These guidelines are supplied by Executive Service Corps of Chicago.  Once you have secured 501(c)(3) status, ESC can provide technical assistance relative to board and/or management issues.

 STEPS TO BECOMING A 501(c)(3)

Incorporate as an Illinois nonprofit corporation

1. You file Form NP-102.10 Articles of Incorporation along with a $50 registration fee to the Illinois Secretary of State. It should take two to four weeks for confirmation and receipt of your charter. Your agency’s name must be different from all other names on file. You can verify this by calling Springfield 217-782-9521 or write The Secretary of State, Centennial Building, Corporate Department, 3^rd Floor, Springfield IL 62756.
2. If you intend to file later for IRS tax-exempt status, Section 5 of your Articles of Incorporation MUST contain appropriate purpose, inurement and dissolution clauses. They must also be included in your By-laws. There is a standard language available (see supplement).

File with Recorder of Deeds

After you have received your charter from the Secretary of State, you should put it on file with the Recorder of Deeds in the county in which you are registered. There usually is a fee involved.

Register with State and Federal Offices

1. Apply to the IRS for a Federal Employee Identification Number (FEIN). This will take about four weeks to process. It is required on all federal and state tax reporting forms. You may expedite the process by calling the IRS in Cincinnati, OH, 1-800-829-4933 or FAX 1-859-669-5760.  They will supply the number over the phone, but you will still have to send the required SS-4 form to IRS Service Center, ATTN: EIN Operation, Cincinnati, OH 45999.
2. Apply to the Illinois Department of Revenue on Form NUC-1. If you have already received your FEIN number (see 1 above), that information foes on the Illinois form. If you have filed but are waiting for your assigned number, mark the form “applied for” in the appropriate space.
3. Both Illinois and IRS will send you Forms IL94 and IRS-941 respectively at the end of each calendar quarter on which you must file tax-withholding information. Even if you have no paid employees you should still file the forms and mark “no employees.”

Application for Tax Exempt Status (IRS Publications 557, 1023 and 1024)

Most contributors to your agency will expect you to have qualified as a 501(c)(3) corporation with the IRS. To obtain this status, you must complete IRS Form 1023 found in the instruction book (1023). It is strongly recommended that you use the services of a knowledgeable attorney for this step. You must include a two-year proposed budget, your FEIN number, a copy of your Illinois Charter and a signed and dated copy of your By-laws.

Form 872-C in the back of the book must also be included. This form allows IRS to assess your organization for excise taxes as a private foundation if you somehow do not qualify as a tax-exempt public charity. Finally, you must include Form 8718 plus a $150 filing fee if your past or current contributions are less than $10,000. If they exceed this amount, the filing fee increases to $500. This application process can take up to six months for approval. In the meantime, you may indicate to prospective contributors that an “Application for 501(c)(3) exemption is pending.”

Illinois Sales Tax Exemption

 When you have been granted IRS 501(c)(3) status, you can then apply to the Illinois Department of Revenue for exemption from State sales tax. You will be assigned a sales tax exemption number. Until that is received, you will be required to pay all such taxes.

 SUPPLEMENT

Following are the articles of purpose, inurement and dissolution that must be included in your Articles of Incorporation.

Purpose – The Corporation is organized exclusively for charitable, educational, religious or scientific purposes within the meaning of section 501(c)(3) of the Internal Revenue Code.

Inurement of Income – No part of the net earnings of the corporation shall inure to the benefit or be distributable to its members, trustees, officers or other private persons except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered.

Dissolution – Upon dissolution of the corporation, the Board of Trustees, after paying or making provisions for the payment of all liabilities of the corporation, will dispose of all assets of the corporation exclusively for the purposes of the corporation in such a manner, or to such an organization or organizations organized and operated exclusively for charitable, educational, religious or scientific purposes as shall at the time qualify as an exempt organization or organizations under section 501(c)(3) of the Internal Revenue Code of 1986 (or the corresponding provision of any future United States Internal Revenue Law), as the Board of Trustees shall determine.

Organizations which can provide assistance:

Nonprofit Agencies

CPA’s for the Public Interest
550 W. Jackson, 9th Floor
Chicago, IL 60606
312-993-0407
www.cpaspi.org
Accounting assistance for emerging agencies

Donors Forum
208 S. LaSalle #735
Chicago, IL 60604
312-578-0090
www.donorsforum.org
Information library for funding sources

Illinois Industrial Commission
Workers Compensation Division
100 W. Randolph, Suite 8-200
Chicago, IL 60601
312-814-6500

Information Technology Resource Center
29 E. Madison, Suite 1005
Chicago, IL 60602
312-372-4872
http://itresourcecenter.org
Hardware/software information & training

National Council on Compensation Insurance
2050 W. Iles Ave.
Springfield, IL 62704
217-793-1100
Worker’s Compensation Insurance

Nonprofit Financial Center
www.nfconline.org
29E. Madison, Suite 1700
Chicago, IL 60602
312-252-0420
Publishes: Do it Right the First Time, Starting a Nonprofit Organization in IL

Support Center of Chicago
30 E. Adams St., Suite 1600
Chicago, IL 60603
312-263-5118
www.sc-chicago.org
Management workshops for nonprofit agencies

United Way/Crusade of Mercy
312-491-7823
Board Placement Program

Cook County Recorder of Deeds
118 N. Clark Street Rm. 120
Chicago, IL 60602
312-443-5050
Registering new corporate charter

Secretary of State Dept. of Business Services
Corporation Division
17 N. State Street, Suite 1137
Chicago, IL 60602
312-793-3380
or Corporation Division
Howlett Bldg.,
501 S. Second St., Rm. 315
Springfield, IL 62756
217-782-6961

IL Attorney General
Division of Charitable Trust & Solicitations
100 West Randolph, 3rd Floor
Chicago, IL 60601
312-814-2595
http://www.illinoisattorneygeneral.gov

IL Dept. of Employment Security
33 S. State St.
Chicago, IL 60605
Forms & General Assistance
1-800-247-4984
Tax Problems
1-800-247-4987

IL Department of Revenue
State of Illinois
Dept. of Revenue, Income Tax Division
100 West Randolph, 7th Fl
Chicago, IL 60601-3274
312-814-5232
or 101 West Jefferson
POBox 19001
Springfield, IL 62708
1-800-732-8866
To reach any other state agency not listed, call:
1-800-829-1040

Internal Revenue Service
Form Services Division
230 S. Dearborn
Chicago, IL 60604
1-800-829-3676
For form pickup only:
320 W. Washington, Room 611
Springfield, IL 62703
217-527-6000

* these general guidelines are for information purposes, the procedures can change, so be sure to contact the appropriate organizations for up to date details

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