***BEFORE TAKING THESE STEPS, it is important to think about whether incorporating as a nonprofit is the best choice in your group’s situation. For example, there are times when working with another fiscal agent, collaborating with an existing organization, or remaining an informal group are better options. Extension staff can talk with you and work with your group as you consider this.
***When you are sure that a formal, incorporated organization with tax exempt status is what you need:
Step 1: Search for names already used in Wisconsin (WI Department of Financial Institutions, Corporate Records Search).
Step 2: Fill out the form for Articles of Incorporation ($35) with the State of Wisconsin. WI Department of Financial Institutions Form 102, “Nonstock Corporation Articles of Incorporation”). Include your mission statement (the purpose of your organization – what will you exist to do?) and these statements that the IRS needs. Additional information is found in IRS Publication 557 “Tax Exempt Status for Your Organization.”
- “The organization is organized exclusively for charitable, religious, educational, and scientific purposes under section 501©(3) of the internal Revenue Code, or corresponding section of any future federal tax code.”
- “Upon the dissolution of this organization, assets shall be distributed to one or more charitable organizations for exempt purposes within the meaning of section 501©(3) of the Internal Revenue Code or corresponding section of any future federal tax code.”
- “No part of the net earnings of the organization shall benefit or be distributable to its board members, officers, volunteers, or other private persons, except that the organization shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes described in section 501©(3). No substantial part of the activities of the organization shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the organization shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition to any candidate for public office. Notwithstanding any other provision of these articles, the organization shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under section 501©(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code, or the corresponding section of any future federal tax code.”
Step 3: While waiting to receive confirmation of your Articles of Incorporation, write bylaws of your organization. Diana can work with your group to write these, provide examples, and advise on best practices specific to needs of your group.
Step 4: Receive confirmation from the State that the Articles of Incorporation are approved.
Step 5: Register for an Employer Identification Number with the IRS.
Step 6: Apply for Tax Exempt Status from the IRS. They will need to see the Articles of Incorporation, the EIN, & the bylaws to make this decision.