Whether you are buying toys for underprivileged children, or helping preserve your favorite environmental treasure, for many people creating their own nonprofit and charity is a life-long dream. Formally creating a nonprofit charity allows one to use a structured organization that can take advantage of state and federal tax exempt status. With this tax exempt status a nonprofit is in a much better position to effectively use the funds and assets it has at its disposal and make a more effective difference in all of our communities.

Forming a nonprofit however is far from easy. In order to gain tax exempt status under 501(c)3 there are a number of legal hurdles to overcome. For example, IRS form 1023 (a form one is required to fill out to gain nonprofit tax exempt status) is approximately thirty pages and it is estimated by the IRS to take approximately eleven hours to complete. This form is only one of many that the IRS requires before granting tax exempt status to an organization; along with the IRS 1023 form, one is required to submit adopted bylaws of the nonprofit. These bylaws for a nonprofit in turn need to include certain policies such as a conflict of interest policy and certain procedures the organization must follow when directors of the organization elect to receive compensation.

These requirements have stemmed from past abuses of the tax exempt status provided by the IRS. Rather than helping the communities we live in, many people have used their nonprofits as a vehicle to make more money. The end result is that forming your own nonprofit or charity can actually be a rather byzantine and difficult process. The San Francisco Bay Area Law Firm of Jones & Devoy has experience in forming nonprofit and public benefit corporations and can help you make sure that you are able to successfully navigate the legal landscape necessary to help your nonprofit become a reality and help serve our communities.