Our team would like to become a nonprofit but we have no clue what to do besides the fact that we need to fill out the 501 3©. Any clues or Ideas on how to accomplish this
It’s a great help in fundraising to be a 501©(3), but there is paperwork and returns to be filed. It’s not a lot of work, but it needs to be done.
We found a local accountant to do this in exchange for their name on the robot. You can usually find a willing accountant or lawyer serving on your school board or someone on the board that will call in a favor for the team.
http://www.irs.gov/Charities-&-Non-Profits/Types-of-Tax-Exempt-Organizations
::rtm::
I really recommend reading through the stuff on teh IRS website.
My Team did this some years ago. It is really nice to have the financials separated from the school. Unfortunately this is not a do it yourself kind of thing. You need to find an accountant or somebody familiar with the process to guide you through it. You need to create a corporation with bylaws that fit the criteria. Then there is the IRS filing (by sure not to have patriot or tea party in the team name) Once you have the 501C status, it requires regular filings to maintain it. Your also have to track your money in such a way that if you are audited, you can justify your expenditures. All this really is not that hard compared to building a robot in 6 weeks, but is needs to be done correctly. The IRS is a lot worse than the GDC & they do lawyer their rules. 
So the best first step is to find a Mentor with the background to this. Parents, sponsors, PTA, the local Rotary club are some places to look for this person.
Team 316 formed a 501©(3) non-profit organization back in 2009, South Jersey Robotics, Inc. While I personally was not on the team then, I can get you in contact with our lead mentor who led us through the process if you have any questions. Send me a PM if you’re interested.
Greetings,
Are you affiliated with a school system? If so, I would check with your school if they have any rules regarding your own independent fundraising group. It would be bad news if you started this project and ran afoul of school regulations.
On a side note: have you looked into a booster club? This group acts like an independent fund raiser for your club but falls under the umbrella of the schools non profit status. Might be easier (and cheaper) to set up.
Just make sure your application does not include words like [Tea], [Coffee], [Peanut], [Patriot] etc… these key words may send your application into whirlpool…::rtm::
Disclaimer: NOT AfFILIATED TO ANY POLITICAL PARTY OR GROUP
Good luck! We have found that having 501©3 status and operating our expenses independently of the school is very efficient and definitely worth it. Be sure you have someone (an adult) willing to be treasurer, as you will want to have good record keeping and ensure that tax forms are filed on time, etc. Another tip: avoid using your school name in your corporation name (ie, “Superstar Robotics” vs “West High School Robotics”). We discovered after the fact that it is confusing to donors, parents, etc. to understand which organization they are donating to when the name is too closely related to the school name.
I am a mentor on team 4499 and this was our rookie year. About 1 year ago this month I started the application for a non-profit. We wanted to start one because we have 4 different schools represented on our team. It was a daunting task. I spent a few months filling out the application and writing up the required documentation. I hired a lawyer to review my application before submitting it. Beware, it can take 6-12 months for the application to be reviewed. I have a lot of information on this, so if you would like to email me please feel free, [email protected]. Even though it was a lot of work it was worth it! We have several sponsors that enjoy supporting more than one high school program.
http://www.firstnemo.org/resources.htm
Look under Team Organization and Management.
I know that we (team 3502) have looked into this because it would make our fundraising/spending a lot easier. For one thing, because we are affiliated with a school, they want to know everything and anything that we buy. They even almost insisted on a proposed “budget” with every nut and bolt. We eventually said, if you want all this ahead of build season, let’s just put the entire AM, VEX, and McMaster inventory on the list, because there’s no way to know before the challenge;) .
Back to the topic, the school also has some issue with us separating from them, and that is making the process a lot harder. A professional would really help.
Good Luck!
Also, never use your name on any documents when filing unless explicitly stated. You are filing as the [non-profit name]. This is a costly mistake to fix and opens you up to personal liability. Ask us how we know :rolleyes:
The exact how-tos and timeline differs widely by state. Basically, though, you first need to form a corporation of some sort. Then you apply for non-profit status for your corporation.
You also need to decide why and if you really need to do this. Two main reasons - if you are not affiliated with a non-profit it helps a lot with fund-raising, or if you are a school based group and want to handle your finances independently.
In 2006 we gave a presentation on this exact topic at the robotics conferences at Championships. You can get a copy of our slides at the link below (scroll down to near the end of the page). This presentation is old and the links may not still be accurate, but it gives an overview of the process.
Similar presentations have been given since then - check the NEMO site included in one of the earlier notes.
Good luck!
I’d also suggest looking into your local 4H organization. They have partnered with FIRST the past few years and provide many of the benefits of being a non-profit but with a lot less initial set up by your team. There are a number of teams that are 4H clubs. 4H is run mostly at a state level so the details on starting up will differ a little for you than it did us.
We did this a few years ago. While I was not too involved in the process, I do know that it has a number of benefits.
We went through a community foundation, which handles all of the paperwork and bookkeeping, etc. If there is something like that near you, I would highly recommend it. It really takes all the stress out of the equation and lets you keep focus on robots and community-building (and sleep, if you’re in to that).
Here is the link to the Greater Morgantown Community Trust (http://www.ycfwv.org/index.php). While you obviously would not be able to go through them, this gives you an idea about what kind of organization I’m talking about.
Also, we have a number of resources and experienced business people with our program, and we love to help! I can get you in contact with other people from MARS that are a lot more knowledgable than I am. Just PM me if you are interested!
My team became a non profit in 2003, we split from the school back then and now have kids from 5 different counties on our team. We do not have an accountant, we have a “Board” which consist of our head mentor, our head scout, our head program mentor, and our head design/building mentor, they only meet once a week, we do on average 40 demo’s a year to keep the team/organization running, the real problem with it is, that for the chairmans award the judges thing our organization does everything and our team does nothing lol, thats the only complaint, if you want help though I can get you in touch with the Head mentor for my team and he would be happy to help, he has made sure this team never went under so to speak.
When you ask people to join your board of directors, don’t just look at the team leadership. Invite members of the community or sponsors to be part of what you are doing.
There will be some applications for grants that will ask for a listing of who is on your board. Having a diverse board is a plus.
Team 2220 - Blue Twilight did a session at the Double Duluth Regional this year and had some great info on setting up a 501c3.
You really don’t have to have an accountant. You do have to file an annual return with the IRS. If you are ever audited (admittedly not very likely) you need proper documentation. Without it you can lose the 501c status & face fines. That is why it is important to have some one that understands the process guide you.
Has any team just filed their IRS form 1023 this year or last year?
Which box did you check in section X, question 5? (these are part of the “tests” to determine what kind of public charity you are.)
Did anyone select “D” (which requires the schedule D, which describes you as an entity that “supports” another non-profit entity)?
Did anyone select g, h, or i when filling out this form?
By the way, now I see what those “Tea Party” groups were complaining about; but the truth is, everyone gets these nit-picky questions.