It Just Got Easier to Start a Small Nonprofit
When people say “Nonprofit” they often mean “501(c)(3) tax exempt charitable organization.” That’s what YIP is and whom we mainly partner with, but I rely on the easier shorthand of “nonprofit”, too, despite my lingering anal retentive lawyerly ways.
To start a 501(c)(3) tax exempt charitable organization, you need to incorporate a nonprofit corporation and then apply for tax exempt status with the IRS. Before, that meant filing out Form 1023, which is fairly long and intimidating to non-lawyers or non-accountants. For most small non-profits, this meant a ton of work. Disturbingly, some unscrupulous lawyers out there will charge a small fortune to fill out these forms.
The IRS has done something about it: now, small nonprofits can apply using Form 1023-EZ. The form is limited to nonprofits that expect to stay under $50,000 in revenues and have under $250,000 in assets. To use the shorter, quicker form, the nonprofit needs to check out the instructions to it, filling out the eligibility worksheet located there, and then go to pay.gov to find the form. Given that it can take over a year to a regular Form 1023 processed by the IRS, hopefully using Form 1023-EZ will result in significantly faster approvals.