Frances Phillips

Article / Updated 07-29-2022

The first thing to do for your nonprofit after you complete your incorporation is to apply to the IRS for an Employer Identification Number, or EIN. Even if you don't plan to hire employees anytime soon, you need this number for your application for tax exemption and for all your state and federal reports. The EIN will be attached to your nonprofit forever. Getting an EIN is easy and free. All you have to do is submit IRS Form SS-4. You can either download and print the form from the IRS website or complete the online application. You can even apply by telephone. As IRS forms go, this one is simple and straightforward and only one page long. If you apply by phone or complete the online application, download Form SS-4 beforehand to get an idea of the questions you'll have to answer. Choose only one method to apply for your EIN. Don't send in IRS Form SS-4 and apply by telephone. You may end up with two EINs, a confusing situation for everyone. The name of the applicant isn't your name; it's the name of your new organization. As with the incorporation papers, you need to identify an individual as the principal officer and include that person's Social Security number on the form. Here are some of the other items you need to fill out, line by line: Line 9: If your organization is a church or church-controlled organization, check that box in section 9a. If it's not, check the "Other Nonprofit Organization" box. Specify what sort of nonprofit organization you are. In most cases, "charitable" is sufficient. In section 9b, fill in the state where your organization is incorporated. Line 10: Most likely, your reason for applying for an EIN in line 10 is "started a new business." Line 11: In line 11, the date on your incorporation papers is the date the business was started. Line 12: This line asks for the closing month of your organization's accounting (fiscal) year. Lines 13 and 14: These lines relate to the number of employees you intend to hire and your expected payroll tax liabilities over the coming 12 months. You can enter "0" and "No" if your organization doesn't plan to hire staff in the year ahead. If you do intend to hire people for whom you'll have to pay payroll taxes, you need to check IRS withholding tables and estimate the amount of payroll taxes that will be due to the IRS. Line 16: This line asks you to check the box that describes your organization's principal activity. You can check "Other" here, but try to be a little more specific when describing your activities in the blank space. You may say "Charitable — Arts," for example. The IRS estimates that you'll receive your EIN in four to five weeks if you apply by mail. You'll receive your EIN immediately if you submit the online application. If you want to apply for an EIN by telephone, the person named as the principal officer on the SS-4 Form must call the IRS Business and Specialty Tax Line at (800) 829-4933. Be sure that you've completed the SS-4 Form before you make the call. An IRS worker takes your information over the phone and assigns an EIN to your organization. You must fax or mail the form to the appropriate IRS office within 24 hours of making the call.

Article / Updated 10-20-2021

Although online donations still represent a modest percentage (13 percent as of 2020) of total giving to nonprofit organizations, that percentage is growing, and your nonprofit's website is an important fundraising tool. People give online because it's fast and convenient. Websites are particularly strong at reaching donors who know your organization well, trust it, and like the convenience of giving online. They can also attract donors who contribute on impulse. Charities that respond to emergencies have succeeded at raising money online when a disaster strikes. How can you make your website do its fundraising job well? Here are ten tips: Evaluate your website's content If potential donors are meeting your organization for the first time through its website, you want them to quickly understand the essence of who you are and what you do. Ask yourself, what do they see when they arrive on your home page? Your purpose and mission should be clearly and succinctly stated. Don't use your full mission statement: instead, present your purpose in a phrase or short sentence. Pay attention to your website's look Don't present a cluttered layout or dense text. Remember that it's a visual medium. (You can search online to see examples of the previous year's best nonprofit websites for some great models.) Invite your website's users to get involved Include sections labeled, "What You Can Do," "Join Us," or "Make Change." In all online fundraising, using the word "you" is the most powerful way to get your readers' attention. When you have that attention, give that reader some choices. Making a donation should be a clear and prominent option, but it shouldn't be the only way for someone to help you. Show the outcomes Online donors want to know about results. They want to know your work is effective and that their contribution makes a concrete difference. You can show them the stack of school supplies their $50 gift could buy for refugee children or the well you could dig in a drought-parched part of the world for just $300. Keep it simple Make it, oh, so easy to find your "donate" option and follow the steps to make an online donation. Services such as Just Giving and Network for Good can help you collect and acknowledge your online donations. Be honest and clear about how you're spending your donors' money Earn their trust with your candor. And always provide an easy-to-use "contact us" feature so they can submit questions and comments. Ask directly Be clear about what actions you want your web visitors to take. Don't be shy about requesting donations and calling on them to take action. Use keywords to describe the work you do You want to make those words prominent in your headings and introductory copy. Remember that your online readers will include people who have come across you by searching online for information about the subject of your work, as well as those who are looking for your nonprofit by name. You want to be certain that those people "searching by subject" will find you. Experiment with investing in search engine marketing Google Grants and its paid-search service AdWords is a good place to begin. Pay attention to what people are saying about your organization Set up Google alerts to see when and how your organization is mentioned in blogs, the media, and other online contexts (and participate in the conversation whenever possible). Also, check to see how your organization is ranked on nonprofit rating websites such as Charity Navigator and BBB Wise Giving Alliance, and how your clients and volunteers rate you on Yelp.com or GreatNonprofits.org.

Cheat Sheet / Updated 09-23-2021

Creating and running a nonprofit organization can be a gratifying and worthwhile endeavor. Success depends on developing a good idea that meets a real need, testing that idea, planning (and planning some more), and inspiring others. Though the work is demanding, it’s also deeply rewarding.

Article / Updated 12-27-2016

Every nonprofit organization needs to raise money. Whether applying for grants, searching for individual donors, or throwing fundraising events, you're always going to be looking for new ways to bring in funds. These tips can help your nonprofit successfully raise money: Set clear, reasonable, yet ambitious fundraising goals based on a clear assessment of your organization's likeliest supporters. Don't plan to depend on one grant, one event, one donor, or one approach. Balance your resources among multiple sources. It costs money to raise money, and some approaches cost more than others. Make a fundraising budget. Remember that individual donors represent the largest total source for private contributions. Write a strong case statement for your organization, telling its story in terms of how it benefits the people (or trees or salamanders) it's designed to serve. Ask. If you don't ask for a contribution, you won't get one. Make it easy to respond to your request. That includes providing self-addressed envelopes and an easy-to-use "donate now" feature on your website. Begin by asking for support among those closest to your nonprofit — its board, volunteers, constituents, and staff. Work outward from that core group, building a network of supporters through your first donors' personal connections and those benefitting from your nonprofit's work. Include some fun in your fundraising. Special events can win friends and inspire new supporters. The most important step in grantwriting is research. Examine each potential grant maker's interests, focus, limitations, and policies. The key to a compelling grant proposal is demonstrating the needs of the constituents your nonprofit wants to serve and presenting a clear, detailed plan for addressing those needs. Acknowledge the work of others in your field and represent your organization's distinct mission and approach. Organizations need capital — annual funds, buildings, endowments, cash reserves — to offer strong programs. Fundraising for capital campaigns and fund drives involves both large and small contributions. A standard campaign depends on one lead gift totaling at least 10 percent to 20 percent of the total money to be raised, and on 80 percent of the money being raised from 15 percent to 20 percent of the donors. If "ask" is the number one rule of fundraising, "thank" is number two. Acknowledge your donors' support and work to deepen their involvement in your organization.

Article / Updated 12-27-2016

Every nonprofit organization is overseen by a group of people called the board of directors. These generous board members agree to accept responsibility for making sure the nonprofit organization remains true to its mission and purpose. A board's primary governance responsibility is fiduciary, or to uphold the public trust, meaning: Paying close attention to what's going on and making decisions based on good information Putting the welfare of the organization above other interests when making decisions Acting in accordance with the nonprofit's mission and goals Active governance as a board member involves: Reviewing the mission statement and goals of the organization on a regular basis Participating in planning If the organization has paid staff, hiring the executive director and reviewing his or her job performance Reviewing the organization's budget and keeping well informed of its financial situation Reviewing the performance of the organization's programs Raising money for the organization Setting, evaluating, and — if necessary — revising policies Serving as an ambassador for the organization — making more people aware of its work Recruiting additional board members and volunteers

Article / Updated 12-27-2016

Before you can begin operating as the kind of nonprofit organization that receives tax-deductible gifts from donors, you need to secure 501(c)(3) nonprofit status in the eyes of the Internal Revenue Service (IRS) and your state. Take the following steps to gain that nonprofit status for your organization: Choose a name for your nonprofit. (While you're at it, select and reserve a web domain name.) Form your incorporating board of directors (often only three people are needed). Write articles of incorporation including a statement of your purpose and submit them to the appropriate office in your state government with the required fee. Wait for a response from your state. (In some states you can expedite the process by paying a surcharge.) Obtain a Federal Employer Identification Number, submitting IRS Form SS-4. Develop organizational bylaws — the rules by which you will operate. Hold your first board meeting and prepare meeting minutes. Review IRS Publications 557 (Tax-Exempt Status for Your Organization). Carefully read the instructions for completing and filing IRS Form 1023 or Form 1023-EZ if you're applying to become a 501(c)(3) tax exempt organization (preferably within 15 months of the date of incorporation). After filing your form, sit back and relax. Celebrate when your letter of determination arrives! Register as a charity within your state. While you're at it, check your state's laws: Some require you to apply for a separate (in addition to federal) tax exemption.

Article / Updated 03-26-2016

Unless you're presiding over a very large and formal board meeting of your nonprofit organization, you can probably get by with following just a handful of parliamentary rules. In the 19th century, U.S. Army officer Henry Robert saw the need for a uniform set of rules to be used to manage the give and take of meetings. He published the first edition of Robert's Rules of Order in 1876. The book is now in its 11th edition and is one of the best-known books in the United States (and is available on the web). For the purposes of most nonprofit board meetings, only a few basic rules are needed: Calling a meeting to order simply announces the formal beginning of the meeting and the point at which minutes will begin to be recorded. If you have a gavel, this is the time to use it. Making a motion is when a member suggests a policy or action that the board will vote on. A motion must be seconded by another member of the group. If discussion is needed to consider a motion, it should come after the motion has been moved and seconded. Calling the question is an announcement made by the board president. It signals the end of discussion. It's now time to vote yes or no on the motion. To be strict, a motion is needed to adjourn the meeting. Most nonprofit boards don't follow this practice and adjourn the meeting when they reach the end of the agenda. If you do find yourself leading a large and formal meeting in which you want to follow Robert's Rules of Order to the letter, you should hire a professional parliamentarian to help keep the meeting in order.

Article / Updated 03-26-2016

Online giving still lags behind contributions that are made in response to in-person requests or traditional fundraising letters, but it increases every year. You'll want your organization to benefit from this growing trend by including e-mail letters among your fundraising tools. Good e-mailed letters are short and sweet. They need to draw in their readers right away, with strong subject lines and opening sentences. Here are some tips you can use to succeed with your e-mailed fundraising letters: The identity of the person who sent the e-mail matters to the reader. Make sure your supporters will recognize the sender's name. Write an appealing subject line. The recipient of your letter will choose to open your message based on this 40- to 50-character phrase. In many ways, it's the most important part of your e-mail. Write it, think about it, and test it on others. If you don't get a strong response, write another subject line and resend the appeal in a few days. Write a strong opening. The first few lines of your letter are extremely important. Many of your readers scan their e-mail through a preview pane where all they see is those first few sentences. Write clearly, directly, and dramatically at the opening of your letter. Write the way you speak. Use short, brisk sentences. Don't be afraid to ask the reader a question in the body of your letter; questions can add to a conversational tone. Use short paragraphs. Draw attention to the benefits of your organization's work or to its varied programs by using subheads and bullets. (However, avoid turning your letter into a long, bulleted list.) Engage the reader. Use (short) human interest stories or testimonials from people who have benefited from your organization's work. Incorporate a graphic element. Place photos, a video, or an illustration in the upper right-hand corner. At the same time, don't overload your e-mail with graphics, which can slow down its delivery and cause it to be caught in spam filters. Ask for the contribution. Don't bury the request deep in the letter. Be clear about your expectations. Be specific. Each donor's gift makes a difference to your nonprofit. Tell them how. Make donating simple. Make it easy for your reader to click through from your letter to the "Donate now" feature on your website. While you're at it, include two or three opportunities for your reader to click through. Let donors control their frequency of contact with you. You want to stay in touch with an e-newsletter and future solicitation letters, but be courteous and give them choices about how you'll stay in touch. While you're at it, give clear and courteous unsubscribe instructions for how to get off of your e-mail list. Inject human contact into your e-fundraising if at all possible. After someone has made a contribution, make a brief call of thanks. Better yet, invite her to take a behind-the-scenes tour or witness your nonprofit's work in person.

Article / Updated 03-26-2016

There's no shortage of information about starting and running a nonprofit organization. If you want to talk to someone about a specific problem, turn to one of the listed organizations. Chances are, someone has already encountered (and hopefully solved) whatever issue you've run into. You can also find helpful pointers on websites and in books. Share the web links or recommend the books to others involved in the operation of your nonprofit. The more you know, the more successful you'll be. This list doesn't include every book, magazine, and website that may be of interest to nonprofit folks, but these resources point you in the right direction. Organizations You'll find the nonprofit organizations (and two government agencies) listed here to be helpful for providing guidance and information on everything from the history of nonprofits in America to raising money to support your programs. Alliance for Nonprofit Management American Society of Association Executives The Aspen Institute: Program on Philanthropy and Social Innovation Association of Fundraising Professionals BBB Wise Giving Alliance for Charities BoardSource Center for Civil Society Studies at the Johns Hopkins Institute for Policy Studies The Center on Philanthropy at Indiana University CDFI Coalition of Community Development Financial Institutions The Council on Foundations The Foundation Center Giving Institute (serving fundraising professionals and publishing the annual Giving USA) U.S. Government Printing Office (for regulatory guides) The Grantsmanship Center Independent Sector Leader to Leader Institute National Council of Nonprofits, which includes links to state associations of nonprofits Nonprofit Finance Fund Web resources These websites have detailed information on a variety of nonprofit topics, including preparing your application for tax exemption for the Internal Revenue Service, finding possible grant sources, and keeping up with the latest news about nonprofits. Keep in mind that website addresses change frequently, so if a page isn't accessible through the listed link, use your favorite search engine to track down the new address. About.com's charitable organizations page Affordable or free databases: Blackbaud.com, eBase.org, GiftWorks, and Salesforce.com Blue Avocado (a free electronic newsletter about nonprofits) The Catalog of Federal Domestic Assistance (a comprehensive directory about federal funding opportunities) Charity Channel (an online network of nonprofit professionals) CharityVillage (a Canadian center for nonprofits) Chronicle of Philanthropy CompassPoint Templates (a nonprofit training and management organization offers some free budgeting templates on its website) Access to the Congressional Record Grants.gov (source of federal government grant applications and information) The Foundation Directory Online (available for a monthly fee or for free at the Foundation Center's libraries and affiliates) Free Management Library (for nonprofits and for-profits) Fundraising Forum The Giving Institute Grassroots Fundraising Journal (published by the Grassroots Institute for Fundraising Training) GreatNonprofits (consumer-generated reviews of nonprofits) Guerrilla Marketing (Registration is required to access most material on this site.) GuideStar Hands On Network (an international network connecting volunteers to causes) Idealware (articles and webinars about software for nonprofits) Independent Sector (annual assessment of the value of volunteer time by state) Internal Revenue Service (for information about nonprofits) W.K. Kellogg Foundation Evaluation Handbook (downloadable PDF) National Center for Charitable Statistics (contains a clearinghouse of data about the nonprofit sector in the United States) Network for Good (online donation tools) Nonprofit Academic Centers Council (academic programs for nonprofit managers) Nonprofit Accounting Basics The Nonprofit FAQ (indexed answers to questions about nonprofits) The Nonprofit Quarterly The Nonprofit Times NTENConnect (a free monthly newsletter about the technology needs of nonprofits) Opportunity Knocks (nonprofit job listings and an annual salary survey) Philanthropy News Digest (grant announcements and recent studies and research supported by foundations) Ready.gov (federal site for emergency preparedness) Social Media for Nonprofits State registration forms for soliciting donations TechSoup (resource for discounted technology products for nonprofits) TechSoup Global (an international association of individuals and nonprofits using technology for social change) U.S. Census Bureau (a source for population data) U.S. Department of Labor (for employee benefits information) Volunteer Match Web surveying Books and print materials You'll find these books and other publications helpful as you discover the nonprofit sector. You'll also find books to help you through the incorporation process and guides to writing grant proposals. America's Nonprofit Sector, A Primer by Lester Salamon (Foundation Center) The Board Member's Book: Making a Difference in Vol. Organizations by Brian O'Connell (Foundation Center) E-Mail Marketing For Dummies by John Arnold (Wiley) Facebook For Dummies by Carolyn Abram (Wiley) Fiscal Sponsorship: 6 Ways to Do It Right by Gregory L. Colvin (Study Center Press) The Foundation Center's Guide to Proposal Writing by Jane C. Geever (The Foundation Center) Foundation Fundamentals (The Foundation Center) (a guide to researching funding sources) The Grantseekers Guide to Winning Proposals, edited by Judith B. Margolin and Elan K. DiMaio, 2008 (The Foundation Center) (contains examples of successful grant proposals) The Foundation Directory, Directory Part 2, and Supplement (The Foundation Center) Foundations Today: Foundation Yearbook (The Foundation Center) Fundraising Online: Using the Internet to Raise Serious Money for Your Nonprofit Organization by Gary M. Grobman and Gary B. Grant (White Hat Communications) Fundraising When Money is Tight: A Strategic and Practical Guide to Surviving Tough Times and Thriving in the Future by Mal Warwick (Jossey-Bass) Getting Funded: The Complete Guide to Writing Grant Proposals by Mary S. Hall and Susan Howlett (Continuing Education Press) Grant Proposal Makeover: Transform Your Request from No to Yes by Cheryl A. Clarke and Susan P. Fox (Wiley) Grant Writing For Dummies by Dr. Beverly A. Browning, MPA, DBA (Wiley) The Handbook of Nonprofit Governance by BoardSource (Jossey-Bass) How to Form a Nonprofit Corporation by Anthony Mancuso (Nolo) How to Write Successful Fundraising Appeals by Mal Warwick with Eric Overman (Jossey-Bass) Human Resources Kit For Dummies by Max Messmer (Wiley) The Idealware Field Guide to Software for Nonprofits by Laura S. Quinn, Chris Bernard, Andrea Berry, Elizabeth Pope, Kyle Henri Andrei, and Tyler M. Cummins (Idealware) The Jossey-Bass Handbook of Nonprofit Leadership and Management by David O. Renz and Robert D. Herman (Jossey-Bass) Managing a Nonprofit Organization: Updated Twenty-First Century Edition by Thomas Wolf (Free Press) Managing Nonprofit Organizations by Mary Tschirhart and Wolfgang Bielefeld (Jossey-Bass) Marketing Kit For Dummies by Alexander Hiam (Wiley) Models of Proposal Planning and Writing by Lynn E. Miner and Jeremy T. Miner (Praeger) National Directory of Corporate Giving (The Foundation Center) The Nonprofit Board Answer Book: A Practical Guide for Board Members and Chief Executives by BoardSource (Jossey-Bass) Nonprofit Boards: Roles, Responsibilities, and Performance by Diane Duca (Wiley) Nonprofit Bookkeeping & Accounting For Dummies by Sharon Farris (Wiley) The Nonprofit Sector: A Research Handbook by Walter W. Powell and Richard Steinberg (Yale University Press) The Nonprofit Strategy Revolution by David La Piana (Fieldstone Alliance) Philanthropy Annual (The Foundation Center) (a look back at the prior year in philanthropy) Public Relations For Dummies by Eric Yaverbaum, Ilise Benun, and Richard Kishenbaum (Wiley) The Public Relations Handbook for Nonprofits: A Comprehensive and Practical Guide by Art Feinglass (Jossey-Bass) Securing Your Organization's Future: A Complete Guide to Fundraising Strategies by Michael Seltzer (The Foundation Center) Small Business Marketing Kit For Dummies by Barbara Findlay Schenck (Wiley) Stanford Social Innovation Review, journal about the nonprofit sector Starting and Managing a Nonprofit Organization: A Legal Guide by Bruce R. Hopkins (Wiley) Storytelling for Grantseekers: A Guide to Creative Nonprofit Fundraising by Cheryl A. Clarke (Jossey-Bass) The Twenty-First Century Nonprofit by Paul Firstenberg (Foundation Center) Twitter For Dummies by Laura Fitton, Michael Gruen, and Leslie Poston (Wiley) Winning Grants Step by Step by Mim Carlson, Tori O'Neal McElrath, and The Alliance for Nonprofit Management (Jossey-Bass)

Article / Updated 03-26-2016

You should already have the articles of incorporation papers you need from the appropriate state office for your nonprofit. (If not, use the list of state offices at the IRS website for contact information.) That office may even have provided sample articles of incorporation and instructions about how to prepare your own. Pay close attention to the instructions. The whole process may be as simple as filling in the blanks. Although you can amend articles of incorporation, it requires filing additional forms and paying more fees, so you may as well spend time getting them right the first time. IRS Publication 557 contains information about the language needed in the articles of incorporation, along with some sample articles. You can download this publication from the IRS website. Craft a heading You must put a heading on your articles so people can identify them. The heading should be something like this: Articles of Incorporation of the XYZ Theater Company, Inc. Sometimes you're required to add a short paragraph after the heading, stating that the incorporators adopt the following articles under the [cite the state code number under which you're filing] of [give the state name]. Article I You insert the name you worked so hard to choose here in Article I. Simply write a sentence like this one: The name of the corporation is the XYZ Theater Company, Inc. Could it be any easier than that? Article II Some states require that you affirm that your corporation is perpetual (meaning it's intended to exist forever). If your state requires that affirmation, put it in Article II. You can include something like this: This corporation shall exist in perpetuity unless dissolved. However, chances are that the state will give you the language to use if it's needed. Article III Article III is a good place to state the organization's purpose. This article is probably the most important because state authorities and the IRS review it to determine whether your organization qualifies as a charitable entity. Remember that 501(c)(3) organizations must be organized for a charitable, religious, educational, literary, or scientific purpose. You've already created your mission statement, right? If so, stating your purpose shouldn't be too difficult. Using the XYZ Theater Company as an example, your purpose may look like this: This corporation is established to provide theatrical productions of new and classic plays. It also will work to strengthen the theater arts, support emerging playwrights, and encourage persons to enter the acting profession by providing scholarships and grants to theater arts students and by promoting the benefits of dramatic entertainment to the general public. This article also must include a statement of exempt purpose under the IRS code, as in this example: This corporation is organized exclusively for charitable, literary, and educational purposes, including for such purposes the making of distributions to organizations that qualify under section 501(c)(3) of the Internal Revenue Code or any corresponding section of any future federal tax code. You must state that no proceeds of the corporation will enrich any individual, except that reasonable compensation may be paid in exchange for services to the corporation. Finally, you must note that if the corporation is dissolved, any assets remaining will be distributed to another corporation that serves a similar purpose and qualifies as a tax-exempt, charitable organization under the provisions of 501(c)(3) of the Internal Revenue Code. You don't need to identify a particular nonprofit corporation; you just need to affirm that assets will be distributed to one serving a purpose similar to yours. Article III may be the most critical for getting your nonprofit corporation established and, ultimately, approved for tax exemption by the IRS. If your state doesn't provide good examples of the language required in this article, ask a lawyer about the requirements in your state. Article IV All articles of incorporation identify the name and address of an agent of the corporation, someone to whom mail can be addressed. This address is considered the address of the corporation until changed. Include the person's name and street address. Post office boxes aren't allowed to be used as addresses. The agent of the corporation doesn't need to be a director or incorporator of the corporation. This person can even be your attorney. Article V Put the initial directors' names and addresses in Article V. Most nonprofits start with three initial directors. If you're incorporating in a state that requires only one director, consider still having three. Because nonprofit organizations are formed to provide public benefit, demonstrating that several people are involved as volunteers may strengthen your application to the IRS for tax-exempt status. Article VI In Article VI, you list the incorporators' names and addresses. Incorporator simply refers to the person or people who are creating the corporation. Often, the incorporators and the initial directors are one and the same. Again, whether you need one or more depends on your state requirements. Article VII If you want your corporation to have members, you define the qualifications for membership in Article VII. You can define classes of membership. If you don't want members, all you have to say is, "This corporation has no members." Better yet, refer the question to your bylaws, which are easier to amend if you change your mind. If that's what you decide to do, you can use this language: Membership provisions of this corporation are defined in the bylaws. Members of a corporation have the right to participate in governing the organization. Article VIII You may not need an Article VIII in your articles of incorporation. Some forms have a blank space here to add additional provisions. Don't add any unless you're sure you know what you're doing. Maybe your group is adamant that all future directors must be elected by 85 percent of the membership. Such a provision probably would ensure that you'd never elect new directors. Use this blank space cautiously.