Charity Begins at Home So how do I initiate a homebased, not-for-profit business?
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QUESTION: I want to start a homebased, nonprofitorganization to help people who can't afford dental care. Iplan to telemarket or go door-to-door for donations. How can I findout about the regulations on such a business? How much salary can Iexpect to draw? I'd like information on how to run this type oforganization legitimately.
Eva H. Carman
Royal Oak, Michigan
ANSWER: We've been surprised to learn how manynot-for-profit organizations are operated from people's homes.The causes range from providing clothing, shelter and jobs tosaving animals of terminally ill patients.
Before you start, check with state and local authoritiesregarding any pertinent regulations. The Web makes checking theseformalities easier now that many states and cities have theirentire body of governing laws and ordinances posted on their sites.Still, you may need an attorney to interpret complexities in thelaws.
To build your organization, you need to incorporate as anot-for-profit. Since you plan to solicit money, apply for501(c)(3) status with the IRS. Notify the state when you get your501(c)(3) status; in your case, contact the Michigan Department ofthe Treasury. This will enable donors to make tax-deductiblecontributions to your organization. Some states also require alicense for certain types of businesses, and some cities regulatethe solicitation of money.
Your salary must be comparable to what others in similarly sizednonprofit organizations are paid. A useful resource to help you getunderway is How to Form a Nonprofit Corporation (Nolo Press)by Anthony Mancuso; the book includes a disk with forms and sampleletters you can use to get through the legal steps.
Small-business experts Paul and Sarah Edwards recentlyreleased their second edition of Getting Business To Come ToYou (Tarcher). If you have a question regarding a start-upbusiness issue, contact them at http://www.paulandsarah.com or sendit in care of Entrepreneur.
Small-business experts Paul and Sarah Edwards recentlyreleased their second edition of Getting Business To Come ToYou(Tarcher). If you have a question regarding a start-upbusiness issue, conatact them at www.paulandsarah.com orsend it in care ofEntrepreneur.
