Starting a non-profit can be a difficult company to begin. Not only do you (often) have to prove that you are benefiting the public in some manner, you'll also be liable for a large sum of money once donors hear you're doing good. That means your Florida Corporation has to continue to do good, no matter how difficult that may become.
If this hasn't scared you away yet, you may be the perfect new director for a non-profit company in your area. Let's take a look at some the groundwork you'll need to do.
To begin with, you'll need to start an LLC or a corporation (most non-profits start as LLCs due to low start up costs and the availability of becoming an LLC. You can always grow into a corporation if you desire to). Once you've decided on this, it's time to start pursuing the rest of your documentation.
Depending on the exact details of your non-profit-to-be, you may have more documentation that needs to be worked with, For instance, a non-profit with the sole purpose of sending children to Disney World may have to sign contracts with Disney World for the express privilege of raising funds to send the kids on the trip, etc. We strongly recommend attaching a lawyer to your cause, whatever it is, to assist you with the clarity of your functions and needs to get you off on the best foot possible.
Gaining your 501(c)(3) Status
To gain your tax-exempt status, you'll need to communicate with the IRS. This is not something that your registered agent will do for you. Applications can take anywhere from six months and beyond. Becoming a corporation or an LLC does not change this in the slightest.
At this point in your forming, it is best to do deeds rather than look for donations. The tax verification status at this point is complicated and, while it is doable, large sums of money can be more of a hindrance than anything during this time. If possible, ask that donations of items or non-liquid assets be donated instead.
For instance, a food pantry with a pending tax exempt status might ask for donations of canned goods and produce to give away to the hungry rather than several thousands of dollars. This may make it difficult to keep the light on, but this is a budgeting issue. Keep someone money-minded on the staff and you should make it through.
Who Takes the Tax Deduction?
Before you have a tax-exempt status, you will function as any other company and donations must be counted toward your income. This also means that your donations will not be tax-deductible for your donators or you. Again, as above, this is why the best donation during this time is usable items. Someone using their donation to pay your electric bill may not be counted as income, but someone donating $5,000 to purchase food for the hungry will, indeed, be income that the organization then must figure out how to tax.
After you have tax-exempt status, it is easy enough to release a receipt with donations and offer tax-deductible paperwork for donations which are large enough to apply to this. Do make certain that these documents are tracked and noted. Anyone who is audited may come asking for a copy of their paperwork from you in the future.
Many non-profit businesses become corporations in the long-term so they can enjoy the perks of a larger staff and a more advanced outreach system. Corporations are simply easier to get a toe in overseas when they begin to expand.
If you intend to keep your feet firmly planed on US soil throughout the foreseeable future, we can only encourage you to incorporate from an LLC if your financial advisers also encourage the same transformation. Indeed, many non-profit companies go their entire lifespan without ever incorporating or worrying about the process.