Why does an American support aCharity outside the USA?

● Americans have lived in your country and supported you.● You are a school or university and your alumni live in America.● Americans who live outside the USA want to support charities where they live with US taxed income & get a tax deduction.● Your charity does work that particularly interests them.● Your charity does work that isn’t done by a US non-profit.● Some existing supporters of your charity have moved to the USA and want to support your charity from US taxed income.●Y our charity tours or exhibits in the USA and attracts American donors.

In 2013 the total giving in the USA was $316 billion.6% from Corporations.

7% from Bequests.

15% from Foundations.

72% from Individuals.

£316 billion by type of recipient organization:

TOP 3

#3

#2

#1

Human Services

Education

Religion(That’s $101.2 Billion!!!)

Annually on average each person in the USA gives

$694 per year.

what is a 501(c)(3)?501(c)(3) is a section of the US Internal Revenue Code. It means that an organization is exempt from taxation on its income and donations to it are tax-deductible to the individual or corporate donor. It also meets the legal needs of foundations as a grantee.

TAX DEDUCTION FOR EVERY DONATION

ILLUSTRATION OF US TAX DEDUCTION

Itemized deduction:

Mary earns $400,000 and she makes a donation of $10,000 to a local non-profit.

This reduces her taxable income to $390,000. If she pays tax at 35% this will

save her paying $3,500 tax which means the donation only costs her $6,500.

Without a tax deduction, a charity

stands little chance of receiving anything

other than the smallest of gifts.

Decision time

Option #1:Work with an Existing Public Charity

www.americanfund.info

www.chapel-york.com

Option #2:Set up a US Non-profit Organization

don’t fall at the first hurdle…Before forming a non-profit, the key is to find out if organizations (non-profit, for-profit, or government) are already doing the same or similar work in your community. It will be harder to get support if you are just duplicating existing services, versus improving or adding to them.

Before applying to the IRS for tax-exempt status, most organizations first become incorporated. First, a non-profit company is registered in one of the 50 states. The initial information required to form the company includes the name of the 501(c)(3), names and addresses of the members of the Board of Directors (at least three, a majority being US citizens with US addresses), Prepare and file your "articles of incorporation“, create bylaws that will dictate how the corporation is run and state information about the proposed activities and fund-raising plans.

A mission statement is not just for internal use or to submit to the IRS for tax-exempt status. It is a beacon that will attract new people and more resources to your cause. Make your mission statement compelling as well as clear. It will be your best public relations tool.

The IRS will be looking at your mission statement to see if your organization matches its requirements for that type of entity. Know what you are applying for and draft your mission to match the requirements.

Build an Effective Board

The state in which you incorporate your non-profit will set the guidelines for the minimum number of board members that should be on your board. A minimum of three is typical.

Every company incorporated in the USA is required by law to have a Registered Agent.

Next, the new company applies for 501(c)(3) status from the Internal Revenue Service. This is done through a Form 1023, Application for Tax-Exempt Status which is sent to the Internal Revenue Service with a package of related forms and information about the proposed 501(c)(3).

Negotiation with the Internal Revenue Service may be required before approval is finally granted. This is not an instant process and can take many months.

501(c)(3) status, when granted, is 'good' for all 50 states + DC.It is the 501(c)(3) status which confers exemption from tax on the organization and which means that donations to the organization will be tax-deductible.

While the IRS rejects slightly less than 10 percent of Form 1023 applications filed, nearly half are abandoned by the filer.

Here is some basic information and tips about fundraising registration. Be aware, however, that you'll need to do your homework on this issue and/or get legal advice for your particular non-profit.

- Register in your home state--this is called your state of domicile.- Register before you start fundraising.- Register in every state where you solicit funds. If you receive less than $250 in donations than $250 in donations from a particular state, don't register and do not send postal mail send postal mail or email to that state. It's too expensive to register where you receive where you receive little value. Several donation processing programs allow you to screen you to screen out states.- Follow the rules of each state for registration, reporting, documentation, etc.etc.- 38 states do accept the Unified Registration Form, but they often differ in the in the documentation that they require. So you can't just submit one registration to all of registration to all of those states and forget it. You'll need to customize each registration each registration with the required documents.- In most states that require registration, you also have to renew annually. Each state's annually. Each state's requirements are different and deadlines for renewal vary. Fees for renewal vary. Fees for registration differ state to state.

Even if you only raise funds online, there is still no escape from state registration.

New Tax Return Makes

Nonprofit Fundraising

Registration

Unavoidable

If you do not register properly in other states before you fundraise, your organization risks penalties and even felony charges.

A helping hand…

Because the rules for state registration are not uniform, and in fact are in flux, and the paperwork and staff time to keep up is so onerous, many charities contract with third parties to take care of the chore for them.

BE CLEAR & STAND OUT

BUILD AN EFFECTIVE

BOARD

APPOINT A

REGISTERED AGENT

FORM 1023

NOT AN INSTANT

PROCESS

501(c)(3) STATUS, WHEN

GRANTED IS GOOD FOR

ALL 50 STATES + DC.

FOLLOW THE RULES FOR

EACH STATE

RENEW ANNUALLY

ONLINE DONATIONS –

STILL REGISTER

ESPECIALLY IN FLORIDA

AND NEW YORK.