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Three Steps to Forming a Charity or 501(c)(3) Organization

There are three general steps to forming a charity. If these steps have not occurred, your organization may not be tax-exempt and your donors may not be entitled to tax benefits. Below is a brief summary of the steps. 

1. Form the charity as an entity under state law.

  • Filing articles, draft bylaws and create other organizational documents. An experienced attorney can help you with what to include in these documents.

2. Apply for charitable tax-exempt status with the IRS.

  • Generally, a charity must apply for 501(c)(3) status, not only to ensure that any donations your organization takes in will be tax-free but also that your donors will receive a tax deduction.

 3. Register with your state attorney general to solicit charitable donations

  • Most states require that a charity register in order to solicit donations from residents of that state. Contact a Foster Swift attorney if you have questions about the registration process.

In the following short video, Foster Swift business attorney John W. Mashni gives a more in-depth look at the steps organizations can take when forming a charity in accordance with state and federal laws.

This video is for general information purposes and IS NOT LEGAL ADVICE. If you seek legal counsel or need help in determining how this information applies to a specific situation, contact a Foster Swift business & tax attorney before taking any action.

Categories: Nonprofit, Tax-Exempt Organizations


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