We've assembled a series of helpful FAQ's and answers in hope to help you better understand the requirements and operations of a non-profit:


Q. What are some of the criteria needed to qualify for 501c3 status?

A. Typically, in order to qualify for 501c3 status an organization must prove they provide community service or enrichment. Non-profit organizations are typically entities like religious groups, charity fundraisers, community improvement, educational groups, and animal rescue/fostering.

Q. What is required for the application and approval process?

A. You must properly submit Form 1023 to be eligible for 501c3 status. Typically, the determination process by the IRS is on average 3 - 6 months from the time they receive the application. In some cases, depending on the type of organization, the process can either be extended, or expedited.  a 3-year financial projection is required in the application as well.

Q. What are Articles of Incorporation (AOI) and Bylaws?

A. Articles of Incorporation is essentially a business model for any non-profit outlining the purpose and parties involved with the organization (AOI requirements vary from state to state). Bylaws are simply the delegated rules and obligations determining how the organization is operated. They should state the roles of each individual and delegate responsibilities for every member.

Q. What is the role of board members and how many do I need?

A. A Board of Directors, just like any other business entity, consists of elected members that consider and approve major decisions within the organization to ensure the organization is fulfilling their obligations internally, and to the general public.  Any non-profit board committee is required to have at least a President, Secretary, and Treasurer.  There are not limits to the number of board members, however the overall board committee must consist of mostly unrelated (non-family) members to ensure there is no preferential decision-making.

Q. What are the conditions for being sales and franchise tax exempt?

A. Once you are approved for 501c3 status, your requirements to become sales and franchise tax exempt depends on which state you operate in.  Upon receiving IRS 501c3 certification, Texas non-profits must separately file for state sales tax, franchise tax, and hotel occupancy tax exemption approval.

Q. What are the tax filing and bookkeeping requirements for a 501c3 organization?

A. A non-profit organization is required to file a Form 990 each year disclosing your fiscal income, which is legally required by the Government in order to remain compliant.  There are a variety of formats of the 990 depending on the financial operations of a given non-profit organization, so consulting a professional non-profit tax consultant is crucial to file properly.  By law, the 990 form must be submitted by the 15th day of the 5th month following the end of a fiscal year.  It's important to maintain healthy bookkeeping throughout the year to ensure the 990 filing obligations are done correctly.

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