1. CALIFORNIA COMMUNITY FOUNDATIONS PARTNERS IN FUNDING GUEST SPEAKERS: Alexander Posada, Director - Recreation & Parks ~ City of Santa Maria Ron Gallo, President & CEO - Santa Barbara Foundation Martha Harmon, Vice President Community Investment – Santa Barbara Foundation Judy Markline, Past President ~ PLAY & Past Trustee ~ Santa Barbara Foundation

2. What Is A Non-Profit? (IRS Section 115) --- an organization whose primary objective is to support some issue or matter such as the arts, charities, education, or recreation. Being a 501(c)(3), which is exempt from income and sometimes property tax and able to receive tax-deductible, charitable contributionsBeing a 501(c)(3), which is exempt from income and sometimes property tax and able to receive tax-deductible, charitable contributions Tax-deductible donations can be made to cities, as unit of governmentTax-deductible donations can be made to cities, as unit of government Requires little or no attorney support to be createdRequires little or no attorney support to be created Internet can be used as tool to connect directly to sourcesInternet can be used as tool to connect directly to sources Secretary of State’s Website – http://www.sos.ca.gov Public Counsel Website – http://www.publiccounsel.org

3. Mission Statement The best mission statements are clear, brief, and most of all, flexible. Goal or series of goals to benefit “humanity”Goal or series of goals to benefit “humanity” Selling points of your organization to a donor or patronSelling points of your organization to a donor or patron The organization’s valuesThe organization’s values Services you will promote and who they will reachServices you will promote and who they will reach

4. The People for Leisure And Youth Inc. is a non-profit public benefit corporation, committed to promoting public welfare and education through the acceptance of contributions for use in enhancing, maintaining, and promoting the recreation, leisure, and parks services offered by the Santa Maria Recreation and Parks Department. Our Mission

5. What Does P.L.A.Y, Inc. Support? Services for Active Adults Scholarship Opportunities For Kids Santa Maria Police Activities League

6. Operational By-laws Helps organization not to stray from its original objectivesHelps organization not to stray from its original objectives Written in a way that ensures agency’s ability to meet missionWritten in a way that ensures agency’s ability to meet mission Not required by IRS for tax-exempt status determinationNot required by IRS for tax-exempt status determination State Attorney General’s Registry of Charitable Trust and the Secretary of State will want to know about your organizationState Attorney General’s Registry of Charitable Trust and the Secretary of State will want to know about your organization Helpful in convincing your administration to be supportive of establishing a non-profit organizationHelpful in convincing your administration to be supportive of establishing a non-profit organization Develop at staff level, building in your agency’s safety netDevelop at staff level, building in your agency’s safety net Present by-laws as a draft for ratification by the new organization’s board of directors.Present by-laws as a draft for ratification by the new organization’s board of directors.

7. Board Of Directors Minimum of 3 board members required for corporationsMinimum of 3 board members required for corporations Optimum number of board determined by needs of organizationOptimum number of board determined by needs of organization Determine required qualifying skills and qualities of individualsDetermine required qualifying skills and qualities of individuals Recruit those supportive of your mission and existing advocatesRecruit those supportive of your mission and existing advocates Identify those willing to give of talent, time, and resources.Identify those willing to give of talent, time, and resources.

8. Articles Of Incorporation Official statements of creation of an organization filed with the Attorney General and Secretary of StateOfficial statements of creation of an organization filed with the Attorney General and Secretary of State Important to protect both board and staff from legal liabilities incurred by the organizationImportant to protect both board and staff from legal liabilities incurred by the organization Makes the corporation the holder of debts and liabilities, not the individuals and officers who work for the organizationMakes the corporation the holder of debts and liabilities, not the individuals and officers who work for the organization

9. Operational Budget Practical plan to achieve goals stated in mission statementPractical plan to achieve goals stated in mission statement Created for first year of operationsCreated for first year of operations Forms for budget creation provided by IRS for submission with tax-exempt applicationForms for budget creation provided by IRS for submission with tax-exempt application Estimate revenues which organization will generateEstimate revenues which organization will generate

10. Record-Keeping System Preservation of documentsPreservation of documents –Board Documents –Meeting Minutes –Financial Statements –Bylaws –Articles of Incorporation –Other official records Contact your appropriate state agency for what records are required to be kept on fileContact your appropriate state agency for what records are required to be kept on file

11. Financial Accounting System Keep independent from your agency’s finance system and do not co-mingle fundsKeep independent from your agency’s finance system and do not co-mingle funds Create an accounting system for partnership vs. being a subordinate groupCreate an accounting system for partnership vs. being a subordinate group Separation of funds by board treasurerSeparation of funds by board treasurer Establish a system of checks and balancesEstablish a system of checks and balances Financial software such as Quickbooks or QuickenFinancial software such as Quickbooks or Quicken

12. Filing For 501(c)(3) Status Application (Form 1023)Application (Form 1023)http://www.irs.gov/pub/irs-pdf/f1023.pdf Detailed Instructions (Publication 557)Detailed Instructions (Publication 557)http://www.irs.gov/pub/irs-pdf/p557.pdf Filing FeesFiling Fees The amount of the user fee depends on the applying organization's average annual gross receipts. They range from $400 to $850 based on a four average of gross receipts. IRS WebsiteIRS Websitehttp://www.irs.gov/pub/irs-pdf/p4220.pdf

13. Federal Employer Identification Number Non-profits are required to obtain an Employer Identification Number (EIN)Non-profits are required to obtain an Employer Identification Number (EIN) EIN identifies organization when tax documents are filedEIN identifies organization when tax documents are filed Form SS-4 to apply for EIN or online:Form SS-4 to apply for EIN or online:http://www.irs.gov/businesses/small/article/0,,id=98350,00.html

14. Benefits of Tax Exempt status include... Limited Income Tax, if anyLimited Income Tax, if any Possible exemption from some sales taxPossible exemption from some sales tax Some real properties exempt from Property TaxSome real properties exempt from Property Tax Gifts of cash, property and stocks/bonds are tax deductable for donorsGifts of cash, property and stocks/bonds are tax deductable for donors Reduced postage expense for mass mailingsReduced postage expense for mass mailings

15. Tax Exempt Application Process Franchise Tax Board publication #927 explains the exemption process.Franchise Tax Board publication #927 explains the exemption process. Form 3500 is the application form exemption.Form 3500 is the application form exemption. California Attorney General form CT-1 is the Initial Registration Form for a charity.California Attorney General form CT-1 is the Initial Registration Form for a charity. A Form 100 California Corporation Tax Return and a Form RRF-1 Annual Registration for charitable organizations needs to be completed annually.A Form 100 California Corporation Tax Return and a Form RRF-1 Annual Registration for charitable organizations needs to be completed annually.

16. Charitiable Solicitation Law Requirements Fundraising Plans of OrganizationFundraising Plans of Organization –Be aware of regulation regarding soliciting funds within the state, county, or city in which the organization functions –Obtain any permits or licenses required –File annual report as required by the state regulatory agencies. –Drawings, games of chance, events with alcohol all have special regulations Contact State Attorney General’s Office for regulation specifics.Contact State Attorney General’s Office for regulation specifics.