Making A Plan
In most states the 501c3 application process is fairly straightforward with minimal deviations or additional forms required. However, there are sometimes additional measures that must be taken to ensure that your nonprofit is established legally. To make sure this happens, it is best to familiarize yourself with each of the documents that must be filed with the state before you can submit your 501c3 application to the IRS for approval. In California, this means filing your Articles of Incorporation, charity registration, and state tax exemption correctly. Knowing where each document goes and what department handles their filing can make all the difference. It can also get your nonprofit off the ground a lot sooner with little to no delays along the way.
Before you start filing paperwork with the state, make sure that you have Bylaws and a Conflict of Interest Policy drafted and secured. These documents are typically used as supporting documents to things like a charity registration, state tax exemption and 501c3 application. Once the Bylaws and Conflict of Interest Policy are good to go, you can move on to the documents that need to be filed before you submit your 501c3 application.
Incorporating With the State
To begin, the first order of business is incorporating your nonprofit organization. You cannot apply for anything else until your incorporation is approved and filed with the state. There is an incorporation form that the state of California provides, but you can also create your own Articles of Incorporation in a Microsoft Word document. If you are going with the Word document, you must include the name of your nonprofit, the purpose clause, the name of the individual incorporating the nonprofit, the street and mailing address, and the dissolution clause. The fee to file a nonprofit Articles of Incorporation in California is $30.00.
Should the state require additional information they will reach out to you following the approval of your incorporation with a form that is called SI-100. The SI-100 is a Statement of Information that will request deeper and more detailed information regarding your nonprofit. Please keep in mind that a SI-100 must be filed every other year, so that the state is kept updated on the status of your nonprofit (board member changes, address changes, etc).
Register Your Charity to Fundraise
After incorporation, you can now set your sights on the charity registration. The charity registration in California is filed at the Office of the Attorney General under the Registry of Charitable Trusts. The form itself is simply called ‘Initial Registration Form’, so there is nothing misleading about it. When submitting a charity registration to the state, you must also include supporting documents such as a copy of your filed Articles of Incorporation, a copy of your Bylaws, and a copy for your 1023 form (EZ or full form). It is also recommended to include any brochures or materials from your nonprofit organization as well. The filing fee of a charity registration in California is $25.00. Every year, a nonprofit must fill out the RRF-1 form, which is the ‘Annual Registration Renewal Report to Attorney General of California’. Basically, this form is a way to keep the Registry of Charitable Trusts knowledgeable on the financial activities of your nonprofit. It is not to be confused with the 990 annual report a nonprofit must file with the IRS. The RRF-1 is only filed with the state of California.
State Tax Exemption Last But Not Least
The state tax exemption form is a document that is filed with the state only AFTER a nonprofit receives their determination letter from the IRS. The document is form 3500A, or the ‘Submission of Exemption Request’. It is filed with the California Franchise Tax Board, namely their Exempt Organizations Unit. The California Franchise Tax Board collects corporate and personal income tax in the state and is a part of the California Government Operations Agency. In order for nonprofits to avoid these state taxes, they must apply by using the tax exemption form.
Summing It Up
Once you have filed all of the necessary documents at the California state level, your nonprofit is now ready to submit their 501c3 application to the IRS. Depending on the nature of the nonprofit itself, there may be additional steps within the 501c3 application. For example, if your nonprofit organization a church, a school, or a hospital you will need to fill out a special schedule. Nonprofit organizations that do not fall under special categories are free to file the 501c3 application without a schedule. In sending your 501c3 application to the IRS, a nonprofit should also send in their signed Bylaws, signed Conflict of Interest Policy, and a copy of their approved incorporation. The signatures on the Bylaws and Conflict of Interest Policy must be original and not digital or typed names.
If you are a nonprofit organization who wishes to incorporate and apply for 501c3 approval in California, do not hesitate to contact CharityNet USA. Our professionals will make sure all the necessary steps are taken to ensure that you are 100% 501c3 approved. We guarantee it! Call us today at: 407-857-9002.