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How to become a Non Profit One of the questions you will need to answer when opening a new rescue is whether or not to apply for non-profit status. There are pros and cons to applying for non-profit and to remaining a private rescue. There is no one right answer for everyone and every rescue. This article will look at both sides of the issue and let you make the best decision for your rescue and your circumstances. You should make your decision early in the process so that you can make organizational decisions, so your organization can get off to a good start. Please remember that it is easier to go from a private rescue to a non-profit than it is to go from a non-profit to a private rescue. However, either way changes are difficult and time consuming, so you should make your decision on status with the intention that it is the way your rescue will run for its duration. One of the first things to think about is paperwork. While a properly run rescue will have lots of paperwork even if it is private, one that is a registered non-profit has much more paperwork that must be filed within certain timelines. To fully comply with non-profit laws you must file paperwork with the IRS to be a recognized 501© 3 charity. Then most states also require that your organization file for non-profit status within the state before you can solicit donations within that state. There are several online businesses that will assist you with filing and obtaining your status. However, there are costs related to this. If you are a private rescue, you still need to file with the IRS as a business, but that is much easier and your financial records are not open to the public. (Please note: We always recommend that financial records be open to the public either way since this shows that you are fiscally responsible with donations, unless you are funding your own rescue completely.) Even if you are going to be a private rescue you should develop and write a mission statement. This tells why your organization exists and what you plan on doing. This isn’t as simple as “I want to rescue horses”, this statement is too broad. You should address what constitutes rescue. Do you plan on providing a sanctuary or are you planning on rehabilitating and adopting horses. What type of horses are you rescuing? Abuse and neglect are the most common, but you can add slaughter bound, off the race track or even circus animals. If you are filing as a non-profit you must file your articles of incorporation.
You must also file articles of organization. A sample of articles of organization can be found at
www.apps.irs.gov/charities/charitable/article/0,,id=122728,00.html.
The next thing to think about is money. It costs money to file as a non-profit with the IRS and with the state. It is often less expensive to operate as a private rescue. The cost depends on if you are doing your own paperwork, having a CPA assist you or are paying a business to file your paperwork. You should consult a CPA or full service bookkeeper to set up your financial books so that you have the ability to provide financial information on request. You may also want to consult an attorney to assist with preparation of legal forms and filing requirements. Do not forget that most states require filing (and paying a fee) with them as well. The return on the investment is that it is much easier to solicit donations as a non-profit and to receive grants and financial assistance with a non-profit status. However, there is no guarantee that having a non-profit status will provide enough support for your rescue. The IRS requires that all non-profit organizations allow access to financial records within a reasonable amount of time (no more than 30 days after receiving the request). A private rescue is not required to allow a full review of their records, but it is suggested that you have some sort of records available for donors. There are several websites available with detailed filing information and we suggest reviewing these sites if you are planning on getting your non-profit status. You may want to check out the following websites.
www.apps.irs.gov/charities/index.html
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