Some of the most important work in Florida is done by nonprofit corporations. For example, many hospitals and education institutions are nonprofit, as are many agencies which provide other important social services.
For Naples residents, their good idea about how to better serve their community may well turn in to the next organization that provides valuable help to people throughout South Florida.
However, before the organization can grow, it has to get legally organized, which is a process that even the best businesspeople could find both daunting and time-consuming.
Forming the nonprofit
The first step is to form the organization so that the state of Florida will recognize it as a separate entity. Once the nonprofit completes this process, it can conduct business in its own name, open checking accounts, own property, and the like.
Perhaps more importantly, the individual founders of the organization have protection from most lawsuits involving the business’s activities.
On a practical level, this means that the organizer should not have to worry about their own property should a business deal go awry or, say, someone has an accident on the nonprofit’s property. Moreover, forming the organization is necessary for getting the all-important tax exemption.
Tax exemption
Most nonprofits are going to need the benefit of so-called 501(c) status if they wish to operate. This designation, granted through the Internal Revenue Service, means the organization does not have to pay income taxes.
Moreover, people who donate to the organization will have the option to write off their gift on their individual tax returns. Tax-exempt status also may be the gateway to other legal benefits as well, including breaks on other taxes and fees imposed by the state of Florida.
Those seeking this designation have to meet rigorous legal requirements when applying through the IRS. Making a mistake in the application could tank the organization before it gets off the ground, as many nonprofits don’t have the ability to sustain a tax burden.
Likewise, once the application is granted, the nonprofit will have to manage itself in such a way as to continue to qualify for its tax-exempt status.
The desire to form a nonprofit is usually rooted in noble intentions. The practical of working of doing so is a difficult task, but people should not be discouraged.
With the proper legal assistance, they should be able to get their organization off the ground and start the work of achieving their goals.