Starting a 501(c)3

As we’re regularly asked about advice for this topic, I figured I would compile some things so you dont have to reinvent the wheel as much as we had to !

First, hire StartChurch - this is a paid service to get everything set up legally for your 501(c)3 nonprofit - this process can easily take 100 hours to complete on your own - so hiring this service is a no brainer - let them make this process easy so you can focus on the most important things of your nonprofit.

They will guide you through the whole process for ease of mind and their services include :

  • Become Incorporated

  • Open a church bank account

  • Have customized, ironclad bylaws

  • Establish and protect your board

  • Obtain 501(c)(3) tax-exempt status

  • Become ordained (to be eligible for the Ministers Housing Allowance)

  • Be able to receive tax deductible donations

We also recommend purchasing a few of their add-on’s — Compensation, Tax, Exemption, Compliance, Policies and Mintue Suites. This makes the process of setting up your personal taxes much more straightforward.

A few considerations for setting up your nonprofit - we would recommend establishing your nonprofit in a state that doesnt have income tax and has someone you trust that would be willing to have their home listed as the location of the nonprofit. Two states we’ve heard recommended are Florida or Tennessee. Then check for the requirements for that particular state to make sure it fits your needs (looking for what filings they require, what taxes need to be paid annually and what requirements for employees - such as health insurance, retirement, Workers Compensation, etc.), sometimes there are associations who will have complied this information, for example this one in the State of California. StartChurch will likely have great advice for this point.

Accountant - this will be your next most important hire. You want someone that can make sure that your book keeping is clear - especially with the nuance of working overseas - there are some unique opportunties and challenges to our tax filings that your average accountant wont be familiar with. We have used Loren Gill from Village Tax Services, you can email loren@villagetaxservices.com.

Note - you’ll also want to set up Payroll - we use Gusto, details are below under the Nonprofit Discounts section - or you can hire Loren to do your payroll for you !

Donation Processing - our donation platform is called Simple Donation. There are many options out there, but we have really loved that they have a very simple format for donors to easily sign up, and they have really great customer service if any questions arise. They have even made a custom video for a step by step guide for donors to transition from our previous donation platform, to theirs. (Though if your current donation platform utilizes Stripe, then this process is even easier!)

The best part ? Their platform makes sending tax deductible receipts super easy - its just a few button clicks at the end of the year, and everyone is emailed a copy of their donations !

US Pox Box - in order to manage our mail from anywhere in the world, while not having to list the legal address of the nonprofit on our website, we use a service called Anytime Mailbox, but basically look for a “virtual mailbox” near where you have someone who can recieve checks on your behalf.

Donor Communication - we send a weekly one minute update on what our nonprofit is up to and it has made all the difference for our donors feeling connected with what we are doing ! There’s something to seeing us sharing in real time what we’re doing, all in the time they are stuck at a traffic light (as they recieve it as a text or email) where our donors have been more connected than ever ! The service is called Viewspark, and it does have a subscription, which is expensive, but we went from never getting any end of year giving for six years, to now getting several thousand. Its 100% worth it.

Corporate Donations - as a nonprofit, you can ask for different kinds of donations from corporations (for example, tshirts from Carhartt for your team to have branded items)- this will require special receipts, but is worth exploring if you need certain items for your work. (Canva is a great option for making your own nonprofit letterhead, and then asking ChatGPT for a template for this type of donation)

Frequent Flyer Miles - this is a great option for asked for as a donation, it unfortunately doenst count as being tax deductible, but it could be a creative way for people to partner

E-Sim Card - if you dont already have one set up, this is a crucial part of making all admin done remotely possible, click here for more info on this process

Do you have Student Loans ? In being an employee of your nonprofit, you can get a W-2, which means that you should explore the Public Student Loan Forgiveness program

Free Services with 501(c)3 Status : (If you dont have a US 501c3, many ask for comparable verification of registration)

  • Canva Premium - this is your go to to build a simple website, and create any graphics you need for social media, Annual Reports, etc. You can put together your specific nonprofit branding (your logo, colours and fonts) and from there easily make any materials you need for presentations.

  • Google Workspace - have everything in one place - set up nonprofit emails, calendar, cloud Drive and Meet (so a free Zoom)

  • Monday.com - this helps you to manage the major projects of your nonprofit, as well as features for grant management and CRM - its a game changer. They also have a way to do emails - its a bit more advanced but doable, and then you dont have to pay for another service for your newsletters (ie. Mailchimp)

Free Tools :

  • AdobeScan - this app allows you to scan and convert to PDFs easily from your phone to your laptop

  • Typeform - this makes beautiful, conversational forms, surveys, quizzes, and apps

Nonprofit Discounts :

  • TechSoup - this is a subscription service that gives you access to further discounts specific for nonprofits, for example, we use this for a discount on Grantstation every year ($80 off) - its worth seeing if they offer discounts for services you already use or need. Connecting Up is one of their global partners, and has a few more items they offer that could be qualified for.

  • Goodstack - discounts for Zoom (50% off), OpenAi (ChatGPT), Adobe - they are explanding to utilizing Ai for Grantwriting & Applications (for a fee)

  • Gusto - Payroll for nonprofits - all your tax forms for employees in one places - its super easy to use (here are details on their nonprofit program - but click the first Gusto link aboce for $100 !)

  • LinkedIn - this platform is becoming an important way to connect with donors and share about your nonprofit - with a Nonprofit Resources Hub

If you start to dream of scaling your nonprofit beyond just you as a couple doing ministry, then here are some other resources to consider :

  • To recieve donations of cash or stock from a handful of other countries (and from the US) - TrustBridge - this is primarily for large donation amounts as they do take a percentage, but its a great option to explore

  • Set up your Candid profile (formerly Guidestar) - having their seal on your website looks great !

  • Grantstation - we get a discount for this through TechSoup (discount happens twice a year)

  • ECFA - if you’re hoping to get major funding from Evangelical organizations, you will run into questions of your accreditation, and the ECFA is the gold standard. This means that from our establishment as a nonprofit we were following closely what they require, so that once we could qualify, we easily could submit to them all our documentation. The biggest requirement is to have clear bookkeeping from the last give years- which is why we prioritized hiring an accountant early on - they also outline best practices for your Board, and is all around a great resource for wisdom for running a nonprofit !

  • Docusign - if you’re needing to send legal documents reguarly, you can get a discounted subscription

  • ChatGPT - they offer a slight discount for their Business Subscription - this only makes sense once you’ve scaled as its still quite expensive ($480 / year) - but for a whole team its incredibly efficient and effective

  • Password Manager - for security and keeping access to all your accounts, you will want to make sure that basicially only your Executive Director and Board President have control of all the administrative passwords, and from there passwords are managed between the relevant teams.

    • Check out 1Password or LastPass for their nonprofit offerings

    • Start by taking an inventory of the login credentials and sort them into categories/departments (for example, Development/Fundraising, Marketing & Comms, Grant Portals, Operations etc.)

    • Identify a Top 4 admin (ED, IT/CommsPerson, Board President, and maybe like a social media manager or someone in HR). This is absolutely a security thing and it’s basic controls. Since you’ll most likely get pushback this is where the categories come in. If people on the board want to have more access to the backend you need to understand why. Do they serve on a committee? Why do they need this level of access? If they make a compelling case then you can give them access to just a set of credentials that pertain to a specific category.

    • Then you will need to transfer all your accounts into a password manager, and this will be annoying, but you’ll have to reset all the passwords to ensure that moving forward only the select few have the most up to date access.

If you are living & serving in South Africa, here are a few other implicational thoughts :

  • Your Visa - you will need to explore options for your visa status - serving under another organization, establishing your own South African nonprofit (adds layers to your admin, but it is possible, we can make some further recommendations), or applying for a Retirement Visa (talk to these immigration lawyers). The Retirement Visa is a pathway to Permanent Residence, which is worth considering.

  • If you do establish your own ZA Nonprofit - you will need a ZA Accountant (we have a recommendation)

  • To get ZA Nonprofit Organization Status (versus a Nonprofit Company status) - you will need to build out a much more intentional Governance structure, policies and funding platform, so its advisable to hire a nonprofit lawyer to consult on this process for you