Nonprofit, Public and Professional Organizations

One of the great misconceptions surrounding nonprofit corporations is the idea that they all qualify for tax exemptions. The truth is that jumping through all the hoops to obtain tax-exempt status is hard work and many nonprofit organizations pay taxes like their for-profit counterparts. For those that do qualify for tax-exempt status, the most common designation, known as a 501(c)(3) status, is available for entities that qualify as public charities and private foundations. This one designation, however, doesn’t come close to providing options for the wide range of nonprofit organizations in existence.

To accommodate many other kinds of nonprofit organizations seeking tax exempt status, the IRS has created 33 different tax-exempt statuses for which nonprofits can apply. See the chart below for more information:


Nonprofit tax exemption chart 1

About the Author

Drake Forester, Chief Legal Strategiest - Northwest Registered AgentDrake Forester is the chief legal strategist at Northwest Registered Agent, LLC. Throughout his career, Drake has researched many complicated nonprofit compliance issues and provided whitepaper and publications for many leading nonprofit organizations in the United States.

If your nonprofit corporation is preparing to do business in a new state, you’ll need to register your nonprofit organization as a foreign entity in every state in which you want to solicit donations or sell products and services. The act of registering your nonprofit to do business out-of-state is known as “qualifying a foreign entity,” and below you’ll find everything you need to know about qualifying your nonprofit to do business in all 50 states: 

The Qualification Process

Qualifying your nonprofit to do business outside of the state in which it was incorporated is a state-by-state process. Each state has particular requirements, but all states have one thing in common: a certificate of authority form. The actual name of the form varies slightly from state to state, but in each state the certificate of authority is the main document you will need to file. This form is filed with the secretary of state or corresponding agency.

About the Author

Drake Forester, Chief Legal Strategiest - Northwest Registered AgentDrake Forester is the chief legal strategist at Northwest Registered Agent, LLC. Throughout his career, Drake has researched many complicated nonprofit compliance issues and provided whitepaper and publications for many leading nonprofit organizations in the United States. 

Edward Levy

Certified Public Accountant with over 40 years experience in bookkeeping, accounting, finance, budgeting, planning, cash-flow management, taxation, employee benefit plans, cost accounting. Experienced in not for profits as well as privately-held and publicly-traded companies. Familiar with a wide variety of construction, manufacturing, service and natural resource industries. Strong IT background, and have experience in a multitude of software packages. Extensive user of EXCEL. Assistance with company formation and start-up issues. Strong legal background.

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Education

Bachelor of Business Administration (focus on Accounting & Finance), Bernard M. Baruch College of CUNY, 1972, Magna Cum Laude.

James Injeski

James Injeski

Current City: Delafield, WI

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The biggest difference between a benefit corporation and a nonprofit organization is that the benefit corporation is a for-profit corporation and the nonprofit is a not-for-profit corporation. What this means is that no individual within a nonprofit is legally allowed to profit from dividends and additional money left over at the end of the fiscal year after all expenses have been covered. At the end of a fiscal year, if a corporation had dividends or additional leftover profits after all expenses have been taken care of, it can be distributed among shareholders as a profit. This is not an option for nonprofits, who do not have shareholders, and whose profit must go towards the purpose for which the organization was formed. Also, a benefit corporation can declare that total shareholder profit is not their primary goal. They can declare certain profit sacrifices in order to instead benefit the environment or society in some way.

Defining a benefit corporation

The primary difference here is in the fact that a benefit corporation has a charitable or socially conscious purpose that it makes provision for in its budget. So a benefit corporation was formed and exists to make a profit for its shareholders, and operate in the way that a regular corporation does. They do, however, follow a few additional guidelines:
  • Benefit corporations issue annual transparency reports.
  • Benefit corporation commit to operating in a sustainable fashion.

About the Author

Drake Forester, Chief Legal Strategiest - Northwest Registered AgentDrake Forester is the chief legal strategist at Northwest Registered Agent, LLC. Throughout his career, Drake has researched many complicated nonprofit compliance issues and provided whitepaper and publications for many leading nonprofit organizations in the United States. 

Tivoli Theater

The Tivoli Theatre is owned and operated by Owen County Preservations, Inc. a not-for-profit, 501(c)3 corporation governed by a seven member Board of Directors. OCP is dedicated to preserving and increasing the awareness of Owen County’s rich architectural and historical heritage. The organization’s motto, Linking the Past With the Future, refers to our county’s history as seen in the architectural style, craftsmanship, and material used in earlier times by those who settled the county.

Formed in 1991, OCP strives to save and maintain these important and often endangered structures in Owen County by encouraging the preservation of our heritage while planning for the future growth of the communities in Owen County. We value the older buildings and items of historical significance throughout the county and have made it our endeavor to promote their preservation and restoration. We also see the importance of planning for the future through educating and involving the entire community.

The restoration of the Tivoli Theatre embodies the spirit of OCP and has become our largest undertaking to date. Through the presentation of films, performing arts and entertainment events, the Tivoli Theatre’s mission is to provide quality, affordable programming and serve as a gathering place for residents of Spencer and the surrounding area. As a celebrated historic landmark working toward a sustainable future, the Tivoli aims to inspire downtown revitalization and enhance pride in the community.

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My Location
24 N. Washington St
Spencer IN 47460
United States
Year Company Formed
2013
How SCORE Helped
Very early in the Tivoli Project, OCP began developing a business plan that would ensure the successful operation of the theater after the renovation was complete.  While it was recognized that the theater would be the primary source of revenue, it would be necessary to augment that revenue from other sources.  A key factor in doing so would be to maximize the utility of the building by incorporating spaces that could be rented independently from the theater, per se, or used to bolster the functionality of the theater.  It was also recognized that we would require an experienced theater director since none of the OCP directors nor it's membership had such experience.  The theater director would need to be a paid employee of OCP with a staff of volunteers under his or her direction.  A business plan was developed accordingly and reviewed by SCORE members Mike Spinks and Tad Wilson.  They provided several essential recommendations that were incorporated into the plan along with a few other changes that resulted from additional research suggested by the SCORE members.  A revised version of the plan was put together and again reviewed by Mike and Tad.  They recommended a few more minor changes that were incorporated into the third version, which they reviewed and "blessed".  They advised that the business plan is a "living document" and will need to be changed as situations develop, but provided us with the confidence that we needed to proceed.  As they predicted, two more minor changes were made before the business plan was "published".  Owen County Preservations is very grateful for the invaluable assistance provided by SCORE, and in particular Mike Spinks and Tad Wilson.  The Tivoli business plan allowed us to attain the confidence of the Cook Group as a viable custodian of their investment, capable of operating the Tivoli Theatre as a successful business.   It also provided the confidence needed by Owen County State Bank to provide us with an unsecured line of credit to use for start-up capital that was required to hire a director, purchase supplies, and meet other financial requirements necessary to start the operation. Our business plan was key to our success, and SCORE participation in its development was key to the success of the business plan.
 
Les Jordan
Treasurer
Owen County Preservations, Inc.
 

Union Gospel Mission of Tarrant County

At times, an organization dedicated to helping others may require some help of its own. Union Gospel Mission of Tarrant County (UGM-TC) is a united Christian organization and ministry dedicated to providing support and rehabilitation for the homeless in the Fort Worth community and has been committed to doing so since 1888. UGM-TC is no small operation – it is a six-acre campus with many buildings and 60+ employees who served 880 clients last year. In 2012, a few UGM-TC staff members sought the help of SCORE Fort Worth for guidance in tackling low-level managerial issues and a new undertaking for the organization: a major capital campaign to build a 60 bed women and family facility. But after a few months of collaboration, the SCORE Fort Worth mentors realized that there were more pressing issues that needed addressing – namely Human Resource management from the top. They were on-hand to help.

www.ugm-tc.org

My Location
Fort Worth TX 76102
United States
Year Company Formed
1888
My Successes

As of June 2013, Tarrant County’s homeless population had grown 10 percent since 2011 to 2,390, and the number of people living unsheltered more than doubled to 281, according to results of a January count by the Tarrant County Homeless Coalition. The count found 338 homeless families with children, up from 292 in 2011. To address the needs of this family population, UGM-TC announced plans to build the Scott Walker Women and Families Services Building, named for a commercial real estate developer and mission volunteer. The 39,707-square-foot building will have five rooms where two-parent families can stay with their children while getting back on their feet, five rooms for single men who are caring for their children and 28 rooms for single women who are participating in the long-term program. A 12-bed overnight dormitory will be for single women who walk in on a daily basis. That brings the capacity for single women at the Union Gospel Mission to 68 beds. It is scheduled to open in September 2014.

While living at the mission, homeless clients work with the staff to acquire the tools, education and support they need to become self-sufficient. Residents work with case managers to address factors that led to homelessness, including domestic violence, physical and mental health issues, and substance abuse. Clients stay an average of six months.

A capital campaign for the $8.2 million project is underway. The mission raised $5.9 million, and the Oklahoma-based Mabee Foundation has pledged to donate the last $1 million when the mission raises $7.2 million.

How SCORE Helped

SCORE Fort Worth embarked on a comprehensive study of UGM's staffing, management practices and general administrative functions with the goal of helping to improve the organization. From there, the team of mentors and UGM-TC staff met once a month to complete the organizational analysis.

As time wore on, it became clear that upper level management of UGM-TC had far larger workloads than could be managed. The SCORE mentors’ job became helping the small group at the top find ways to let go of some of the day-to-day tasks and allocating responsibility to other staff members.  With these newly defined goals in mind the mentors spent increasing amounts of time looking at the staffing situation and reworking job descriptions. 

At the beginning of the meetings together the need for high-level HR staff was mentioned but it was put to the side because of limited funding.  For many months it was put off, but by spring 2013, UGM-TC’s Board of Directors approved a staff position for an HR director.  It started as a part-time position, but in just a few months developed into a full time position. Special meetings were also held to work on a clear and usable organization chart.

Ask SCORE

            I recently purchased a children’s daycare center. The previous owner did not treat the staff well, and my top priority is to correct that situation. How do you suggest I accomplish that?

About the Author

            This column is brought to you by the Merrimack Valley Chapter of SCORE, with nearly 70 current and former business executives available to provide free, confidential, one-on-one business mentoring and training workshops for area businesses. Call 603-666-7561 or visit merrimackvalley.score.org for information on mentoring, upcoming workshops and volunteer opportunities. SCORE is a national, non-profit organization and a resource partner of the U. S. Small Business Administration.

Kathleen Doyle

Kathleen Doyle

Current City: Baltimore, MD

Currently Federal government employee managing marketing campaigns which involve traditional elements (paid ads, news, public relations, grassroots work) and new media/digital (websites, mobile, social media). Focus in strategy creation and management of ad agency/public relations firms/ internal creative resources to execute the campaign. Focus also on new tactics and technology utilized by marketers in digital realm. Additional Background: marketing, sales, agency work, and general business improvement through analyzing and managing projects.

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Education

<p>
BA from Salisbury University- concentration English/ Creative Writing</p>

<p>
Grad work towards MBA in Marketing&nbsp;at Towson University/ UB</p>

 Ask SCORE

       I own a software development company. While I wouldn’t consider myself disorganized,
at the end of most days I can’t help feeling I haven’t accomplished what I set out to do that day.
What can I do to better manage my time?

About the Author

       This column is brought to you by the Merrimack Valley Chapter of SCORE, with nearly
70 current and former business executives available to provide free, confidential, one-on-one
business mentoring and training workshops for area businesses. Call 603-666-7561 or visit
merrimackvalley.score.org for information on mentoring, upcoming workshops and volunteer
opportunities. SCORE is a national, non-profit organization and a resource partner of the U. S.
Small Business Administration.
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