A homeschool parent is launching a new homeschool program. Like many nonprofits, she needs some money to start up.
The main concern for our group at the moment are funds for filing (for nonprofit incorporation and 501c3 tax exempt status).
We have brained stormed and agreed on holding a spaghetti dinner fundraiser but we aren’t positive that this will bring the funds we are hoping for. Another idea is to present the exact cost to those members interested and see if they will be willing or able to divide the start up cost.
Sounds like you have an exciting adventure ahead of yourself by forming a homeschool nonprofit!
You asked about initial funding. Many homeschool groups get their initial funding from donations (or loans) from the board members. You could also ask friends, family and potential members for donations.
Having a fundraiser or soliciting donations can be tricky because you need a bank account and to get that you need an EIN and you should get an EIN only AFTER you form a nonprofit corporation. But that’s what you need the funds for, so you’re caught in a Catch-22 cycle!
Additionally, some state require organizations to register before conducting a fund raiser or soliciting contributions from the general public. Here’s a source to see what your state requires: https://www.harborcompliance.com/information/nonprofit-compliance-guide
So it seems donations (or temporary loans) from the board members or potential members is your best option.
I have three podcast episodes to explain starting a nonprofit or converting a homeschool business into a nonprofit organization. My podcast can be found at HomeschoolCPA.com/Podcast The episodes are:
- Episode 168 Part 1 Nonprofit basics
- Episode 169 Part 2 Nonprofit corporation
- Episode 170 Part 3 Tax exempt application
Additionally, I have a webinar that goes into much more in-depth on starting a nonprofit organization. Unlike the podcasts which are free, the webinar costs $10.
Get details for Create a Nonprofit for Your Homeschool Community webinar at HomeschoolCPA.com/CreateNP
If you don’t want to be taxed on any surplus, then you’ll need nonprofit AND tax exempt 501c3 status for your new group. The webinar will explain that. 🙂