In order to obtain non-profit grants, you must become a non-profit, 501c3 charitable organization or possess another eligible non-profit status with the Internal Revenue Services (IRS). Instructions for becoming a non-profit charitable organization can be found on the IRS website. Unfortunately, many people find the federal instructions too complicated and choose to hire a professional to help them. Most professional lawyers and accountants charge $3,000 or more for their services to help you set up your nonprofit and it typically takes nine to twelve months for approval.
USGG offers webinars on how to start a nonprofit organization and a variety of products, training, and services to make the process of applying for nonprofit status to get nonprofit grants fast and easy. Better yet, most USGG clients get their non-profit charitable status from the IRS in one to two months and can begin applying for nonprofit grants within three months of incorporation. Watch our website Events Page for upcoming webinars and training events on nonprofit incorporation and nonprofit grants.
If you choose to set up a nonprofit organization yourself with instructions from the IRS, there are basically a few simple steps to follow. These steps will enable you to be eligible for non-profit grants. Once you’ve become a non-profit organization, you’ll be eligible for nonprofit grants for projects that are related to faith-based work, operations, program development, and building renovations, among other things.
Contact your Secretary of State to reserve the name of your organization. When creating a name for your organization, be creative and think of one that will describe what it is you do. Making a strong impression with the name is important and a good name can help you win more non-profit grants.
Go to the Secretary of State website (in your state) and obtain forms to submit Articles of Incorporation. The purposes of the Articles of Incorporation are (1) to be recognized in your state as an official non-profit organization and (2) fulfill a requirement by the IRS to be recognized as a non-profit, 501(c)(3) organization. Both are important for the future of your non-profit since they allow you to accept donations and apply for grants. The Articles of Incorporation must include the purpose of the corporation, any clauses that are required by your state law and at least the following two provisions required by the IRS:
Purpose: Said organization is organized for charitable, religious, educational, and scientific purposes, including for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code (or corresponding section of any future federal tax code).
Dissolution: Upon dissolution of the Corporation, The Corporation shall, after paying or making provision for the payment of the debts and obligation of the corporation, distribute the remaining assets and property (after necessary expenses thereof) to such organizations as shall qualify as an exempt organization or organizations under section 501(c)(3) of the Internal Revenue Code of 1954, as named. Any such assets not disposed of shall be disposed by the Circuit Court of the county in which the principal office of the Corporation is located, exclusively for such purposes or to such organizations as said Court shall determine, which are organized for such purposes as qualify them as exempt organizations.
Be sure to keep a hard copy of the Articles of Incorporation for your records exactly as they are submitted to your state agency. Normally the state does not return this document when they send certification to you, but it is required to be included with your 1023 application to the IRS. The purpose of your organization is as important as your name in helping you get nonprofit grants. Be clear, concise and to the point, but be broad enough to make your organization eligible for as many non-profit grants as possible. Sample Articles of Incorporation and Sample Provisions for Articles of Incorporation are included in our training events.
After you are assured that your name has been registered and reserved, complete and file an SS-4 form with the IRS. The form and instructions can be downloaded from the IRS website www.irs.gov. In the box that allows you to search for forms, type in SS-4. A sample SS-4 form is included in our training events and it has been completed with fictitious names to allow you to use as a model. The purpose of this form is to obtain your Employer Identification Number (EIN) so that the IRS can track your reports and your Form 1023 tax-exempt application. The EIN number is required for all nonprofit grants.
You can call, fax, or mail in the form to obtain your EIN number. Instructions for doing so are contained in the IRS Instructions for filing SS-4 forms.
After you receive certification from your state that your organization has been incorporated and you receive your EIN number, you need to complete and file Form 1023 before you apply for nonprofit grants. Read the instructions for filing the form at the IRS website www.irs.gov. Please read and re-read the instructions carefully to eliminate mistakes. Unfortunately, mistakes can cost you months of wasted time in securing your non-profit status.
A sample completed Form 1023 is included in our training events for extra guidance. Keep in mind, every organization is different and your application may require different answers than those on the sample. When doing your application keep it as simple as possible. The sample we provide is simple and applies to how to complete Form 1023 for basic non-profit organizations – not hospitals, universities, schools, senior centers, or national associations.