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My brother and some of his business friends have been raising money for the last few years for leukemia research. They have been reasonably successful at this endeavor, bringing in maybe $20,000 per year for this cause.

He now would like to run a raffle to raise additional funds for this cause, and his understanding is that under local law (New Jersey), he needs to form a 501(c)(3) organization to do so legally. He has requested my help with the appropriate IRS forms.

Can someone point me in the right direction? As soon as possible, I'd like to either get this taken care of or inform my brother that the assistance he's requesting is beyond my competence. Thanks. --Bob
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He now would like to run a raffle to raise additional funds for this cause, and his understanding is that under local law (New Jersey), he needs to form a 501(c)(3) organization to do so legally. He has requested my help with the appropriate IRS forms.

Can someone point me in the right direction?


This looks like a good place to start:

http://www.irs.gov/Charities-&-Non-Profits/Application-P...

Phil
Rule Your Retirement Home Fool
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TMFPMarti writes:

This looks like a good place to start:

http://www.irs.gov/Charities-&-Non-Profits/Application-P...


I reply:

Thanks! Exactly what I needed. --Bob
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Unless you have a full-time staff with a knowledgeable attorney, it can be very time-consuming. I, too, am in New Jersey and my church needs just a letter from the IRS stating that we are 501(c)(3). Now except for far out (I call them California) religions, all churches implicitly have that status, and we do. As treasurer, I need never file anything for the IRS even though we accept donations for religious purposes. But for soliciting contributions from some organizations, we need a letter from the IRS saying we are a 501(c)(3). We are all volunteers, but we got all the forms, and I produced many of the required reports. We also have access to a suitable attorney who will not do the work for free, but will review out work to ensure it is OK. There is a considerable fee payable to the IRS just to get the letter. We have been at this for about 5 years, but as our volunteers turn over, we must often start over near the beginning. And after a year, the required reports must be re-done. I suspect a full-time staff could do this in a year or so, but we will never have a staff.

And all this just to get it in writing that we are a 501(c)(3) outfit.
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You should be able to complete the paperwork for 501(c)3 status in less than a year, but your application will be a bit more challenging because you're already in existence and you have to document what you've done in the past few (I don't remember the specific number) years. The key is to get some volunteers who will devote significant effort to the process. It also helps to have someone with at least a passing familiarity with the IRS and its procedures.

Ira
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He now would like to run a raffle to raise additional funds for this cause, and his understanding is that under local law (New Jersey), he needs to form a 501(c)(3) organization to do so legally. He has requested my help with the appropriate IRS forms.

His understanding is mistaken. A 501(c)3 organization must register with NJ before it can hold a raffle. Other organizations can also register without filing for 501(c)3 status with the IRS.

You can atart your search for information here: http://www.state.nj.us/lps/ca/lgccc/lgc_registration.htm

Ira
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You should be able to complete the paperwork for 501(c)3 status in less than a year, but your application will be a bit more challenging because you're already in existence and you have to document what you've done in the past few (I don't remember the specific number) years. The key is to get some volunteers who will devote significant effort to the process. It also helps to have someone with at least a passing familiarity with the IRS and its procedures.

I agree about the 1-year stuff, but we have been unable to find volunteers willing to commit to the time involved. So there is a constant turnover, that results in pretty much having to start over each time. It is a pity because we are working on restoring our historic building (present one built in 1816) and many potential donors insist on a copy of an IRS letter that we are 501(c)(3) and in addition to all the paperwork, there is a fee that IIRC is around $1000, and even that will be a significant expense for us.

We have been in existence since before the IRS existed. In fact, since before the Constitution was signed. Our meeting was founded in 1665 here in what became the State of New Jersey. It was quite interesting legally when many churches had to become legal entities. Who were the legal owners of the properties? (Do not bother to answer that question: it is quite complex.)
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