Starting a Section 501(c)(3) nonprofit can be quite an adventure! What legal steps are required? While the details may vary widely, the concrete steps may be best summarized as follows: (1) form a nonprofit corporation, consistent with Section 501(c)(3) requirements; (2) apply to the IRS for recognition of tax-exempt status; and (3) understand and comply with applicable legal requirements for both state nonprofit status and federal tax-exempt classification. Vision is essential, and so is taking the right steps with the end goal in mind. The following guidance sets forth a roadmap for taking these steps, including numerous references to other Wagenmaker & Oberly blog articles providing additional guidance. Note that these steps apply equally well for other types of tax-exempt nonprofits, such as social clubs and trade associations, except with respect to tax deductibility of charitable contributions and other privileges accorded only to Section 501(c)(3) organizations.
When a conflict develops involving a nonprofit, its leaders, or its programs, one of the first calls is usually to the nonprofit’s lawyer. But when the time comes to call the nonprofit’s attorney, two important questions arise: (1) Who should properly make that call, and (2) On whose behalf is the call being made? These two questions highlight a more foundational and general question: Who or what is the attorney’s client in a conflict involving third parties or internal disputes?
Churches, synagogues, mosques, temples, and other religious houses of worship in Illinois are typically incorporated, and for good reason. Religious houses of worship may be incorporated in Illinois under two different statutes, and it is up to them to decide which one. Why does it matter?