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Managing the Process

Managing the Money

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Managing People

Nonprofit FAQ

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The Basics II

  • What exactly is a nonprofit?
  • Do you really want to form a nonprofit?
  • What types of things do you need to do?
  • What should you think about before starting a nonprofit?
  • Make sure that the corporation always follows all current federal, Ohio and local laws.
  • Make sure to have Articles of Incorporation, bylaws, minute books, membership records and other necessary paperwork.
  • New corporations need to choose the officers and directors.
  • Click here to read about tax-exempt laws, tax information and responsibilities on this site.
  • Write your Articles of Incorporation so that your nonprofit will qualify to be tax-exempt. Talk with an attorney or tax specialist to make sure your organization is set up properly right from the start.
  • Don't say you are tax-exempt until you get your approval letter and ID number from the IRS. Don't try to raise large amounts of money until you've received IRS approval and your ID number.
  • Treat the nonprofit's assets completely separate from the personal assets of any individual. The assets of the corporation belong to it, and not to any individual.
  • Taking money for personal expenses is not allowed in a nonprofit organization, and, if you don't follow that rule, you will be held legally responsible.
  • The corporation can sue and be sued. Take legal and business like steps to avoid being sued. Talking with an attorney is a great idea.
  • Keep good records, for example:
    • Accurately record all money coming in and going out.
    • Maintain a separate corporate bank account. Do not use someone's personal account.
    • Keep an exact written record (minutes) of what happened during board meetings, the actions that were taken and the voting process. Also keep copies of all legal and other important paperwork.
    • Create, read, and follow your bylaws (the rules for running the daily operation of the nonprofit corporation).
    • Put the corporation's contracts in writing (i.e., legal contracts, real estate contracts).
  • Know and follow the laws on fundraising. For example, make sure your fundraisers benefit the nonprofit corporation and not individuals or a group that may have handled the fundraising for you.

    The Foundation Center is the nation's leading authority on philanthropy and is dedicated to serving grantseekers, grantmakers, researchers, policymakers and the general public. It may help to review these resources.
    http://fdncenter.org/.

  • Prepare a plan for corporate changes. At some point, the founders and other early leaders of the nonprofit may move on or are no longer able to help. Train new officers and directors. Keep a complete written record on how things are done so the next group of leaders can continue on with the work (and not have to "reinvent the wheel").
  • Always act in a responsible, trustworthy and lawful manner when handling all nonprofit corporate activities.
  • Fill out and send the basic forms to the Secretary of State.
    http://www.sos.state.oh.us/SOSApps/SOS/FormRefbs.aspx
  • Don't make any untrue statements to the government on any form or report.

Below are the most common reasons nonprofit filings are rejected by the Secretary of State's office. For further details and instructions, visit the Ohio Secretary of State's Web site
www.state.oh.us/sos

The Top 9 Reasons the Paperwork Was Rejected Approximate Yearly Average in Ohio
The name and address of the statutory agent (contact person) was not given. 853
The names of incorporators, members or partners were not given. 796
The business address of the corporation was not given. 624
The corporation's name was not different enough from existing organizations 128
The name of the nonprofit is not consistent throughout the form(s). 82
The organization's purpose did not meet the requirements to be considered a nonprofit. 59
The form was not signed by all of the incorporators. 40
The check was not enclosed. 23
The statutory agent (the "contact person" for all legal matters) did not acknowledge and accept the appointment. 23

Additional details are in the Formation of the Nonprofit portion of the Managing the Process section.

This is a complicated subject and site users should not try to set up any portion of a nonprofit corporation based solely on the information they find on this site. You should work with specialists in each area such as talking to an attorney or CPA.

Return to Page One of Basics

  • What exactly is a nonprofit?
  • Do you really want to form a nonprofit?
  • What types of things do you need to do?
  • What should you think about before starting a nonprofit?

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