The Business of the Heart, The Heart of Business: Two Sides of a Nonprofit Organization by Kris Celeste

KRIS CELESTE

The Business of the HEART TWO SIDES OF A NONPROFIT ORGANIZATION

KRIS CELESTE

THE BUSINESS OF THE HEART: TWO SIDES OF A NONPROFIT ORGANIZATION PRETZELMAN PRINTINGROUP 10476 ARMSTRONG STREET FAIRFAX, VA 22030 PH 703-934-1450 FA 703-934-1451 PRETZELMAN PRINTINGROUP: IN THIS PLACE, THERE IS ALWAYS A WAY COPYRIGHT © 2010 BY KRIS CELESTE PROJECT EDITOR: TIM INGLE CONTENT EDITORS: TIM AND JEN SOEHNLIN KAREN BEACH BOOK DESIGNER KRIS CELESTE NOTICE OF RIGHTS ALL RIGHTS RESERVED. NO PART OF THIS BOOK MAY BE REPRODUCED OR TRANSMITTED IN ANY FORM BY ANY MEANS, ELECTRONIC, MECHANICAL, PHOTOCOPYING, RECORDING OR OTHERWISE, WITHOUT PRIOR WRITTEN PERMISSION OF THE PUBLISHER. FOR INFORMATION ON GETTING PERMISSION FOR REPRINTS AND EXCERPTS, CONTACT KRIS@KRISCELESTE.COM. 050510 PRINTED AND BOUND IN THE UNITED STATES OF AMERICA

ACKNOWLEDGEMENTS

iii

My first thank you goes to my Heavenly Father for strength, wisdom and guidance. Special thanks to my girlfriend, Casey, and to my family for their support of my passion for graphic design and nonprofit organizations. To my professors Anne Kerns and Karen Beach. Thanks to my friends: Tim Ingle, for his invaluable input and advice; Tim and Jenn Soehnlin for their content editing. Thanks also to the organizations who took their time to respond to my many emails.

PREFACE

This book is designed for individuals who are ready to embark on the journey of creating a nonprofit organization. It will focus on the heart of this type of organization; â&#x20AC;&#x201D;its mission.

The purpose of this book is to provide information for those who want to start a nonprofit organization. Armed with this positive awareness and knowledge of its mission, the nonprofit organization will increase its likelihood of achieving its goal. â&#x20AC;&#x201D;Kris Celeste

CONTENTS

vii

SECTION ONE

DISCOVER YOUR CALLING

SECTION TWO

SET YOUR GOALS

SECTION THREE

BRING INDIVIDUALS TOGETHER

SECTION FOUR

DREAM BIG, PLAN BIGGER

viii

INTRODUCTION

A nonprofit business starts from the heart. It is driven by the passion to meet a goal that is greater than the desire to make money. The foundation of any nonprofit is its mission. The key to a successful nonprofit is for everyone involved, from the board members to the volunteers, to know the heart of the organization and for them to believe in it. The mission of the nonprofit organization is the foundation for everything it does.

Section One

Discover Your Calling

Have you ever been so passionate about something that it makes you happy to put all your energy and time into it? When you are passionate about something you find a way to help others with it and make a difference in the world. The following is something you can do to solidify your calling and your passion.

[ ] Make a List of What You Do Daily

On a sheet of paper, write down everything that you do on a daily basis. Even the things that may seem insignificant should be written down. You will be surprised at the things you do on a daily basis and may discover that the things you are passionate about you are already doing.

[ ] Choose The Things You Love To Do

Now it’s time to modify your list. Think carefully through each item and decide if it is something that you truly love to do. You can revise the list as many times as you like, just make sure that you stay true to your passions.

[ ] Get Feedback

After you think you know what you love to do, show your list to someone who is close to you. They could be family members, friends or even coworkers but make sure it is someone who knows you well. They will be able to help you review your list and show you things you may have missed and to reinforce the things you may have already known. The goal is to be honest with yourself and to really understand what drives you.

“Ask others what you care about... those who know you best.” —Tim Ingle Intellectric Production 5

Look over your list — hopefully you will find that what you love to do is something you can use to impact the world in a positive way. Keep this list with you for encouragement and reminder of where your heart is. It will help to keep you focused on your purpose and goals. Ask others that you care about and those who know you best to help keep you focused on your calling. You will need this because just running a business can easily distract you from the goal and purpose of the nonprofit.

When you find yourself busy and overwhelmed with administrative work, it can take a toll on you. There will be obstacles that seem so big that they wear you down. Remember what you love to do and remember your purpose, as it will help encourage you and give you strength.

Section Two

Set Your Goals

Discovering your calling is the first step in starting a nonprofit. Once you’ve become focused on your passion there is very little that can stop you. The next step is to keep a level head, and to set goals to keep you focused on things you love to do. As an example you may have found out, from your list of things you love to do, that you enjoy taking care of people. Your close friends and family believe that you were meant to be in the medical field. You’re excited and overjoyed because after thinking it through carefully, this is exactly the role you see for yourself. Imagine there’s a specific area of the medical field that you want to focus on, like providing healthcare to those who can’t afford it. You want to create an organization that provides aid to people in low-income housing. Now you have to set small achievable goals to conquer this big goal. In this particular situation, your small goals may be to pursue a nursing degree or taking a placement exam to be able to enter a medical program. Set these small milestones for yourself and take them on one day at a time. Stay focused on that big goal because that is what drives you.

“Goals allow you to control the direction of change in your favor” —Brian Tracy Author & Business Strategist 9

If you are new to your career, you may find yourself speeding through a job that is not for you. You may have discovered what drives you and it seems that it has nothing to do with where you currently are. Your initial reaction may be discouragement because you feel like you are off course from your goals. You may even feel the desire to just quit your job and do what you are passionate about. Before you get ahead of yourself and get yourself farther off course relax and take a deep breath. Patience is a big part of approaching any kind of issue successfully. Now set small goals in an environment that will help you focus — whether it is by yourself or in the company of close friends or family members. If you find that art is your passion, get back into it. Take some classes in the evening or on the weekends. If you want to obtain a degree, understand that it is going to take some time. You may not always have the resources you need to achieve your goals in traditional ways, so look for creative and cost effective ways of reaching them. Do not let anything stop you.

After taking these steps and meeting some small goals, you will be surprised to see how close it brings you to achieving your dreams.

Section Three

Bring Individuals Together

As the saying goes, “two heads are better than one.” Being around individuals who have the same passions and goals as you is a great way to build momentum for your organization. You can never have too much encouragement from those who share your passions. There are many interest groups out there that you can join to find those who share your passion. Many times because of their large size, it is hard to build meaningful connections. As an alternative, you may find it is better to simply start your own interest group. This is a way to find the core leaders for your nonprofit organization. How can you go about starting a group? The answer is networking. It is a word you have heard many times in your workplace or at your school. The dictionary describes networking as “the cultivation of productive relationships for employment or business”. The art of networking takes many forms. For example; t

word of mouth

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If you have a Facebook account, Twitter account, or even a blog you may already be networking. By sharing your passions through these tools you are giving others a chance to become passionate about the things that drive you.

“It’s always good to know you’ve got connections” —Tailor Your Skills 13

Facebook is a great way to connect with individuals. By creating a group, you can reach people anywhere by inviting friends to be part of your group; by hosting events, advertising these events in your group; and by creating ads within Facebook promoting your group.

Below is an example of a Facebook group for iAM Media Ministry. This group is using Facebook as a networking tool to bring attention to its goals.

Section Four

Dream Big, Plan Bigger

We all have dreams of accomplishing something big. We sometimes sell ourselves short by limiting our goals based on our dreams. There is so much more you can achieve beyond your dreams. An important thing to do is plan bigger â&#x20AC;&#x201D; to plan the impossible. If your dream is to become a cartoonist, then set your goals to become a director of an animation studio. If your dream is to be a nurse, then plan your course to become a doctor. Who is to say what you cannot do? If you aim for something bigger than your dreams you will always go farther than you expected. Planning big things does not automatically mean you will achieve all those goals. There is a lot of hard work, planning and guidance that goes along with it. But having those big plans will help you keep you focused whenever you find yourself losing hope. Donâ&#x20AC;&#x2122;t be afraid to fail. Some things will happen that are just out of your control so be prepared to roll with the punches. Your dreams and aspirations are the driving force of your nonprofit. Make sure to continue fueling that fire.

COLOPHON

This book was published as a requirement for a Final Thesis course (AVT-498) with Professor Ann Kerns of George Mason University. The project was to write, design, and produce a book on any topic upon permission from the professor. This book is written for business men and women with a passion to meet a goal beyond personal profit. The approach to designing this book is based on being reader-friendly. The purpose of the design is to give the reader freedom to decide which of the two views he or she wants to know more about. Whether starting with the business side of the book or the mission side of the book, the goal of understanding of how to start a nonprofit is reached at the end of the book. The tone of the â&#x20AC;&#x153;heartâ&#x20AC;? side of the book has a personal feel to help the reader bring out his or her passion and goals for the organization. The orange color reflects a symbolic light that bursts through when an individual discovers his or her calling.

Kris Celeste was introduced to computer graphics in a middle school class and continued to take it as an elective year after year in high school. He entered George Mason University as a Civil Engineer major, but after a year his passion for graphic design drove him to switch his major to the Art and Visual Technology field. In his third year at Mason, he entered a design internship program with the Mason Student Media.

ABOUT THE AUTHOR

Immediately following the internship with Student Media he was hired by the Mason Media Lab, a George Mason University design studio. Starting as a junior graphic designer he gradually advanced to become a senior graphic designer and increased his responsibilities. During his tenure at the Mason Media Lab he worked with animators, developers, producers, and directors which expanded his knowledge of design across all types of media â&#x20AC;&#x201D; print, web, motion, and broadcast. For the past 3 years Kris has been a practicing freelance graphic designer on his spare time. In these past 3 years he has experienced not only the art of design but also its business aspect. His objective is to continue to strengthen his knowledge and skills in all aspects of graphic and multimedia design.

! Kris Celeste was introduced to computer graphics in a middle school class and continued to take it as an elective year after year in high school. He entered George Mason University as a Civil Engineer major, but after a year his passion for graphic design drove him to switch his major to the Art and Visual Technology field. In his third year at Mason, he entered a design internship program with the Mason Student Media.

ABOUT THE AUTHOR

COLOPHON

This book was published as a requirement for a Final Thesis course (AVT-498) with Professor Ann Kerns of George Mason University. The project was to write, design, and produce a book on any topic upon permission from the professor. This book is written for business men and women with a passion to meet a goal beyond personal profit. The approach to designing this book is based on being reader-friendly. The purpose of the design is to give the reader freedom to decide which of the two views he or she wants to know more about. Whether starting with the business side of the book or the mission side of the book, the goal of being prepared is still met by the end of the reading. The tone of the â&#x20AC;&#x153;businessâ&#x20AC;? side of the book is formal and professional. The blue color reflects a symbolic strength in business.

Hiring the right employees and volunteers is a tough and long process that, in the long run, is very beneficial. You do not want just anyone on your staff. You want employees who know the heart of your nonprofit organization — those who are willing to give their best to your team and work to achieve its goals . The first thing to think about when hiring the right employees and volunteers is writing clear and understandable job descriptions. Every paid and voluntary position within your organization should have a complete written description of responsibilities. This will not only keep things organized, but will also keep your employees and staff accountable. The job title is also important when writing job descriptions. Following should be a summary of the job, the responsibilities and duties that lie within the job title and any requirements (skills, experience, etc.) needed to perform the job. Volunteers are just as important as the staff members in your organization. You, your Board of Directors, and your employees are the heart and soul of your organization, while the volunteers are your organization’s hands and feet. In order to recruit the right volunteers you should put priority in developing a successful volunteer program. Effective volunteer programs consist of quality recruiting, training sessions, and volunteer assignments that support the growth of your nonprofit organization.

TIP:

Surround yourself with excellent people. 29

The hiring of your board members takes a lot of thought and important decision making. In order to manage such an invaluable task in the best way possible, you should have a Board Development Committee. This committee will have the responsibilities of recruiting and keeping quality board members. The search of quality board members, staff and employees is ongoing. Recruitment should be made from a variety of organizations as well as from within. Volunteers who have been actively assisting in the organization’s programs should be highly considered as board members. The characteristics of a board member in consideration should be based on a variety of factors

such as age, residence, experience, and skills. Even former clients who understand the service your organization provides are viable candidates for the Board.

Section Four

Hiring the Right Employees & Volunteers !

Nonprofit organizations are funded in many different ways. Two main sources are fundraising and grants. Fundraising is a great way for the community to get involved with your organization. A lot of time and energy goes into raising funds for your organization; the best way to get started is to create a fundraising plan. This project would be well suited for your Planning Committee. Some key components that should be included in your fundraising plan are to: t

establish the roles and responsibilities of the board and staff members

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ask for investments from individuals and companies

Grants are becoming harder to receive from government agencies. So the quality of your grant proposals is important. Grants are written after the organization is informed that there are available funds from a government agency. This notice is called Request for Proposal (RFP).

TIP:

PLAN, PLAN, PLAN and in case you forget, PLAN! 25

To be constantly informed about available funds it is important to go to local libraries or websites for lists of foundations who offer them. Knowing that hundreds of organizations are using this strategy of going to the library and finding information on websites, it would be to your organizationâ&#x20AC;&#x2122;s advantage to prepare for the RFPs even before you are notified about the available funds. Even though each foundation has a different format for applying for their available funds, the

information that they request from you is often the same. The questions asked are similar to the information you provide in your business plan: t

What kind of services and/or products will you be providing for your customers or clients?

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Be mindful that time is very valuable â&#x20AC;&#x201D; you do not want to spend it writing grants which are not going to benefit the growth of your organization.

Section Three

Fundraising & Grants !

A successful nonprofit organization has a strong and efficient Board of Directors. These Board of Directors have the important task of hiring the staff, establishing the policies and guidelines for the organization and making sure that the staff is applying these policies and guidelines throughout the organization. The responsibilities and function of the Board of Directors for the organization are found in its by-laws, mentioned in the previous section Research and Plan. These by-laws need to be up-to-date, upheld, and should meet the needs of the organization in order for the Board of Directors to be efficient. The first thing to think about is the number of board members you will need for your organization. There is no limit to the number of members required for any given organization because it depends on what the organization needs to function effectively and how the members will be able to provide that. For example, if the role of the board members is minimal, then a small number of board members would be all that is needed. For an organization that is more complex in its approach on fundraising, functions and committees, then a larger number of board members is required. There needs to be a proper procedure in obtaining strong board members for your organization. Setting a minimum and maximum number of board members for your organization is a good start. Understand what is the most important position needed and then start from there. As the organization grows, the number of board members will grow as well. This minimum and maximum number is usually set within your by-laws.

“Having set terms is a good way to assure board continuity.”

fixed terms of office procedure “assures board continuity”.

—Michael A. Sand How to Manage An Effective Nonprofit

When the term of each board member comes to an end, you may choose to extend the terms for those who are effective in your organization or to remove them from the board if they are unproductive. It is

The length of the term for each board member should also be included in the organization’s by-laws. The common term length for board members is three years with a third of the members being elected annually. This

important to continuously re-evaluate each of your board members and to ensure their effectiveness in the growth and production of the organization.

Section two

Creating the Board !

Form 1023

+29 pgs 17

EXEMPTION FORM Form 1023 is another important tax exemption form that you will need to fill out in order to be recognized under Section 501(c)(3) of the Internal Revenue Code. On the IRS website there is a downloadable PDF that includes instructions for Form 1023. Online, go to: irs.com

Form 990/990-EZ Form

Short Form Return of Organization Exempt From Income Tax

990-EZ

OMB No. 1545-1150

2009

Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except black lung benefit trust or private foundation) Sponsoring organizations of donor advised funds and controlling organizations as defined in section 512(b)(13) must file Form 990. All other organizations with gross receipts less than $500,000 and total assets less than $1,250,000 at the end of the year may use this form. ! The organization may have to use a copy of this return to satisfy state reporting requirements.

Open to Public Inspection

Department of the Treasury Internal Revenue Service

A For the 2009 calendar year, or tax year beginning B

Check if applicable: Address change Name change Initial return Terminated Amended return Application pending

Please use IRS label or print or type. See Specific Instructions.

, 2009, and ending

Number and street (or P.O. box, if mail is not delivered to street address)

Room/suite

City or town, state or country, and ZIP + 4

501(c) (

)

(insert no.)

E Telephone number

F Group Exemption Number !

● Section 501(c)(3) organizations and 4947(a)(1) nonexempt charitable trusts must attach a completed Schedule A (Form 990 or 990-EZ). I Website: ! J Tax-exempt status (check only one) —

!"#$" D Employer identification number

C Name of organization

4947(a)(1) or

527

G Accounting Method: Other (specify) !

Cash

Accrual

H Check ! if the organization is not required to attach Schedule B (Form 990, 990-EZ, or 990-PF).

if the organization is not a section 509(a)(3) supporting organization and its gross receipts are normally not more than $25,000. A K Check ! Form 990-EZ or Form 990 return is not required, but if the organization chooses to file a return, be sure to file a complete return. ! L Add lines 5b, 6b, and 7b, to line 9 to determine gross receipts; if $500,000 or more, file Form 990 instead of Form 990-EZ $

Net Assets

Expenses

Revenue

Part I

Revenue, Expenses, and Changes in Net Assets or Fund Balances (See the instructions for Part I.)

1 2 3 4 5a b c 6 a

Contributions, gifts, grants, and similar amounts received . . . . . . . . . . . . . Program service revenue including government fees and contracts . . . . . . . . . Membership dues and assessments . . . . . . . . . . . . . . . . . . . . Investment income . . . . . . . . . . . . . . . . . . . . . . . . . 5a Gross amount from sale of assets other than inventory . . . . 5b Less: cost or other basis and sales expenses . . . . . . . . Gain or (loss) from sale of assets other than inventory (Subtract line 5b from line 5a) . . . . Special events and activities (complete applicable parts of Schedule G). If any amount is from gaming, check here ! Gross revenue (not including $ of contributions 6a reported on line 1) . . . . . . . . . . . . . . . . . b Less: direct expenses other than fundraising expenses 6b . . . . c Net income or (loss) from special events and activities (Subtract line 6b from line 6a) . . . . 7a Gross sales of inventory, less returns and allowances . . . . . 7a b Less: cost of goods sold 7b . . . . . . . . . . . . . . c Gross profit or (loss) from sales of inventory (Subtract line 7b from line 7a) . . . . . . . 8 Other revenue (describe ! ) 9 Total revenue. Add lines 1, 2, 3, 4, 5c, 6c, 7c, and 8 . . . . . . . . . . . . . ! 10 Grants and similar amounts paid (attach schedule) . . . . . . . . . . . . . . . 11 Benefits paid to or for members . . . . . . . . . . . . . . . . . . . . . 12 Salaries, other compensation, and employee benefits . . . . . . . . . . . . . . 13 Professional fees and other payments to independent contractors . . . . . . . . . . 14 Occupancy, rent, utilities, and maintenance . . . . . . . . . . . . . . . . . 15 Printing, publications, postage, and shipping . . . . . . . . . . . . . . . . . 16 Other expenses (describe ! ) 17 Total expenses. Add lines 10 through 16 . . . . . . . . . . . . . . . . . ! 18 Excess or (deficit) for the year (Subtract line 17 from line 9) . . . . . . . . . . . . 19 Net assets or fund balances at beginning of year (from line 27, column (A)) (must agree with end-of-year figure reported on prior year’s return) . . . . . . . . . . . . . . .

1 2 3 4

7c 8 9 10 11 12 13 14 15 16 17 18

19 20 Other changes in net assets or fund balances (attach explanation) . . . . . . . . . . Net assets or fund balances at end of year. Combine lines 18 through 20 . . . . . . ! 21 Part II Balance Sheets. If Total assets on line 25, column (B) are $1,250,000 or more, file Form 990 instead of Form 990-EZ. (A) Beginning of year (B) End of year (See the instructions for Part II.) 22 22 Cash, savings, and investments . . . . . . . . . . . . . . . . . 23 23 Land and buildings . . . . . . . . . . . . . . . . . . . . . . 24 24 Other assets (describe ! ) 25 Total assets . . . . . . . . . . . . . . . . . . . . . . . . 25 26 Total liabilities (describe ! 26 ) Net assets or fund balances (line 27 of column (B) must agree with line 21) . . 27 27 20 21

For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions.

Cat. No. 10642I

Form

990-EZ

(2009)

+3 pgs 15

CHARITIES FORM All tax-exempt organizations with a total income of $25,000 or more are required to submit this form annually. These give the IRS an in-depth overview of a charity which could, but may not, include income information, expenses, assets and liabilities. On the IRS website there is a downloadable PDF that has instructions for Form 990. Online, go to: irs.com

By-Laws BY-LAWS OF [NONPROFIT NAME], A NOT-FOR-PROFIT CORPORATION ARTICLE I ORGANIZATION This article will include the name of the organization and any rules and regulations that are applied for the name and brand of the organization. ARTICLE II PURPOSES This article will include the purposes of which the organization has been organized.

ARTICLE III MEMBERSHIP This article will include the description in which the organizationâ&#x20AC;&#x2122;s membership is open to. ARTICLE IV MEETINGS This article will include the location, date and time in which the annual meetings will take place. It states the required attendance of the meeting for it to become an official meeting or if it will have to adjourn because of a low percentage of attendance. The description of how the notice of the meetings will be given to the members will be in this section as well. ARTICLE V VOTING This article will include the regulations and rules for voting in a meeting. ARTICLE VI ORDER OF BUSINESS 1. Roll Call. 2. Reading of the Minutes of the preceding meeting. 3. Reports of Committees. 4. Reports of Officers. 5. Old and Unfinished Business. 6. New Business. 13

7. Adjournments. [example of order of business] ARTICLE VII BOARD OF DIRECTORS This article will include the roles and responsibilities of the Board of Directors within the nonprofit organzation. ARTICLE VIII OFFICERS This article will include the roles and responsibilities of the officers within the nonprofit organization. ARTICLE IX SALARIES This article will include the compensation of any and all the employees in which the Board of Directors may determine to be necessary for the conduct of the business of the organization. ARTICLE X COMMITTEES This article will include the roles and responsibilities of the committees that are appointed by the Board of Directors. ARTICLE XI DUES This article will include the annual dues of the organization and the date in which it is due. ARTICLE XII AMENDMENTS This article will include the rules of altering, amending, repealing or adding to these By-Laws.

Articles of Organization

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BUSINESS LICENSE/CERTIFICATES You will not necessarily need a business license to be able to successfully run your business, but it is important to check your stateâ&#x20AC;&#x2122;s licensing requirements for certain types of businesses with your local government offices. Each state has different licensing requirements. For nonprofit organizations the tax-exempt form is your primary business license. Opposite is an example of Virginiaâ&#x20AC;&#x2122;s Sales and Use Tax Certificate of Exemption Form. Online, go to: tax.virginia.gov

Form SS-4

Form

SS-4

(Rev. January 2010)

Type or print clearly.

Department of the Treasury Internal Revenue Service

Application for Employer Identification Number (For use by employers, corporations, partnerships, trusts, estates, churches, government agencies, Indian tribal entities, certain individuals, and others.) !

See separate instructions for each line.

OMB No. 1545-0003 EIN

Keep a copy for your records.

Legal name of entity (or individual) for whom the EIN is being requested

Trade name of business (if different from name on line 1)

Executor, administrator, trustee, “care of” name

Mailing address (room, apt., suite no. and street, or P.O. box)

Street address (if different) (Do not enter a P.O. box.)

City, state, and ZIP code (if foreign, see instructions)

County and state where principal business is located

Name of responsible party

SSN, ITIN, or EIN

If 8a is “Yes,” enter the number of ! LLC members

Is this application for a limited liability company (LLC) (or a foreign equivalent)?

If 8a is “Yes,” was the LLC organized in the United States? Type of entity (check only one box). Caution. If 8a is “Yes,” see the instructions for the correct box to check.

Yes

Partnership

Plan administrator (TIN)

Corporation (enter form number to be filed)

Estate (SSN of decedent)

Sole proprietor (SSN)

Yes

Trust (TIN of grantor)

Personal service corporation

National Guard

State/local government

Church or church-controlled organization

Farmers’ cooperative

Federal government/military

Other nonprofit organization (specify) ! Other (specify) ! If a corporation, name the state or foreign country (if applicable) where incorporated Reason for applying (check only one box) Started new business (specify type)

State

Indian tribal governments/enterprises REMIC Group Exemption Number (GEN) if any ! Foreign country

Banking purpose (specify purpose)

Changed type of organization (specify new type)

Purchased going business Hired employees (Check the box and see line 13.)

11 13

15 16

Created a trust (specify type)

Compliance with IRS withholding regulations Created a pension plan (specify type) ! Other (specify) ! Date business started or acquired (month, day, year). See instructions. 12 Closing month of accounting year 14

If you expect your employment tax liability to be $1,000 or less in a full calendar year and want to file Form 944 annually instead of Forms 941 quarterly, check here. If no employees expected, skip line 14. (Your employment tax liability generally will be $1,000 or less if you expect to pay $4,000 or less in total Agricultural Household Other wages.) If you do not check this box, you must file Form 941 for every quarter. First date wages or annuities were paid (month, day, year). Note. If applicant is a withholding agent, enter date income will first be paid to ! nonresident alien (month, day, year) Highest number of employees expected in the next 12 months (enter -0- if none).

Check one box that best describes the principal activity of your business.

Wholesale-agent/broker Health care & social assistance Accommodation & food service Retail Rental & leasing Transportation & warehousing Wholesale-other Finance & insurance Real estate Manufacturing Other (specify) Indicate principal line of merchandise sold, specific construction work done, products produced, or services provided. Construction

17 18

Yes

Has the applicant entity shown on line 1 ever applied for and received an EIN? If “Yes,” write previous EIN here !

Complete this section only if you want to authorize the named individual to receive the entity’s EIN and answer questions about the completion of this form.

Third Party Designee

Designee’s name

Designee’s telephone number (include area code)

Address and ZIP code

Designee’s fax number (include area code)

( (

Under penalties of perjury, I declare that I have examined this application, and to the best of my knowledge and belief, it is true, correct, and complete. Name and title (type or print clearly)

)

Applicant’s telephone number (include area code)

(

)

Applicant’s fax number (include area code) Signature

Date

For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.

(

Cat. No. 16055N

) Form

SS-4

(Rev. 1-2010)

EIN (EMPLOYER IDENTIFICATION NUMBER) When starting a business you will need to apply for an Employer Identification Number or EIN. This is used for setting up a business bank account, applying for business licenses, and filing for tax returns specifically for your business. It is easy to apply for one. You can do it by phone, fax, mail, or online but keep in mind that it will take up to 2 weeks for your EIN to be officially in the IRSâ&#x20AC;&#x2122; records. Online, go to: irs.com Phone: Business & Specialty Tax Line at 800.829.4933 (recommended)

ATTENTION FROM THE IRS FOR TAX EXEMPT/NONPROFITS:

At the beginning of the online EIN application process, you will be asked to check a box that best describes your legal structure. The legal structure for all Tax Exempt/Non Profit Organizations is found under the 7th option, View Additional Types, Including Tax Exempt and Governmental Agencies. Nonprofit organizations include corporations, trusts, limited liability companies, and unincorporated associations that qualify for tax-exempt status under Internal Revenue Code (IRC) 501(a) as described in Publication 557, Tax-Exempt Status for Your Organization (PDF). www.irs.gov/businesses/small/article/0,,id=102767,00.html

Just as a successful architect uses blueprints, a successful businessman or woman needs to have a business plan. You have your ideas and your mission for your nonprofit organization in place, but there needs to be a structure. The first thing to think about when laying out the business plan is what services does your nonprofit organization provides? What needs would it fill for your customers or clients? Who is your target audience? Is it a more general group or a more focused audience? This is very important when planning your advertising. When dealing with advertising consider how you will reach your customers or clients. Will it be primarily by internet, television ads, focused emails to certain businesses, or even just by word-of-mouth? This will be much easier to answer if you know who your audience is. And the most important question is where will you get your financial resources? This type of question will be answered in the “Fundraising & Grants” section of the book. To give you an overall look at what you should prepare for when creating your business plan, consider the following:

Describe the Business

Put together the overall mission of your business and what kind of services and/or products you will be providing for your customers or clients.

Financial Data

Decide on your financial goals for the next year. Don’t be hesitant to plan your goals for the next 10 years.

TIP:

Do some research on who your business competitors are in your location, it will give you a good idea on how you should approach your business plan. 5

Documents

Supporting documents are very important to have within your business plan. Documents such as tax papers, financial documents, and your resumé are all basic requirements.

These are only three of the many areas that you and your group will need to evaluate. Understand that planning takes time, so a lot of patience and a good formulated plan are your most valuable tools.

The following pages in this section are most, if not all, the forms and documents you will need to fill out in order for your organization to be recognized as one. Links and/or directions to locations where you will be able to find them.

Section One

Research & Plan

INTRODUCTION

There are some distinct dif ferences between for-profit and nonprofit organizations. A for-profit business strives to make money; for nonprofits, the goal is for something of greater magnitude than profit. A nonprofit is able to apply for a tax exemption, but with this comes a more complicated responsibility for managing the funds. The organization is also followed very closely by the Internal Revenue Service (IRS) to make sure it is following the appropriate rules and regulations. Preparation of the business structure of the nonprofit organization and its formation is key to its establishment and more importantly, meeting its goals.

CONTENTS

vii

SECTION ONE

RESEARCH & PLAN

SECTION TWO

CREATING THE BOARD

SECTION THREE

FUNDRAISING & GRANTS

SECTION FOUR

HIRING THE RIGHT EMPLOYEES & VOLUNTEERS

viii

PREFACE

This book is designed for individuals who are ready to embark on the journey of creating a nonprofit organization. It will focus on the structure of this type of organization. The purpose of this book is to provide information for those who want to start a nonprofit organization. Armed with this positive awareness and preparation of its foundation, the nonprofit organization will increase its likelihood of achieving its goal.

â&#x20AC;&#x201D;Kris Celeste

ACKNOWLEDGEMENTS

iii

THE HEART OF BUSINESS: TWO SIDES OF A NONPROFIT ORGANIZATION PRETZELMAN PRINTINGROUP 10476 ARMSTRONG STREET FAIRFAX, VA 22030 PH 703-934-1450 FA 703-934-1451 PRETZELMAN PRINTINGROUP: IN THIS PLACE, THERE IS ALWAYS A WAY COPYRIGHT © 2010 BY KRIS CELESTE PROJECT EDITOR: TIM INGLE CONTENT EDITORS: TIM AND JEN SOEHNLIN KAREN BEACH BOOK DESIGNER KRIS CELESTE NOTICE OF RIGHTS ALL RIGHTS RESERVED. NO PART OF THIS BOOK MAY BE REPRODUCED OR TRANSMITTED IN ANY FORM BY ANY MEANS, ELECTRONIC, MECHANICAL, PHOTOCOPYING, RECORDING OR OTHERWISE, WITHOUT PRIOR WRITTEN PERMISSION OF THE PUBLISHER. FOR INFORMATION ON GETTING PERMISSION FOR REPRINTS AND EXCERPTS, CONTACT KRIS@KRISCELESTE.COM. 050510 PRINTED AND BOUND IN THE UNITED STATES OF AMERICA

The Heart of BUSINESS TWO SIDES OF A NONPROFIT ORGANIZATION

KRIS CELESTE

The Heart of BUSINESS TWO SIDES OF A NONPROFIT ORGANIZATION