Horizons
Segment III - $10,000 Capacity Building Grants
Congratulations for your work with the Horizons program!
You have accomplished a great deal and have much to be proud
of. The Northwest Area Foundation would like to provide you
now with dollars to continue with your efforts and ideas.
There are
two opportunities to access this $10,000 for your community; the
first $1500 by November 30, 2009 following your community
visioning, and the second $8500 by May 31, 2010 following your
completion of the program and final report. A special form has
been developed for each time and is available here:
The
question has been raised by a number of communities as to where
they will put this money and this page will provide an
overview of some of the options. It will be up to each
community to make the final decision as to where their dollars
will be placed and what they will be used for. We are here to
help guide you and answer questions along the way.
The North
Dakota Community Foundation (www.ndcf.net)
will hold your $10,000 until you send your applications to them
on the dates listed above. They MUST transfer the dollars to
your community through a 501(c) (3) nonprofit organization OR a
government entity. The options listed below may help each
community determine the best route for them.
-
Option 1
– Put funds into a
government entity (city, county, or school) and ask that they
have an expenditure line for continued Horizons community,
leadership and poverty reduction work. If you choose this
option, you do NOT need to attach a copy of the 501(c)(3)
determination letter as stated on the application.
Please DO list county, city or school board members
(whichever entity is receiving the money on Horizons'
behalf) and indicate that they are county commissioners,
city councilpeople, etc. There is also no need for a
financial statement in this case. The check will be
written directly to the government entity requested on
behalf of Horizons.
-
Option 2
– Put funds into a current 501(c)(3) in the community and ask that they have an
expenditure line for continued Horizons community, leadership
and poverty reduction work.
-
Option 3
– Set up your own
501(c)(3) non-profit organization for your community for
community, leadership and poverty reduction work (more on
non-profits in this document).
-
Option 4
– Set up a long-term endowment fund for your community and spend
a portion of it each year on community, leadership and poverty
reduction work (more on endowments in this document).
What
should a community think about when considering a non-profit?
Becoming a
nonprofit will require some time and effort and staying legal
throughout the process is important. North Dakota has a 68 page
guide online to assist at
http://www.nd.gov/sos/nonprofit/registration/corporation/index.html,
and this the following provides a brief overview of the major
steps:
-
Develop a purpose and mission. The purpose of a charitable
nonprofit must be for the public interest and common good.
You should analyze what you want to do, who you want to
reach and develop a good mission statement to guide you
through formation, program development, growth and change.
-
Recruit board members. The initial board of directors will
assume the responsibility for starting this nonprofit.
They will write Articles of Incorporation and approve the
original bylaws.
-
Check
on availability of a name – a unique name must be developed
for your new nonprofit. The cost to reserve a name in North
Dakota is $10.
-
Write
the Articles of Incorporation – this will be the legal
beginning of your nonprofit organization. Refer to
(http://www.nd.gov/sos/nonprofit/registration/corporation/index.html)
for this. An Articles of Incorporation form is necessary
with the appropriate fees ($30-$40).
-
Incorporate as a nonprofit – Once all paperwork is filed
with the ND Secretary of State’s office
(http://www.nd.gov/sos/nonprofit/registration/corporation/index.html),
the organization will receive a Corporate Charter from the
ND Secretary of State.
-
Create
a business plan and budget
-
Draft
organizational by-laws
-
Hold a
board meeting to begin tackling the mission and start the
process of obtaining tax-exempt status.
-
Apply
for and obtain tax exempt status from the IRS (www.irs.gov)
-
You will need IRB Publication 557 – Tax-Exempt Status
for your Organization. It has no forms to file but does
lay out the federal laws regulating tax-exempt
organizations.
-
Get copies of IRS Form 1023 and Form 8718 – Application
for Recognition of Exemption under 501(c) (3) of the
Internal Revenue Code. The filing fee is $750 for
organizations anticipating gross receipts averaging more
than $10,000 during its first four years and $300 for
organizations anticipating gross receipts averaging less
than $10,000 during its first four years.
-
Complete annual filing at the federal and state levels.
For more
information on non-profits, contact the North Dakota Association
of Non- Profit Organizations (NDANO) at 1-701-258-9101 or visit
their website at http://www.ndano.org
What
should a community think about when considering an endowment
fund?
A community
permanent endowment fund can be started from which only the
interest earnings may be used in the community each year. It
serves as a “long-term savings account” for the community and
can seek outside financial support from federal, state and
private sources. All segments of a community can benefit from
an endowment fund and these endowments are often called
community foundations. Items to consider in starting a
community endowment fund:
-
Apply
for non-profit status – there are options in most
states besides starting your own non-profit for a
community foundation. Often states have a larger umbrella
community foundation that will oversee the funds, file the
appropriate paperwork with the IRS and deal with the
non-profit requirements. The North Dakota Community
Foundation will assist with this if a community is
interested. See
http://www.ndcf.net
-
Develop a mission statement
-
Set
short and long term goals around fund raising – how much
money should your community raise in order to give away
enough interest each year to make a difference?
-
Adopt
by-laws
-
Distribute materials describing the community foundation –
these materials can be a brochure developed in the
community, a website, a newsletter, or basic information in
the local paper.
-
Get
contributions – these contributions can come from past
residents, mail campaigns in the community, part of estate
plans.
For more
information on setting up a community foundation, please contact
the North Dakota Community Foundation at 701-222-8349 or visit
their website at http://www.ndcf.net
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