Monday, September 24, 2007

start me up! (part 1)

This post may have to be done in a couple of installments, as I find myself torn in a dozen different directions these days, by the buzzards of economic neccessity, to name but one force competing for pieces of my flesh. (Now, there's a catchy opening line, if a bit, shall we say, overwrought).
The big thing I'm in the middle of, the reason for this blog, is setting up as a functioning entity to carry out the work we've begun in New Orleans. This requires patience, a little money and a bunch of people behind you who keep saying, "Yeah, this is a good thing to do, Rick, so keep up the good work." For those of you who might be considering doing something similar, I'll detail the steps we've taken so far, for what it's worth.

First of all, never mind the fact that a bunch of us have been working on this idea, committing our time and money to trips to the Lower Ninth Ward, for months. That was all unofficial, just a group of do-gooders doing good things, in a fairly organized, but unfocused way. To make things official, the first step you have to take is becoming a corporation recognized to do business by the state in which you incorporate. This is fairly easy, as it turns out, you file some paperwork with the state and they either accept or reject your application. But, be warned, the paperwork includes things like a mission statement, by-laws, names of directors, and a few other things they asked for along the way, which I forget now. So, get your directors on board before you try and incorporate, get the mission statement written and fantasize a budget, two years worth, even though you have not a nickel to your corporate (you hope) name.

For the next step, all I can say is, hire a lawyer, if you can afford it, because after incorporating you need to file your application with the IRS to get non-profit, tax-exempt status. This application is many, many pages long, and if all the little spaces aren't filled out to the IRS's satisfaction, you'll be supplying them with supplemental information until the cows come home. A lawyer who has experience filing these applications can save you time by letting you know up front just what kinds of additional documentation you should provide, and time in this case means money, because you can't start hitting people up for tax-exempt donations until you get your approval letter. Also, the IRS changes the rules every couple of years, and a good lawyer should know what the current requirements are.

While you're in that in-between stage - you have your incorporation, but not your 501(c)(3) - you should start talking up your newly-formed organization with everyone you know, in the hopes that you can raise enough scratch to start putting infrastructure in place to get the program off the ground, even if only in a modest way. Explain to potential donors that you don't have tax-exempt status yet (very important! if the IRS thinks you have misrepresented yourself to donors, you'll never get approved and may go to jail), but ask them if they're willing to make a small donation to help you get the thing going. If you're lucky, you'll know someone, or meet someone, who has enough money and doesn't need the tax write-off, who can make a substantial donation. But, at any rate, ask everyone you know for money, without exception. An interesting little-known fact about non-profit giving is this: 85% of all charitable donations come from households or individuals who make less than $50,000 per year. This percentage has remained constant (with the income level adjusted to reflect current wages/prices) as far back as figures on charitable giving have been tracked, which, I believe started in the 1930s. So, ask everybody!

In part two of this post (see, I told you I'd have to run off somewhere and do something) I'll talk more specifically about where is today in terms of what we've managed to raise so far, and how we're going to get it all to New Orleans, so stay tuned!

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