Legal Requirements Slides before 1st Section Divider Requirements: Heart of the Valley 501C3 Investigation Report HOTV ByLaws Mission Statement: File for Status ByLaws Incorporation Bank Account Record Retention
What is a Non Profit? Wiki describes it as: an organization whose primary objective is to support some issue or matter of private interest or public concern (such as the arts, charities, education, politics, religion, research, or some other endeavor) for non commercial purposes. There are different kinds of nonprofits, one of them being a 501(c)(3), which is exempt from income and (sometimes) property tax, and able to receive taxdeductible charitable contributions. Before you spend your money, at least consult with an attorney who is experienced in the area of nonprofit law so that you do not make one of the many major mistakes that people make when they try to incorporate by themselves.
501(c)(3) Charitable Advancement of Education or Science. Lessening Neighborhood tensions??? Educational Include organizations that conduct public discussion groups, forums, panels, lectures, or similar program. Religious?? Organizations that normally receive not more than one third of their support from gross investment income and more than onethird of their support from contributions, membership fees, and gross receipts from activities related to their exempt functions. Organizations that support other public charities.
501(c)(7) Gross receipts from non membership sources. A section 501(c)(7) organization may receive up to 35% of its gross receipts, including investment income, from sources outside of its membership without losing its tax exempt status. Of the 35%, up to 15% of the gross receipts may be derived from the use of the club s facilities or services Donations to exempt social and recreation clubs are not deductible as charitable contributions on the donor s federal income tax return.
Does HOTV Qualify as a Charitable Organization? Yes! HOTV is a Charitable and Educational Organization: Created Oregon s first homebrew competition, in 1981. It holds public brewing demonstrations, raises money for local charities and will continue to have public education as part of our core mission. Educational assistance in the form of Higher Education Scholarships. BJCP education and certification. Should it be a core part of our mission?
Formulate a mission statement. As a non profit organization, you exist to accomplish your mission, which should be crafted based upon your purpose, services and values. The mission statement is a concise expression that covers in one or two sentences who the organization is, what it does, for whom and where. It should also be compelling, as it will be used in all published materials, funding requests and public relations. It should also portray how your organization is distinct from others.
The Heart of the Valley Homebrewers are dedicated to promoting mental health, sanity in the public through the use of alcohol and achieving victory over mental illnesses through advocacy, education, research and brewing; The Heart of the Valley Homebrewers purpose is to strengthen our brewing community by providing technical brewing assistance in the forms of brewing research, brewing informational materials, and Fermentation Science financial aid. The mission of Heart of the Valley Homebrewers is to organize, encourage, and educate the public and consumers in Oregon. HOTV supports and promotes the breweing sciences through peer directed and operated services, advocacy, economic development, and participation in public brewing health policy design. Don t Drink Bad Beer!
Create a Board of Directors. Forming a board requires careful thought and extensive recruitment efforts. Each state has regulations that determine the minimum size of the board, typically three, but the optimum number of people who sit on the board should be determined by the needs of the organization. Based on what your organization would like to accomplish, you should decide what special skills and qualities you will require of the individuals on your board. Identify qualified individuals who are supportive of your mission and are willing to give of their talents and time.
Organized A 501(c)(3) organization must be organized as a corporation, trust, or unincorporated association. An organization s organizing documents (articles of incorporation, trust documents, articles of association) must: limit its purposes to those described in section 501(c)(3) of the IRC; not expressly permit activities that do not further its exempt purpose(s), i.e., unrelated activities; and permanently dedicate its assets to exempt purposes. Operated Because a substantial portion of an organization s activities must further its exempt purpose(s), certain other activities are prohibited or restricted including, but not limited to, the following Political etc Exempt purpose To be tax exempt, an organization must have one or more exempt purposes, stated in its organizing document. Section 501(c)(3) of the IRC lists the following exempt purposes: charitable, educational, religious, scientific, literary, fostering national or international sports competition, preventing cruelty to children or animals, and testing for public safety.
HOTV ByLaws Bylaws are not required to file for 501(c)(3) status. However, Organizational Documents do. Articles of Incorporation Our Bylaws do need to be updated with specific details about our organization. Legal Opinion will be provided. Do early in process.
Legally, you must save all Board documents including minutes and financial statements. It is necessary to preserve your important corporate documents, including board meeting minutes, bylaws, Articles of Incorporation, financial reports, and other official records.
Recordkeeping Section 501(c)(3) organizations are required to keep books and records detailing all activities, both financial and nonfinancial. Financial information, particularly information on its sources of support (contributions, grants, sponsorships, and other sources of revenue) is crucial to determining an organization s private foundation status. See Publication 4221 PC and 4221 PF, Publication 557, and the instructions to Forms 990, 990 EZ, and 990PF for more information. Filing Requirements Annual Information Returns Organizations recognized as tax exempt under section 501(c)(3) of the IRC may be required to file an annual information return: Form 990, Form 990 EZ, or Form 990 PF along with Schedules A and B. Certain categories of organizations are excepted from filing Form 990 or Form 990 EZ including churches and very small organizations. See the instructions with each of these forms for more information. Annual Electronic Notice Small organizations are not required to file Form 990 if their gross receipts are normally $25,000 or less. Beginning in 2008, however, these organizations must submit an annual electronic notice using Form 990N, Electronic Notice (e Postcard) for Tax Exempt
File Articles of Incorporation. Articles of Incorporation are official statements of creation of an organization filed with the appropriate state agency. They are important to protect both board and staff from legal liabilities incurred by the organization, making the corporation the holder of debts and liabilities, not the individuals and officers who work for the organization.
File FORM SS 4 An employer identification number (EIN) is your account number with the IRS and is required regardless of whether the organization has employees Include the organization s EIN on all correspondence to the IRS Apply for an EIN by completing Form SS 4, Application for Employer Identification Number, by calling toll free (866) 816 2065, or by submitting an online version of the form via www.irs.gov. Form SS 4 is available at Social Security Administration offices, by request through the IRS at (800) 829 3676, and by downloading the form from the IRS Web site at www.irs.gov. For more information about EINs, see Publication 1635, Understanding Your EIN.
FORM 1023 Complete Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, and mail to the address indicated in the instructions The required user fee must accompany Form 1023 The IRS will not process an application until the user fee is paid FORMS 2848 and 8821 Attach Form 2848, Power of Attorney and Declaration of Representative, if someone other than your principal officer or director will represent you on matters about the application Attach Form 8821, Tax Information Authorization, if you want the IRS to be able to provide information about your application to an employee other than a principal officer or director
NO Yearly Audit Requirement! Included with Form 1023 1.Receipts and expenditures for current year and 3 preceding years. 2.For each accounting period you must describe the sources of your receipts and the nature of your expenditures.
Annual Accounting Period Exempt organizations must keep books, reports and file returns based on an annual accounting period called a tax year. A tax year is usually 12 consecutive months. Organizations that want to specify an annual accounting period generally do so in their bylaws. There are two kinds of tax years: Calendar Tax Year This is a period of 12 consecutive months beginning January 1 and ending December 31; or Fiscal Tax Year This is a period of 12 consecutive months ending on the last day of any month except December.
Budget Develop a budget. Creating a budget is often one of the most challenging tasks when creating a nonprofit organization. A budget is the expression, in financial terms, of the plan of operation designed to achieve the objectives of an organization. Start looking at the budgeting process by looking at potential income figure out how much money to spend. We have figures. Can we do better?
Established bank account! Is HOTV using the accrual or cash method of accounting? The difference between the two types of accounting is when revenues and expenses are recorded. In cash basis accounting, revenues are recorded when cash is actually received and expenses are recorded when they are actually paid (no matter when they were actually invoiced). In accrual basis accounting, income is reported in the fiscal period it is earned, regardless of when it is received, and expenses are deducted in the fiscal period they are incurred, whether they are paid or not.
Fulfill charitable solicitation law requirements. Keep doing what we are doing! Be a benefit to the public! NEW! 2008 Electronic Annual Report, basically, the major headings in our books. Filed electronically via web. Legitimate business expense. State of Oregon Annual Report. Public Inspection of Exemption Applications and Returns. Apply for a nonprofit mailing permit. File for state and local tax exemption. In accordance with state, county, and municipal law, you may apply for exemption from income, sales, and property taxes. Register and renew annually with the Secretary of State, Corporation Division.
BY LAWS ARTICLE I PURPOSE Section 1 Purpose The Heart of the Valley Homebrewers exists as a means for members to enjoy and learn about beer and brewing. Section 2 Goals To engage in social activities focused on homebrewing and/or craft beer as a common foundation. To learn more about beer, beer evaluation, and brewing techniques. To promote the hobby and enjoyment of homebrewing. To promote the responsible use and enjoyment of alcoholic beverages. ARTICLE II MEMBERSHIP Section 1 Eligibility All persons are eligible for membership. Section 2 Acceptance Prospective members need only make initial application and keep annual dues current. Section 3 Non Discrimination Membership in the Heart of the Valley Homebrewers shall not be denied to any individual on the basis of race. color, creed, national origin, sex, physical handicap, or age. Section 4 Participation Members will recognize that participation in Heart of the Valley Homebrewers activities is entirely voluntary. Participation in these activities may include the consumption of alcoholic beverages which may affect perception and reactions. Members will accept individual responsibility for their conduct and behavior. The Heart of the Valley Homebrewers will neither assume or accept responsibility for an individual's actions. Amendment to Section 4 Participation Members or guests not of the legal age to consume alcoholic beverages in the State of Oregon may not consume such beverages at Heart of the Valley Homebrew Club meetings or activities. Section 5 Rights and Liabilities of Members Each regular member of the Heart of the Valley Homebrewers shall have the right to vote on club matters. Voting rights for other types of members are described in Article II, Section 6. Individual members of the Heart of the Valley Homebrewers shall not be personally liable for debts or obligations of the club. No member shall receive compensation for services rendered to the club except as otherwise approved by the officers of the club. A member may be reimbursed for expenses reasonably incurred on behalf of the club, subject to approval of the club officers. Section 6 Types of Membership REGULAR MEMBERS: open to all persons per Article II, Sections 1 and 2. ASSOCIATE MEMBERS: open to all full, or equivalent members of another homebrew or beer appreciation club approved by the officers for this purpose. The approved club must have a similar arrangement for full members of the Heart of the Valley Homebrewers. Associate members are not eligible to become officers. Associate members may not represent the Heart of the Valley Homebrewers in any club competition or similar type event as determined by the officers. Dues for an associate member shall be set by the officers at a rate less than the dues for a regular member. INSTITUTE MEMBERS: the officers may award institute membership to organizations or companies in exchange for services or other benefits to the Heart of the Valley Homebrewers or its members. Institute members shall not have voting rights and are not eligible to become officers. LIFETIME MEMBERS: lifetime membership may be awarded to individuals in recognition of extraordinary contributions of service to the Heart of the Valley Homebrewers. Lifetime membership shall be offered upon a vote of club membership in approval. ARTICLE III VOTING Section 1 Eligibility All members with voting rights as described under Article 11 and who have paid current dues, shall be eligible to vote. Section 2 Items Put To Vote The following items will be decided by a vote of the membership at a regularly scheduled meeting: New lifetime memberships Election of officers Changes in by laws Spending of funds greater than an amount set annually by a vote of the membership Any other issues offered by an officer Section 3 Quorum Any number of regular members at a regularly scheduled meeting shall constitute a quorum. Section 4 Election Dates Elections shall be held annually in November, with new officer taking office in January. Sections 5 Nominations Nominations shall be made by a nominating committee appointed by the officers or may be made by any member. Section 6 Voting Method Elections for officers shall be by controlled ballot. Votes on other issues may be conducted by any appropriate method that insures a fair determination of a majority decision of eligible voting members as determined by the officers. ARTICLE IV OFFICERS Section 1 Officers The following positions shall constitute the officers of the Heart of the Valley Homebrewers: President Vice President Secretary/Newsletter Editor Treasurer Festival Chair Section 2 Responsibilities of Officers President this officer will normally conduct the meetings. He or she will be responsible for securing the meeting place. The president will also be responsible for planning the meetings and arranging for topical discussions, demonstrations, or guest speakers. This officer shall review the financial records of the club on a regular basis. Vice President this officer will assist the president. He or she will organize the tasting portion of the meeting and insure that there is an adequate supply of beer. He or she will also coordinate the organization of the annual picnic and holiday party. Secretary this officer will edit and publish the club newsletter. The secretary, with assistance from the treasurer, will maintain the membership list. He or she will correspond with other clubs and appropriate bodies relative to club matters. Treasurer this officer will handle the club finances. The treasurer collects the dues and sees that they are deposited in the club's account. He or she is responsible for disbursement of funds for approved expenditures and keeps the financial records. The treasurer is also responsible for reporting on the club's financial status. Festival Chair Ð this officer will coordinate the annual festival and homebrew competition. Section 3 Eligibility Any regular member, as per Article II, Section 6 A may be elected. Section 4 Removal Any officer of the club may be removed by a vote of a majority of the members. Notification to the membership that an election will be held on the removal of an officer must be included in the regular notice of the monthly meeting. The remaining officers shall select a replacement for the position of the removed officer. Section 5 Resignation Upon resignation of any officers the remaining officers shall select a person to fulfill the responsibilities of the resigning officer for the remainder of the term. Section 6 Terms of Office Elected officers terms shall be for one year. There is no limit to the number of terms an elected officer may serve as long as he or she is elected in accordance with Article III. ARTICLE V NON PROFIT STATUS Section 1 Non profit Status The Heart of the Valley Homebrewers is declared to be a nonprofit organization. This does not give the club tax exempt status under the rules of the United States Department of Internal Revenue unless applied for and received at a later date. ARTICLE VI FINANCES Section 1 Dues Dues are paid annually in January or before the ensuing calendar year. The dues amount is set by the officers. When current members pay their dues, they must pay the dues for their type of membership, for the full calendar year. New members will be charged full dues for their type of membership if they join in the first half of the calendar year. Dues for new members joining in the third quarter of the calendar year will be one half of the full dues for their type of membership. Dues for new members joining in the last quarter of the calendar yea will be charged full dues for their type of membership which will be good through the following year. Section 2 Payments Dues will be collected by the treasurer. Dues may be paid in cash, money order, personal check, traveler's check, or any other cash based negotiable media. Section 3 Reporting The treasurer shall be prepared to report the financial status of the club at the regular meeting. He or she shall cooperate fully with the president in any audit or review of the financial records. ARTICLE VII MEETINGS Section 1 Meetings of Members The Heart of the Valley Homebrewers shall meet monthly unless otherwise advised by the officers. Section 2 Notification An appropriate method for notifying members of the time and place for the monthly meeting shall be established. ARTICLE VIII BY LAWS ACCEPTANCE Section 1 Acceptance These by laws are accepted at the time of adoption by a majority vote of current members. Section 2 Amendments or Changes. Any member or members may petition for a change or amendment to the by laws. The petition must be presented in writing and introduced at a regular meeting. The proposed changes or amendments shall be published for review by the membership, in the newsletter or by a special mailing to all members, at least thirty days prior to the meeting at which the changes will be voted on. Amendments or changes must be approved by a majority vote of all current voting members. FINIS Heart of the Valley Homebrewers acknowledges and thanks the Oregon Brew Crew for permission to excerpt portions of their by laws for our use. 1995 2008 HOTV
What do we want to do???