1. 1/11/2019

2. How to Start a Nonprofit in Maryland

3. Are you dedicated and passionate about certain causes that affect you and your community?
Are you highly organized and ready to put in the time, effort, and money to give even more back to your community? 

4. “Starting a nonprofit" means that you want to form a 501(c)(3)public charity

5. A 501(c)(3) organization is a corporation, trust, unincorporated association, or other type of organization exempt from federal income tax under section 501(c)(3) of Title 26 of the United States Code.
29 types of 501(c) nonprofit organizations

6. 501(c)(3) tax-exemptions apply to entities that are organized and operated exclusively for:
religious
charitable
scientific
literary
educational
testing for public safety
amateur sports competition
prevention of cruelty

7. 501(c)(3) organizations are prohibited from supporting political candidates, as a result of the Johnson Amendment enacted in 1954.
501(c)(3) organizations risk loss of their tax-exempt status if these rules are violated.

8. 501(c)(3) exemption applies also for any non-incorporated community chest, fund, cooperating association or foundation organized and operated exclusively for those purposes.
There are also supporting organizations—often referred to in shorthand form as "Friends of" organizations.

9. Do your Homework!
Search for and identify similar nonprofits in your community
Gathers, organizes, and distributes information about U.S nonprofits
Make sure the name is available
IRS Exempt Organizations Select Check:

10. Purpose = Mission

11. Mission statement: No set formula
a formal summary of the aims and values of an organization
No set formula
Clearly communicate what the organization does
Clear, concise, and useful
Inspiring

14. The 3 Pivotal Elements of a Great Mission Statement

15. A Cause or Who You Serve (What matters? Who is important?)
An Action (What are you doing?)
A Result (What change can you see?)
These three elements unite the best mission statements, and typically, ONLY these elements. (Though often, one or more element is only implied.)
Nonprofits like to make their mission statements complex, but the truth is complexity doesn’t make something valuable.
That’s why these three elements are so useful: this is YOUR nonprofit, distilled to its essence.
It’s a little elevator pitch: it’s not supposed to tell everything about your nonprofit. It’s supposed to get people interested in hearing more.

17. Michigan Rural EMS Network is a diverse network representing EMS interest in Michigan developing partnerships with providers, to identify challenges, strategies, and opportunities to improve patient outcomes for all Michigan residents.
The mission of the Michigan Rural EMS Network
is to provide support to Michigan rural EMS
professionals and EMS agencies.

18. Excellent Mission Statements
TED: Spreading Ideas. (2 words)
The Humane Society: Celebrating Animals, Confronting Cruelty. (4 words)
Smithsonian: The increase and diffusion of knowledge. (6 words)
Wounded Warrior Project: To honor and empower wounded warriors. (6)
Livestrong: To inspire and empower people affected by cancer. (8)
Human Rights Campaign Working to achieve lesbian, gay, bisexual and transgender equality. (9)

19. Recruit a Board of Directors
Ready?
Recruit a Board of Directors
At least 5-7 unrelated individuals that will be legally responsible legally for the governance, finances, and legal compliance
Unrelated = both familial and business relationships)
The most important quality of a successful board member is commitment to mission.

20. Develop Program Plans & Budget
Describe your proposed program activities in detail:
includes exactly whom you plan to serve and by what means.
Create a budget forecast for the first three years:
includes all expected forms of income (grants, donations, fee for service, etc.)
expenses to operate your business and deliver the programs described.

21. Organization’s rules for internal governance
Draft Bylaws
Organization’s rules for internal governance
How the board of directors functions
How important decisions are made and carried out
Signed by at least two officers
Must be attached to the federal tax-exemption application (but do not need to be submitted to the state)

22. Develop a Conflict of Interest Policy
Assures conflicts of interest are avoided whenever possible and mitigated when decisions are made regarding the use of organizational resources and/or assets.
A conflict of interest policy and accompanying declaration of interest statement help to protect the organization and its board members in cases where competing interests exist.
Conflict of Interest Policy should be attached to federal tax-exemption application

23. File Articles of Incorporation (Corporate Charter)
File Tax-Exempt Non-Stock Articles of Incorporation
In order to have articles that will qualify your corporation for Federal §501(c)(3) tax-exempt status, you must have a dissolution clause that meets the requirements of the IRS indicating that if your organization is dissolved, “assets will be distributed for an exempt purpose described in §501(c)(3), or to the federal government, or to a state or local government for a public purpose.”

24. $170 ($150 fee plus $20 Organization & Capitalization Fee)
File with Maryland State Department of Assessments and Taxation, Corporate Charter Division
301 W. Preston Street, Room 809
Baltimore, MD
Fee:
$170 ($150 fee plus $20 Organization & Capitalization Fee)

25. Hold Organizational Meeting
Board members elect officers (including President, Vice President, Secretary and Treasurer);
Bylaws are ratified
Articles of Incorporation are accepted
Meeting minutes taken to create a record of the meeting and elected officers
This meeting is required by law in order to complete formation of your corporation.

26. Obtain Federal Employer Identification Number (EIN) from the IRS
You can file the form SS-4 online or by mail, phone, or fax.
Internal Revenue Service
Attn: EIN Operations
Cincinnati, OH 45999
Phone: (800)
FAX: (631)
Obtain Federal Employer Identification Number (EIN) from the IRS

27. Obtain Tax-Exempt Status
File an application with the IRS - Form 1023 Application
Receive a positive determination letter in response from the IRS.
The time needed to complete this form varies greatly based on individual circumstances.
The form can be difficult to understand, and extremely time consuming.
Answering incorrectly can damage your application.

29. But wait! There’s more!
There are still some important legal requirements you will need to meet to obtain exemption from certain state taxes, and to register to fundraise.
File Maryland Charitable Solicitation Form (COR-92)
Apply for Exemption from State Sales and Use Tax
File for State Income Tax-Exemption

30. Maintain Your Nonprofit Status
Obtain any Required State or Local Licenses or Permits
File Maryland Form No. 1 – Personal Property Return
File Form 990-N, Form 990-EZ, or Form 990 with IRS based on annual gross receipts
Update Solicitation Registration Annually
Substantiation and Disclosure Requirements - Organizations must give written acknowledgement of charitable contributions, and organizations must make certain documents available publicly.
Resident Agent and Principal Office
Maintain Accurate and Complete Corporate and Financial Records

31. If you have Employees or Independent Contractors
(Failure to comply with some employment laws may expose individual Board Members to personal liability that is not covered by Directors' & Officers' Liability Insurance.)
Register Employees with Comptroller of Maryland
Pay State Employment and Unemployment Taxes
Pay Federal Employment Taxes
Pay Workers’ Compensation Insurance
Display Required Posters
Obtain Proper Insurance for Organization, Board Members and Officers

32. A nonprofit is a business

33. How Do I Remember all of This?

34. 1/11/2019
What we do…
The Nonprofit Institute provides many programs designed to meet an organization's interests and needs.  These programs include:
Executive Director roundtables
Board development guidance and assistance
Volunteer Southern Maryland website support
Affinity Group meetings:
Fundraising Professionals, PR & Marketing Professionals, Volunteer Coordinators
Courses, workshops, webinars
Resource-rich monthly e-newsletter
Annual Conference
Resource assistance including pro bono support
Experience, Advice and Insight

35. Cara Fogarty cfogarty@csmd.edu www.csmd.edu/NonprofitInstitute
1/11/2019
Cara Fogarty