensation......... a sensible amount. ( check Wounded Warrior for guidance ------ they take approximately 40% for promotion which includes paychecks -- leaving 60% to those in need . Absurd. )
An accountant with 501(c)3 experience can direct you. Tax returns available to all. GK
Tony - G'Morning! I agree with Justin, yes it can be done. I'd also like to add is to really understand why you'd like your company to be a non-profit. There are pros & cons for the decision. Hope you think through the various options you may have available and also consult your trusted tax accountant. Happy to discuss further, good luck my friend! - Jai
Hi Tony - the simple answer is yes.
You'll need to refile your business incorporation papers and then pay the extra fees for 501(c)3 status.
Every state is different, so I would recommend reaching out to your secretary of state where you originally filed for your business, and asking them for feedback. As long as you meet the criteria for being a non-profit, you'll hear back within a few weeks on whether you received your tax exempt status.
Here's a blog I wrote last year about the foundation that I started: http://www.moodleyfoundation.org/news/starting-a-foundation-with-less-than-1000/
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