In order for donors to receive a tax benefit, non-profit organizations must be recognized as a 501(c)3 or other equivalent charitable business by the Internal Revenue Service. This can be accomplished by falling under an existing organization’s fiscal sponsorship or, by establishing your own federally recognized charitable foundation.
Becoming your own non-profit organization is a simple but time-consuming process that involves filing a number of State and Federal organizational documents, the biggest being the Internal Revenue Service Form 1023, seeking income tax exemption. The application demonstrates that your organizational structure is well thought out and does create any conflicts of interests for those involved. Applications can take weeks to months to fill out along with supporting documentation and several months for the IRS to review after filing.
The Foundation for Community Development, Inc. and its professional partner organizations have the resources, tools and knowledge to guide you to the best solution. Organizations with the immediate need for fundraising should establish a fund under the foundation allowing them to complete the paperwork for their organization in the future.