501c3 Organizations - The Board of Directors

An enormous part of establishing a 501c3 tax exempt non-profit organization is dealing with who will run it. No one does it alone, and in most states a board of directors is required to run an organization smoothly. Forming a board of directors can appear simple - just choose a couple of friends and relatives and there you go!

For the good of the organization's future and your chances of qualifying for 501c3 tax exempt status, this is not a good idea. It is essential to understand how you can build a board of directors that cares about your goals.

Look at Your Mission

All great companies, whether or not they're for or not for profit, have mission statements in which they spell out what the organization exists for and how they plan to accomplish it. Shorter than a business plan, a mission statement for a non-profit ought to be concise and to-the-point, and forming a board of directors ought to circle around what the mission statement says. Only by going back to your mission can board members who care about that mission are chosen, which is in the best interest of the organization and its future.

Research and Recruit

One thing numerous non-profits have to think about when choosing a board of directors is that the research and recruitment required to choose suitable candidates may be extensive. Search for well-known and well-publicized local members of the community which have the time and the passion to pursue a non-profit together with your mission statement. It is essential to discover people who can get things carried out but are also passionate about your purpose. These people may not necessarily be individuals you already know or even like personally, but they'll be greatest for the organization.

Do the Paperwork

Once the board members have been decided and are on board using the non-profit project, it is essential to get it in writing. An attorney should help you work out contracts or agreements with every board member and then write up bylaws with the whole board. Filing for 501c3 tax exempt status for your non-profit requires proof of each board member's representation as well as proof of their salary agreement to ensure not too much of your profit is going to salaries. One of the reasons it is important to choose individuals that are not close to you is that the IRS investigates heavily signs for conflicts of interest or likelihood of fraud when granting 501c3 status.

Nonprofit Legal Center offers suggestions and resources for you to discover more about how to start a 501c3 and 501c3 nonprofit institutions.