1. 501(c)(3) Status: Pros and Cons, Steps to Follow
Walter E. Diercks, Esq.
Brenda McKinney, Esq.

2. Pros: Why Do It? Credibility
Tax deductibility of membership dues and donations
Limiting liability of officers, directors and members

3. Cons: Why It Might Not Make Sense for You
Effort and expense to incorporate and apply to IRS for 501(c)(3) determination
Ongoing effort and expense to maintain corporate status and comply with IRS requirements

4. Simplified Description of Steps to Incorporate and Apply to IRS
First Steps:
Write and file articles of incorporation. Filing Fee
Obtain federal Employer Identification Number (EIN)
Write Bylaws
Establish a Conflict of Interest Policy

5. Simplified Description of Steps to Incorporate and Apply to IRS (cont
Going to the IRS:
Obtain access to Pay.gov account
Apply for and obtain Tax-Exempt Status from the Internal Revenue Service (IRS)
Currently $ EZ filing fee (small organizations with less than $250,000 in assets and expected gross revenue of less than $50,000/year for current and next two fiscal years)

6. Simplified Description of Steps after IRS issues 501(c)(3) determination letter
Once you have IRS determination letter:
Prior to solicitation of charitable contributions, determine whether there are local or state law requirements for solicitation of charitable contributions
Satisfy local license requirements, if any
Comply with financial requirements needed to maintain tax-exempt status and other state or local requirements

7. Practical Issues for Consideration
Recruiting Board Members & Officers – How will the organization’s constituency be represented?
Board Meetings – How often and how long will the board meet?
Fundraising
Outreach to members and potential members
Accounting
Evaluation – How will the results of the organization’s work be assessed and reported?
Consider insurance – liability and for officers and directors

8. Walter Diercks, Esq. wdiercks@rwdhc.com (202) 861-0870
Questions?
Walter Diercks, Esq. (202)