Thinking of forming a nonprofit
organization? You're wise to do so. There are a great many advantages
that will come to you when you take your informal animal welfare group
to the next level. Among them are:
- Tax exempt status. IRS 501
(c) (3) nonprofit corporations are eligible for state and federal
exemption from payment of corporate income taxes. This will mean a
tremedous difference if you expect to keep most of the money given
to you in the form of donations or money earned performing services.
- Receiving public and private
funds. One of the primary reasons for becoming a 501 (c) (3)
nonprofit corporation is so your group will become eligible for
public and private grants.
- Credibility. The fact that
the IRS has looked over your present and planned acitivities and
finances carries a great deal of weight with donors, as well it
should. In addition, if a tax-conscious donor is contemplating a
large donation and has to choose between two equally worthy groups –
one with tax exempt status and without, guess which one will get the
donation?
- Limited Liability. This means
that directors or trustees, officers, and employees and members of
the nonprofit corporation are not personally liable for corporate
debts or liabilities. Creditors can only go after corporate assets,
not the assets of the people in the nonprofit corporation.
- Other advantages such as
lower postal rates, lower advertising rates, free radio and
television PSAs, low or no banking fees are all "perks" of a
nonprofit corporation.
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