Hi Mark Kohler here with another tax and legal tip. Let’s talk about setting up your own charity

How cool would that be! something that you can help control and get donors and make the world a better place?

Well, it’s an exciting topic. Now. There’s a lot of pros and cons and some how to’s here. It’s a huge topic

So let’s dive into it and see where we go. Now. I want to go through the good news

the bad news

The how-tos and explained right off the bat that I’ve got a full blog article on this with lots of bullet points in detail

If you’re serious about this, you want to hit on that link below and get to the article

It’ll help you out a ton as you prepare and consider to take this step forward

Now this hit 3 bad news items first

You have to have a charitable purpose now some you may think well mark, that’s why I’m doing this

How can that be bad news? Well, I do get clients. Call me sometimes again

Oh

I want to set up a charity that can get donations and then it’s gonna hire my business or it’s gonna give me a job

Or some fangled way that it’s gonna help their business if you have that ulterior motive somewhere in your plan

Let me tell you right now

it’s not going to the IRS sees through that they’ve been doing these for years approving them or rejecting them based on these little

Side deals that are kind of charities in a sense, but they’re really to help your business. Don’t go there

So the first issue is which some may consider bad news others think of it

This is the reason I’m doing it

you’ve got to have a charitable purpose something to make the world a better place whether

Locally regionally in the United States or in the world. I don’t care if I have a charitable purpose. That’s not to benefit you

Number two, there are rules to running a charity

You can’t just open up a bank account and think oh, I got a charity now

No, you’ve got to go through some steps, which I’ll come to is the third item of bad news

but the second one is as operating it you’re gonna have to deal with some ongoing rules of

following procedures filing an annual tax return

Reporting to your donors and the and the people that you’re trying to benefit on a website. That’s very

Transparent but once you get the rules down, it’s not too bad. But just realize you go in

With some requirements and I want you to have your eyes wide open

As you go through the plans that you’re gonna have to implement throughout the year to maintain it. Now number three, I hit it

That’s right. There’s some setup procedure. It doesn’t happen overnight now

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I set up charities here at our law firm around the country every month

We’ve got one in the works at all times and I love it

It’s really exciting to talk to these people about their passionate ideas

But again, it might take two to three months to get it approved. Now. There’s a nine month retroactive

Effective date, so if you started it the paperwork on January 1st

And we didn’t get approved until April I can still back date the charity to January 1st

And you could start getting donations right away, but you’ve got to realize that there’s some paperwork involved and it’s time-consuming

There’s also a cost we charge around 3 grand at our law firm. You’re gonna see places charged a little cheaper than that and sometimes

$10,000. Oh and but let’s just do it cheaper and you’ll be part of a larger charity or something like that

There’s a lot of options out there but usually for your own charity

You’re gonna be looking for around two to four grand to get it set up and it’s gonna take you 2 to 4 months

So keep that in mind now for pieces of good news first donors get a tax deduction

so that’s a great way to get people excited about your business because they’re gonna get a tax write-off whenever they give your

Little business, which is really a non-profit really is about is it it’s gonna be ran like a business

so people that donate money to it are gonna want to know where it’s spent and they’re gonna get a tax write-off to give you

money for your charitable purpose

so

Keep that in mind as you go out and sell this ideas that you’re gonna get to do some pretty cool events whether they’re bake

Sales or a golf tournament or a black-tie affair think outside of the box think auction and raising money

Number two related to number one getting those amazing donors to give you money

I want you to really interact and work with some amazing people people that may not normally give you the time of day

But if you’re able to bring up a charitable topic you can work with some pretty fantastic

People that are really well networked. And so I guess there is kind of a side benefit to you and your

Professional life or your business is that you can get some exposure working with some really neat people and I think that’s a good thing

I think that’s an OK thing Xem them gui hang di nhat cua Viexpress

Now you’re not doing the charity just to make connections

But I would consider a side benefit to having to charity is the people that you get to interact with

Number three benefit you get to control where the money goes with this

Now what I mean by control is you’re gonna have a Board of Directors and you’re gonna be a part of a team

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This is not your business. There’s no shareholders. No one owns this thing

it’s ran by a board and you might be the chairman of the board for the first couple years and it’s gonna be ran like

A little country. There’s it’s gonna be a democracy

but the neat thing is it’s not like you’re giving a

Thousand dollars to United Way or the Salvation Army or American Red Cross and you may not know exactly where your thousand dollars is

deployed well with your own charity you do and you’re gonna have to like your donors know where the money’s spent – how much of

That thousand dollars actually goes to the bottom line benefit of someone for that charitable purpose

But the exciting thing is is you get to control the overall

operation with your board and this is where a lot of people find the benefit of a

Charity is that they’re not just giving money into some bottomless pit. They’re really really involved in the process

Number four. Yes, you feel good and it’s true

And I think it may sound a little cheesy to say but one of the major benefits of having a charity

Is that amazing benefit of giving back and making?

the world a better place

so be really excited about that charitable purpose because

it’s gonna take a lot of blood sweat and tears but the feel-good benefit payoff at the end is

Amazing now finally a little how-to I talked about the time process and the cost

But in the how-to when we set up a non-profit for our clients around the country

We always start with a nonprofit corporation. Not an LLC not a trust just the way we do it

I think it’s simpler and easier and in all 50 states, you can set up a nonprofit corporation

We get a tax ID number we set up your board we go through your bylaws

I have a memo I give out to our clients of

What I need to get their charity off the ground and I’ll send that to you for free

Just send me an email mark at Mark J Cole or comm and say mark

I want to set up my charity give me that memo and I’ll send you a memo of what we’re gonna need and

where the retainer is at in the process and and get things started but we’re gonna start with a corporation a list of all the

information I need which is in Goodin gonna include budgets and

Forecasts and and kind of what your plan is in a mission statement and a description of your purpose and all that good stuff

That’s what’s going to come out of that list that I’m going to give you for that memo

And then we’re going to start preparing your application for with the IRS

And this is where it takes time and there’s some costs involved and that’s why setting up a non-profit is a process

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It’s a project. So that’s how we go through it. We set it up at the state level then

We apply to the IRS then we interact back and forth with the IRS until it’s finished

We charge a flat fee

For a reason because we don’t want you to feel like it’s a bottomless pit of just giving the law firm money you can budget

for that you can raise money for that the filing fee with the IRS could range anywhere from four to eight hundred dollars depending on

The type of charity you’re gonna do it could be a ten twenty three or a 1024 application, right?

It sounds like a lot

Well, that’s why you want to work with a law firm that knows what they’re doing because it is legal documentation

It’s not an accounting firm process

it’s a law firm process and

shop around and

Give our office a call too and shop at shop it out with us to see how much we would charge and how we could

Help you out, but that’s the process. It’s not a sales pitch video. This is not an infomercial

I want you to know what to expect as you go out there and shop around in summary

I think this is amazing idea. Don’t give up on it

Even if it’s a item that you’re planning to do in the next

Three five or ten years put it on your wish list put it on your bucket list

It’s on my bucket list and I’ve got some pretty amazing ideas that I want to implement someday

You know what?

it kind of helps us get up in the morning and keep working hard because someday we’re gonna be able to give back to give

That huge payoff and that feel-good experience. So don’t give up on your dream

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