A huge part of establishing a 501c3 tax exempt non-profit organization is dealing with who will run it. No one does it alone, and in most states a board of directors is needed to run an organization smoothly. Forming a board of directors can seem simple ? just pick a couple of friends and relatives and there you go!
For the good of the organization?s future and your chances of qualifying for 501c3 tax exempt status, this is not a great idea. It?s important to understand how you can develop a board of directors that cares about your goals.
Look at Your Mission
All great companies, whether they?re for or not for profit, have mission statements in which they spell out what the organization exists for and how they plan to accomplish it. Shorter than a business strategy, a mission statement for a non-profit ought to be concise and to-the-point, and forming a board of directors should circle about what the mission statement says. Only by going back to your mission can board members who care about that mission are chosen, which is in the greatest interest of the organization and its future.
Research and Recruit
One thing many non-profits need to consider when selecting a board of directors is that the research and recruitment needed to select suitable candidates can be extensive. Search for well-known and well-publicized local members of the community that have the time and the passion to pursue a non-profit with your mission statement. It?s important to discover individuals who can get things done but are also passionate about your purpose. These people might not necessarily be people you already know or even like personally, but they?ll be best for the organization.
Do the Paperwork
Once the board members have been decided and are on board using the non-profit project, it is essential to get it in writing. An attorney ought to assist you to work out contracts or agreements with each board member and then write up bylaws with the entire board. Filing for 501c3 tax exempt status for your non-profit requires proof of every board member?s representation as well as proof of their salary agreement to make sure not too much of your profit is going to salaries. One of the reasons it is essential to choose people that aren?t close to you is that the IRS investigates heavily signs for conflicts of interest or likelihood of fraud when granting 501c3 status.
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Source: http://rawbusinesslaw.com/2012/02/08/501c3-organizations-the-board-of-directors-business/
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