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I am interested in starting a nonprofit organization. Can I get private donations first?
I am trying to start a nonprofit organization to assist people who are struggling or lost their jobs because of injuries. I am in a similar situation and need to get back on my feet before establishing the company. Can I take donations before starting this organization? What are the legal/tax issues?
It is sort of a catch 22 for me because I need a bit of charity myself before I can begin helping others. I was terminated from my job 2 weeks after back surgery and, due to the new Health Care Law, I am required to pay 150% of my premium for my COBRA payment. I am trying to raise awareness of this particular portion of the Health Care Reform, get back on my feet, and help others who are in my situation or something similar. I also plan to expose companies who are treating employees this way and support employers who help their workers when times get tough. I'm not sure if nonprofit is the way to go, but I assure you that helping people in need is the intended outcome.
2 Answers
- PiggiepantsLv 71 decade agoFavorite Answer
No, until you are incorporated as a nonprofit organization, registerd with your State's Attorney General's Office and have received your nonproit tax-exempt status from the IRS, you can't solicit funds. Any money you raised would qualify as income to you, and you would have to pay taxes on the money, and your 'donors' would not be able to get a tax-exemption for their gift.
If you do want to pursue this when you are back on your feet, you should volulnteer or work at a nonprofit that does something similar - this way, you can find out from the inside how such an organization is managed, funded, and operates.
- Hoa NLv 61 decade ago
It is tough for people giving the money to you without the benefit of the tax exempt.
you did not earn their trust yet.
you may use the money for your own personal gain.
People will not believe your intention. You have to have credential helping people before they donate their money.
You need to establish your non-profit first before you can get donation so people can writing the tax off.
