1. Seeking 501(c)(3) Recognition Lessons Learned AABE Seattle-Portland Chapter June 6, 2003

2. AABE Seattle-Portland Chapter2 Background Sought for fundraising and tax purposes Submitted application in March 2001 Received 501(c)(3) recognition from IRS in May 2003

3. June 6, 2003AABE Seattle-Portland Chapter3 Background Expected a long process, but not two full years. Completed application ourselves Spent most of our time responding to IRS requests for information Benefits far outweigh the headache of the process

4. June 6, 2003AABE Seattle-Portland Chapter4 Background The benefits of 501(c)(3) recognition: Tax deductible donations Tax exempt status Funding from corporations and governmental entities who donate only to 501(c)(3) organizations.

5. June 6, 2003AABE Seattle-Portland Chapter5 Background If you’re well established and have money to hire someone to complete the application, DO IT! If you’re like us, little money and/or new chapter, here’s what you need to do....

6. June 6, 2003AABE Seattle-Portland Chapter6 Application Prep-work Before you begin, have ready: Descriptions of your chapter activities Budgets for the current tax year and the three subsequent tax years Scholarship award guidelines List of all funding sources

7. June 6, 2003AABE Seattle-Portland Chapter7 Application Prep-work The national organization’s 501(c)(3) recognition letter Chapter bylaws signed by the president and secretary Current state incorporation Tax or employer ID number

8. June 6, 2003AABE Seattle-Portland Chapter8 Prep-work: Activities You will need descriptions of your non-profit activities: type of activity purpose frequency how, when, where, and by whom participation fees/charges percentage of chapter time spent on that activity

9. June 6, 2003AABE Seattle-Portland Chapter9 Example Activity: AABE Seattle Fun Run/Walk Purpose: to raise funds for scholarships and activities, and to raise awareness of the AABE. Frequency: annually How, When, Where, By Whom: the Scholarship Committee will organize this annual event to alternate between Portland and Seattle. Necessary local permits for the route will be obtained. The event will be advertised through the membership, at their places of employment, community newspapers, and local sports related business, and other AABE events. Scholarship Committee will solicit the assistance of volunteers for the day of the event. Committee also will solicit sponsor to help defray the cost of the event so that a greater percentage of the money raised goes to fund scholarships and other activities. Participation: open to the public; participants must register Fees/charges: a registration fee Time: 25%

10. June 6, 2003AABE Seattle-Portland Chapter10 Prep-work: Scholarships You will have to submit scholarship award guidelines if your chapter awards or intends to award scholarships. We are willing to share our guidelines and application with you – just ask.

11. June 6, 2003AABE Seattle-Portland Chapter11 Prep-work: Bylaws Your bylaws document (and state incorporation document) needs to include language requested by the IRS (the IRS calls it “sample language,” but they really want that exact language). We are willing to share that with you – just ask.

12. June 6, 2003AABE Seattle-Portland Chapter12 Prep-work: Tax ID Obtaining the employer ID number is the easiest part of the process. You can obtain a tax ID number by mailing or faxing Form SS-4 or by calling 800-829-4933.

13. June 6, 2003AABE Seattle-Portland Chapter13 Prep-work: Forms You’ll need the following IRS forms for a complete application: Form 1023 – Application Form 872-C – Consent Fixing Period of Limitation Form 8718 – User Fee You may download the forms at www.irs.gov. There is no online application.www.irs.gov

14. June 6, 2003AABE Seattle-Portland Chapter14 The Application Form 1023 Part I – Applicant Part II – Activities and Operational Information Part III – Technical Requirements Part IV – Financial Data Schedule H - Scholarships

15. June 6, 2003AABE Seattle-Portland Chapter15 The Application The space on the page should not limit your response. For example, you should attach additional pages to describe your activities. Attach to your application all of the prep-work documents mentioned in the earlier slides. Submit the completed application and other forms with the fee to the address shown on Form 8718.

16. June 6, 2003AABE Seattle-Portland Chapter16 The Application About the fee: The fee will vary depending on the size of your annual gross receipts. When we filed, the fee was $150 for under $10,000 and $500 for over $10,000.

17. June 6, 2003AABE Seattle-Portland Chapter17 What Happens Next After submitting the application, expect correspondence from the IRS. Contact the IRS if you haven’t heard anything within 30 days. Be patient! For a smooth process, keep in mind the following important considerations.

18. June 6, 2003AABE Seattle-Portland Chapter18 Important Considerations Again, if you can pay someone, do it! But, if you’re a new chapter, it may not be cost effective to hire someone since you will need to spend a significant amount of your time with that person defining your activities and goals.

19. June 6, 2003AABE Seattle-Portland Chapter19 Important Consideration Dedicate about two members to the process. Develop a good relationship with your IRS reviewer. Check your mailbox regularly. Be mindful of slow mail from the IRS – your response time may be cut in half. Stick to response deadlines and call the IRS immediately if there will be a problem meeting a deadline. Stay on top of the IRS’ review.

20. June 6, 2003AABE Seattle-Portland Chapter20 Important Considerations Keep a log of any telephone conversations with the IRS. Keep a complete file of all correspondence to and from the IRS. Follow IRS directions exactly. All correspondence to the IRS has to be in writing to be officially recognized.

21. June 6, 2003AABE Seattle-Portland Chapter21 Important Considerations Do not expect the ability to e-mail or fax responses to the IRS, but don’t hesitate to ask whether you can. Remember any annual tax duties that my be necessary - Form 990 or an audit of your financial records. If you are a large chapter, you may consider professional tax advice. Ask for help! Call us and others for tips on how to get your 501(c)(3) recognition!

22. June 6, 2003AABE Seattle-Portland Chapter22 Contact Information Sonya Baskerville  slbaskerville@bpa.gov slbaskerville@bpa.gov  503-230-5904 Kirsten Watts  rkwatts@bpa.gov rkwatts@bpa.gov  206-220-6762  An electronic version of this presentation is available upon request and at www.aabe-sea-por.org