Ways & How

how to start a charity foundation

how to start a charity foundation

Starting a charitable organization may not be easy, but helping people in need is very fulfilling. If helping others is more important to you than material success, then this may be the path for you. There are few important things you need to consider on the topic of how to start a charity foundation. If you want to give it a try, here are few steps to follow:

  1. Have a clear goal. As a charitable foundation, you need to a specific purpose. For example, people with lung cancer may be your primary beneficiaries by supporting them and research on lung cancer. Many charitable groups, for instance, help third world countries in various ways, such as providing food, clothing, and other supplies. There are also groups concerned about the rights of women and girls around the globe. Once you have a specific cause, you can frame your mission statement and tailor it toward that goal.

  2. Prepare a mission statement and overall plan of attack. Whatever type of charity you want to start, you need to be able to succinctly state your main goal and objectives, both short-term and long-term.



    It is best if you can thoroughly study your target beneficiaries and estimate how vast their needs are and how long it will take you to accomplish a given objective. To establish your foundation and keep it going, you’ll need donations and grants. You will be much more likely to receive aid if you have a clear mission statement about your goals and plans on how to accomplish your objectives.

  3. Research the applicable laws in your area. In most jurisdictions, in order to become a legal organization, you need to register at the Secretary of State Corporate Division. Secure a Federal Employer Identification Number, which you will need to file taxes. There are also places that require local accreditation so that a charitable group can operate legally.

  4. Prepare your articles of incorporation and by-laws. The articles of incorporation detail the incorporators, the nature of the group as charitable organization, the address of the principal office of the group, and the structural composition of the foundation. The by-laws will lay down the rules and regulations concerning the day-to-day operation of the foundation. It may also include how decisions are made, who makes the final decision, and who executes it. It is also best to include methods of resolutions in the event of differences within the organization. In most cases, the articles of incorporation are pro forma in nature, but verify this in your locality.

  5. Recruit people to your Board of Trustees (BOT). They act as the executive management board of the organization. In the group of trustees, you need to name an authorized representative of the foundation who shall act as agent in terms of accepting reports and other similar papers from the State.

  6. Apply for tax exemption. Based on the Internal Revenue Code, Section 501 (c) 3, a charitable foundation can apply as tax-exempt entity by filling out the IRS Form No. 1023 or the Application for Recognition of Exemption and IRS Form No. 8718. Once the foundation is tax-exempt as non-profit organization, any amount of money received as donation and assistance will be exempt from the federal tax.

  7. Establish networks. Going into charity work entails a lot of work before you can actually help others. Essentially, you will need to establish local and national and maybe even international contacts to back-up your foundation.

Knowing how to start a charity foundation is the first step that you can take if you’re serious about establishing one. As the saying goes, “It is better to give than to receive.” Helping people will bring you an exceptional sense of achievement and joy that has no monetary equivalent.

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