A not-for-profit charity requires specific steps to set up correctly.
Starting your own business is not an easy undertaking. There are many steps that must be completed in order to create your business and run it within the boundaries of the law. Not-for-profit organizations require more work, as you will need to prove to the government that your charity was not created with the intentions of personal gain. A not-for-profit charity is created for the sole purpose of helping those in need in some form or another. Specific steps must be taken to start a not-for-profit charity in Chicago.
Instructions
1. Organize a board of directors. The state of Illinois requires that all not-for-profit organizations have a board with at least three members. Not-for-profit organizations cannot be run by one person alone.
2. Create a business plan. This business plan must address what your organization intends to accomplish, where your organization will be located, what the goals are and where you intend to get your funding.
3. Name your organization. An organization name should be catchy, indicate that you are a not-for-profit and relate to your purpose. Check with the Illinois Secretary of State website to ensure that the name you have chosen has not already been taken. You can reserve the name for 90 days until you become incorporated by filling out the Application for Reservation of Name and paying $25.
4. File for incorporation status. Fill out the Articles of Incorporation form, using your organization's name; number of directors along with their names, addresses, and phone numbers; a registered agent; and the purpose of your organization. The registered agent is the person who will receive all of the charity's correspondence. This must be changed if this person leaves the organization. This form must be completed in black ink and submitted as two originals to the Illinois Secretary of State. A fee of $50 must also be included.
5. File form 1023 with the Internal Revenue Service. This form will grant your Chicago organization tax-exempt status. An explanation of your not-for-profit charity must be included with the form so that the IRS can evaluate whether or not your organization was created for exempt-worthy purposes. You must also include the Article for Incorporation. A payment based on your organization's projected revenue is due with the form. Organizations that project revenues over $10,000 must pay $850, while those whose projections are below that amount must pay $400.
6. Register with the Charitable Trust Bureau. All charitable organizations in Chicago must file the Registration Statement -- Form CO-1. New organizations must also file the Financial Information Form -- Form CO-2. Once an organization has been in existence for at least eight months, the Illinois Charitable Organization Annual Report -- Form AG990 -- must be filed each year. These forms must be submitted to the Illinois Attorney General's office.
7. Request an exempt number from the state of Illinois. In order to receive tax exemption for the state, an organization must submit its articles of incorporation received from the state, a copy of the by-laws of the organization, the exemption letter from the IRS, the most recent financial statement and information about the business including its purpose, any brochures that are distributed, and a list of activities and fundraisers.
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