Welcome to EO Radio Show – Your Nonprofit Legal Resource. I'm Cynthia Rowland, and EO Radio Show episode 141 is a refresh of episode 37, covering key questions to ask when thinking about launching a new charitable organization. Recently, I've seen a surge in interest from clients who want to incorporate a new charity. At the same time as I'm recording this episode, the federal government is still in shutdown. The IRS recently announced on October 21 that during the lapse in appropriations, applications for determination letters for tax-exempt status will not be processed. Even before the shutdown, applications had slowed. Generally, they could take a year or more to be processed. We have been seeing straightforward grant-making foundation applications being processed in about four months. Very small organizations with budgets of less than $50,000 and using Form 1023 EZ, we're getting their IRS determination letters a little bit quicker than the current state of play, but those organizations with substantial budgets had to plan on a long lead time before getting their IRS determination letter. Some new organizations will be comfortable beginning operations before the IRS letter is received, and that is feasible if there are grant funds available that are not dependent on that IRS determination letter. But for new charities that are depending on substantial contributions from individuals, grants from private foundations, or gifts from donor-advised funds, that IRS determination letter becomes more important. 

So, with all that being said, it is more important than ever for today's founders to carefully consider all the requirements for the startup of a new charity so that they can launch it as quickly as possible. This episode covers key questions to ask when considering forming a new nonprofit. In addition to the tax compliance concerns, there are also state law requirements and practical considerations to think about.

Show Notes:

Statement on IRS operations limited during the lapse in appropriations; regular tax deadlines remain | Internal Revenue Service

EO Radio Show Episode 1: Nonprofit Basics: Overview of Nonprofit Charitable Organization Types: Corporation, LLC, Trust, Association and Fiscal Sponsorship

EO Radio Show EP #2: Nonprofit Basics: Designators, Members, Directors, Officers: The Who's Who of Nonprofit Governance

EO Radio Show #3: Nonprofit Basics: Director Duties and Best Practices for the Typical Nonprofit Public Benefit Corporation

EO Radio Show EP #5:Nonprofit Basics: Navigating the Complex Rules That Describe A Public Charity

EO Radio Show EP #10: Nonprofit Basics: Setting up a New Charity for Disaster Relief

EO Radio Show EP #32: Nonprofit Basics: Insider Transactions and Nonprofits – What's the Big Deal?

EO Radio Show EP #33: Nonprofit Basics: Conflict of Interest Policies and Best Practices for Approving Insider Compensation

If you have suggestions for topics you would like us to discuss, please email us at eoradioshow@fbm.com. Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.