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Starting A Non Profit In Philadelphia? Follow These Steps


Wanting to start up a non-profit is a noble endeavor, and you should be proud that you want to set up an organization to help people. Setting up a non-profit is very similar to starting any other business, but there are some key differences to be aware of. If you are looking to set up a non-profit in Philly, here are the steps you will need to take.

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Understanding Non-Profits

While nonprofits are very similar to corporations, they have some benefits that lessen the burden on their owners. For example, the owners of nonprofits have certain levels of liability protection. Officers and directors are not liable personally for any of the organization's debts or liabilities.

Nonprofits are also eligible for certain public and private grants which for-profit corporations are not. They also enjoy lower postage rates, are tax-exempt and command a high level of credibility and respect, among other benefits. In exchange, nonprofits can obviously not operate with the intention of making a profit, and there are other restrictions too. Understand exactly what running a non-profit will require of you and whether you are truly willing and able to take this major step.

Establishing The Non-Profit

There are some general steps to take when starting a non-profit. You will have to file Federal Form 1023 and Form REV-72 in the state of Pennsylvania to gain tax-exempt status. In addition, you will need to file a Docketing Statement (DSCB:15-134A) as well as the bylaws, which are outlined in greater detail below. You will need to choose a name for the non-profit, which can't have been taken by any other business or non-profit in Pennsylvania. An online search can tell you if your name is available. Pennsylvania requires that you advertise the creation of the non-profit in two newspapers that see general circulation and that you list at least one Director when forming a nonprofit. The Director must be at least eighteen years of age but does not need to be a resident of Pennsylvania.

Have Bylaws

Nonprofits need bylaws that determine the procedures and rules your non-profit follows. These bylaws must comply with Pennsylvania law. There are a number of methods to drafting suitable bylaws for your organization. You can look at bylaws of similar organizations to see how they are set up, look at examples online or have a lawyer draft them. Have a meeting with your Board of Directors to agree on what goes into the bylaws so everyone with a stake in the organization has their say.

Have The Right Software

The right software can make running your nonprofit much easier. Accounting software in particular is an important tool to possess. There are a number of options for accounting software for nonprofits specifically that can help your new non-profit manage its finances. Fortunately, many of these options are cheap or low cost to better match your financial capability. Other useful software programs can include donor management software, public policy engagement software, and software that offers fundraising, organizing and advocacy tools all in one.

Be Sure To Keep Records

Nonprofits are required to keep certain records regarding their operations in order to comply with tax laws. You will have to prove that your organization operates as a non-profit, which means keeping a careful record of all income and expenses. This is why having a solid accounting program, as outlined above, is so important. It will help your non-profit keep its finances compliant so that you have no issues when it comes time to file taxes.

When setting up a non-profit, it is usually best to consult an attorney familiar with establishing non-profits in the state of Pennsylvania. They will be able to give you advice on your specific situation as well as answer questions you may have. Research the process thoroughly before you begin, as well as be sure running this non-profit is what you want to do. By doing so, you can set up your non-profit for success.

Brett Clawson is a business owner and entrepreneur with over 10 years of experience. In his free time, he enjoys writing and learning about emerging business trends.

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