Not For Profit Organization

Hello Morgan,

The process can be fairly difficult, but there are a number of useful resources online that can help you out. Below is a summary of the steps involved for forming a nonprofit in California, taken from the Citizens Media Law Project (link attached below). Walk through the steps below, including the additional details in the full post. Once you've gotten the California corporate entity formed, then you can work on getting 501(c)(3) status (link attached below).

Usually the 501(c)(3) status will take several months to prepare and to hear back from the IRS. So if you plan to raise funds in the meantime, you may consider approaching another 501(c)(3) (perhaps another animal-related organization) who can possibly act as a fiscal sponsor.

Good luck! It can be a long and tedious process. But when you are preparing your 501(c)(3) application (or receive correspondence from the IRS after filing), be sure to call the IRS and walk through things on the telephone. It can be much simpler that trying to guess or figure it out on your own.

Best of luck.
- Eric Koester

1. Choose a business name and check for availability
2. Recruit and/or appoint directors
3. Incorporate your Nonprofit Organization
a. Prepare and file articles of incorporation with the Secretary of State
b. Create the bylaws
c. Prepare and file a Statement of Information with the Secretary of State
d. Hold an organizational meeting
e. Create a Records Book
4. Get your Employer Identification Number
a. Federal
b. State
5. Register with the Office of the Attorney General
6. Apply for tax exemptions
a. Federal
b. State
c. Local

Starting a nonprofit is relatively easy following the mechanical steps. The Citizens Media Law Project provides some references which you may find helpful. If you decide to use the Nolo Press book by Anthonhy Mancuso, make sure you get the one specifically for California nonprofits.

Deciding on whether you should start a new nonprofit is a more difficult question. Do you have a plan to create a sustainable organization, including a plan to attract funds in a very competitive market and difficult economy? Do you have individuals who share your vision and commitment who are willing to serve on the governing body of the organization? Are you aware of your ongoing reponsibilities (e.g., oversight over the organization's finances and charitable activities; regular reporting to the IRS, Franchise Tax Board, Attorney General, and Secretary of State; providing the proper form of "receipts" to donors according to the amount and type of donation; making available to the public certain documents; dealing with conflicts of interest that may result, for example, if a board member is also compensated by the nonprofit)?

As a former director of the San Francisco SPCA's medical rehabilitation division and an attorney whose practice focuses only on nonprofits and tax-exempt organizations, I am very grateful for animal rescue groups that do wonderful work. At the same time, I don't like to see resources wasted by forming an unsustainable nonprofit that results in more administrative work and headaches and fewer animals saved. The key is to prepare in advance of starting the nonprofit and to make sound decisions. Are you duplicating services in your area or are you offering something unique? Will you be able to attract additional funds to help the animals in your area or will you be competing for existing monies already going to groups with a similar mission? Do your homework and consider the tough questions first. Then, if you've decided that your group will offer something in addition to what's out there now and will be sustainable over the short- and long-term, create and run the best rescue group you can. Good luck!

I agree with Gene with regards to the Nolo Press book. It should not be your definitive resource in setting up a nonprofit, but it is a great place to start. It gives you the initial guidance you need in simple terms.

From that point on, you need to figure out what your exact strategy is, what your realistic projections are for the coming year with regards to fundrasing and activities, and then you need to sit down with your core management group (who may end up being your board of directors) and decide how you want to proceed. It is often advisable to sit down with an attorney at the initial brainstorming sessions, to help you navigate through what you can and can't do.

Although I do this type of work regularly, I would highly recommend that you give Gene Takagi a call. I've come to know him professionally in the past year and he is probably the best person to help you with your specific project.