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501(c)3/Non-Profit

Corrisa Grau
Justin Taylor
Ayumi Yoneyama
Emile Lane
History of People’s
-People’s was established on Sept. 29th, 1970
-Entity that exists now is the same
~Just different business type
What is a Non-Profit?
 A Non-Profit is tax exempt

 Tax exemption is Obtained from the IRS


There is more than one type of Non-
Profit:
 501(c)3 through 501(c)27
 501(c)3 which is a public charity or private
foundation is most common
Advantages of having a Non-Profit
 1. Tax Exemptions
 2. Ability to Receive Public Funds
 3. Limited Liability for Members and
Directors.
 4. Exceptions to the Limited Liability Rule
 5. Separate and Perpetual Existence
 6. Potential for discounts
What are some of the
Disadvantages?
- Expensive
- Extensive Administration Requirements. Have
plenty of active volunteer participants* to share in the
following responsibilities:
~ Board Support and Development
~ Fiscal Management
~ IRS & State Reporting Requirements
~ Insurance and Risk Management
~ Grant Writing & Other Fund Raising.
Disadvantages continued:
- Time required in applying for and gaining non-profit
status.
- Potential for Unhappy employees
- Using volunteers/staff who have not been screened
- Boards of Directors who do not understand their
legal responsibilities
- Lack of adequate fiscal controls.
- Defining what is and is not “fund raising costs” for
IRS Form 990.
Next Presenters
 Ayumi Yoneyama
 Emile Lane
 Corrisa Grau
Processes for 501(c)(3)
 Form 112, Articles of Incorporation--
Nonprofit
 SS-4, Application for Employer Identification
Number (EIN)
 Bylaws
 Form 1023 & 8718, tax-exempt applications
 RF-C, Registration for Corporation
Articles of Incorporation-Nonprofit
Form 112
 File at Corporate Division of Secretary of
State
 Types of nonprofit corporations: public
benefit, religious, mutual benefit.
 Required wordings in #5 & 8
Application for EIN
Form SS-4
 EIN: Employer Identification Number
 Number assigned to businesses for tax filing
and reporting purposes
 File with the IRS
 Will be immediately available for use if
applied online or by phone
Bylaws
 Guidebook for your nonprofit corporations
 No particular forms
 Certain items should not be included (fiscal
year, authority to sign checks, etc)
 Consistency with the law and the articles of
incorporation
 The Oregon law
Hierarchy of Legal Works

The law

Articles of Incorporation

Bylaws

Resolutions of Board
Application for Tax-exempt Status
Form 1023 & Form 8718

 File with the IRS


 Put Articles of Incorporation, Bylaws, EIN
 27 month period
 Legal form: corporation, trust, unincorporated
association
 Part Ⅳ, narrative description
RF-C
 Registration for Corporation
 File with Charitable Activities Section of
Oregon Department of Justice.
 Put the IRS determination letter, the articles of
incorporation, signed bylaws.
After Recognition of 501(c)(3)
 File annual financial reports with Department
of Justice
 File informational tax returns with the IRS
every year
 File annual reports with the Corporate
Division of Secretary of State
Cost of obtaining 501(c)
Form Cost Place to file
Articles of Secretary of State, Corporation
$50
Incorporation Division
(Confirmation
$5  
copy)
SS-4 No fee IRS

Form 1023 $750* IRS


Department of Justice, State of
RF-C No fee
Oregon
*For organizations averaging no more than $10,000 per year, the application
fee is $300, and for organizations averaging more than $10,000 per year,
application fee is $750.
How Long Will it Take?
 2-12 months for tax-exempt status
 Currently, 10-12 months behind in process
because of Hurricane Katrina
 Filling up forms: 100hours or more
Potential resources
-Multnomah County Legal Aid
-A Good possible resource for basic legal question
and possibly for referrals for lawyers to work with.
-www.local.com
-a search engine for local lawyers. Many “pro-
bono” lawyers listed
-T.S. Wrobel & Associates
-San Francisco based law firm that specializes is
starting non-profits in all 50 states.
Potential Resources
- The Foundation Group: Organization that
specializes in non profit start-up services.
~cheaper than most attorneys
~do most all the work for you
-The Oregon State Bar: Probably the best resource
for connecting with local lawyers.
~has set aspirational standard that all Oregon
perform at least 80 hours of pro-bono work
annually
Possible Resources
-Lewis & Clark College
~August 28th, 2006 opened the small
business clinic to provide pro-bono
services to Portland small business owners
in need of low cost or even free legal
services.
The Others
Why were these co-ops chosen?
-Involvement
~most importantly with contacts
~Most information with greatest detail
-Range
~these co-ops cover all aspects
Community Mercantile Education
Foundation (CMEF)

The idea model


-A for profit co-op with a non-profit wing &
501(c)3 status
Davis Food Coop
The ideal outreach
-The most award winning education programs
-No non-profit
-funded by the for profit co-op
Ozark Natural Foods
Currently in the filing process
-Trying to establish a non-profit wing with
501(c)3 status.
-During the waiting time:
~they are implementing an education
program and funding it through the
co-op’s outreach budget
Covering All Aspects of the Range
CMEF DAVIS
(2 entities) (1entity)

Wants this Currently this


OZARK