Once you have set up a Delaware Exempt corporation—also known as a non-profit corporation—you will need to file an application for non-profit status with the IRS.
Part of your application should include your non-profit corporation’s mission statement. The mission statement is generally a statement of what your organization wants and aims to accomplish.
Your non-profit corporation’s mission statement can either be straightforward and simple or intensive and complex; however, since it is typically included in much of the non-profit corporation’s marketing material as well as funding requests, it should be as compelling as possible.
Simply stating that your goal is to “feed the hungry” is not a good idea; be smart, be strategic and be specific--you want to be sure your organization will stand out so as to raise as much money as possible for your charity.
Instead of a broad, undefined mission statement like “feed the hungry,” try one like this: “We aim to reduce the number of hungry people in the Mid-Atlantic region of Delaware through the funding of mobile soup kitchens.” See the difference?
Whether or not your corporation is considered a non-profit, as opposed to a for-profit entity, depends on your surplus income; any surplus income derived from a non-profit entity must be used to further the mission of the non-profit corporation.
In other words, any income left after payment for day-to-day operations cannot be transferred to shareholders, employees or directors of the corporation.
The next step that is essential to the 501 (c)(3) is the IRS application. The application is generally completed and filed with the IRS. You can process the application on your own or with the help of a tax professional or a certified public accountant. The IRS offers assistance via a 14-page instruction manual.
IRS Form 1023 is the application for Recognition of Exemption under Section 501(c)(3). This 31-page application is very intricate. There is also a 1023EZ form that can be processed, which is the streamlined application for Recognition of Exemption under Section 501(c)(3).
The IRS introduced the 1023-EZ to help small charities apply for the 501(c)(3) tax exempt status more easily. IRS Commissioner John Koskinen was quoted as saying:
“This is a common-sense approach that will help reduce lengthy processing delays for small, tax exempt groups and ultimately larger organizations as well. We believe that many small organizations will be able to complete this form without creating major compliance risks.”
With this new application, the process is easier and faster to complete.
We are happy to assist with the formation process of a non-profit corporation in Delaware. The application process takes about five minutes for us to complete by phone.
The most difficult questions our staff will ask is the name of the company you would like to create and the mission statement for your new non-profit corporation.