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Cherie L. Evans, Partner, Evans & Rosen LLP

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Index of audio (running time 59:20)

  • 00:00 Introduction
  • 01:21 Background of Cherie Evans. Attorney, practicing in the area of non-profit law for six years. Many non-profits start with just a few words on paper. I’m going to teach you what those words should be, help you write down the right words, so that your non-profit can prosper and do all that it should be able to do.
  • 02:35 In five sections. (1) Definition of various types of non-profit and tax-exempt entities. Very important concept. Two parts to this, and you have to have both. Without the tax exemption, non-profits are not automatically tax exempt. First we’ll go through the world of non-profits, which is a creature of state law, then through the various types of tax exemptions, which is a creature of federal tax law and state tax law. (2) Pros & Cons of non-profit & tax-exempt status. (3) Step-by-step from Articles of Incorporation to tax exemption. (4) Alternatives to tax-exempt status.
  • 05:06 Under California state law, there are three types of non-profit corporations, there are unincorporated associations, and there are trusts. Will focus on one type of non-profit: the public benefit corporation, because this is generally what a 501(c)(3) is. These are the most common types (numbers refer to Internal Revenue Code sections:
    • 501(c)(3) - charitable organization
      • Public Charity
      • Private Foundation
    • 501(c)(4) - social welfare organizations
    • 501(c)(5) - labor & agricultural organizations
    • 501(c)(6) - business leagues
    • 501(c)(7) - social clubs
  • 05:55 One of the main features of both the public benefit and the religious corporation is that they cannot distribute corporate assets to members, whereas a mutual benefit corporation can upon dissolution distribute assets to members.
  • 07:34 Most people choose to incorporate for the reasons of liability protection.
  • 08:55 Charitable 501(c)(3) organizations are the most popular because they offer charitable tax deductions, and gift and estate tax deductions to donors. Two types: public charities (supported by a broad base of donors) and private foundations (supported by few donors). Public charities are thought to support the interests of the public because a lot of members of the public are giving to it.