Filing for 501(c)(3) Status

To get 501(c)(3) status as a non-profit, you will need to file IRS form 1023. I can break the experience down in two comments: (1) time-consuming and (2) expensive.

I can't remember where, but I recall having read that one should expect this to take over 80 hours. From my experience, this is shaping up to be realistic. The form covers many aspects of your non-profit "business" and almost feels like a mini business plan. As mentioned in a previous post, this kind of requirement is beneficial in that it forces you to think about your business. The information in the 501(c)(3) registration also becomes publicly accessible, which means that it can be used to support various efforts towards building your organization. However, it can also feel like a burden, distracting you from your regular efforts. As you start up your non-profit, be sure to plan around the amount of time it will take to complete this. Be sure to start early and make consistent progress because you don't want to miss a big opportunity to further the purpose of your organization just because you didn't get 501(c)(3) status in time. With this information becoming public after filing, you also need to put the right amont of thought and effort into it to ensure that it is of reasonably high quality.

To share an challenge we've faced, we have found that getting our state and local licenses to conduct our activities as a non-profit requires us to file documentation of our 501(c)(3) status. The licensing office also wanted the documentation within a week. Because of this, we had to call the licensing office and ask for an extension so we have time to get our 501(c)(3) status. Fortunately, they were understanding, but this illustrates some of the potential for trouble when the 501(c)(3) status isn't prepared early on.

One thing you might do to make the filling out and filing the 1023 faster is to create a business plan early on. This is something you should do anyways. A non-profit is a type of business, and all business leaders should know and understand their respective businesses to the degree of intimacy required by the process of creating a business plan. While a business plan is not strictly required, and there are businesses that are successful without such documentation, it is a good practice and will almost certainly be worth the effort.

Regarding the costs of filing for 501(c)(3) status, you will need to pay at least $400. You can find the amount applicable to your situation by going over IRS form 8718, which needs to be filed with your 1023. This may not sound like a lot to everyone, but for us it is a good amount. Add to that the expenses of state and local registrations for incorporation, licensing, etc. It probably won't break the bank, but be sure to plan for these costs ahead of time.

In summary, I would strongly encourage you to really think about the kind of organization you need to create to drive your mission. Before jumping into registrations, think about whether they are required and whether the time, money, and effort needed to complete them is worth the benefit they provide. Ask yourself whether those resources would be better spent on activities that further your mission. If you are getting started, we have the following recommendations:

1. As soon as you become serious about your idea, create a business plan
2. Be sure to think about the best way to achieve your vision
3. Carefully plan a timeline for the registrations you'll need along with the resources they'll require
4. If you are going to apply for 501(c)(3) status, take a look at the IRS's step-by-step guide to get an idea of what is required

Progress To Date

We have made great strides in recent months in terms of developing our organization. As we move forward with becoming an officially recognized entity, there is much to do with respect to registrations, documentation, etc. All in all, the efforts we are making to meet various requirements is positive in that it makes us think deeply about aspects of our "business" that we may not have had to consider previously.

One example is financials. Since we are operating as a group of volunteers, we have had virtually zero costs. However, there are very likely to be expenses involved in expanding our programs. As with for-profit businesses, all financial transactions will need to be closely tracked and reported every year. As our understanding of our financials develops, we are likely to benefit from being able to analyze the data and over time ensure that future programs will be sufficiently funded.

To date, we have registered ourselves in the state of Washington and are currently waiting on our state and city licenses. We are working on forming our bylaws and in the near future will be applying to become a 501(c)(3).

The Origins of a Non-Profit

Two years ago, we started out as a few co-workers who got together with the idea that our other colleagues would appreciate the opportunity to learn social dance in a non-intimidating environment. We also wanted to provide ourselves and other non-professional dancers with an avenue through which to explore teaching.

It was never was and still is not our intention to disrupt existing models of professional dance instruction. Rather, it has been our aim to compliment such services by providing an entry-point to experiencing social dance. In fact, we hope that our efforts will provide growth within the dance community, which should lead to an increase in business for professional dance instructors.

Over time, our philosophies and understanding of why we dedicate our time and energy to this effort have progressed, fueled by endless conversation amongst ourselves and plenty of positive feedback from those who have taught and learned with us. We came to realize that we didn't want to limit the scope of our impact to just our co-workers and set our sites toward the more ambitious vision of reaching the entire community in which we live, and hopefully some day the entire world!

As such, we started to organize our loose-knit group some months ago, testing organizational structure and developing operational processes. At this point, we feel ready to take the next big step, as we proceed to form an official non-profit organization.

Move with the Music

We are a small group of friends who have a simple vision: "Everywhere there's music, everyone is dancing".

The benefits of dance are endless both mentally, phsyically, and socially. Yet, there are a multitude of barriers that restrain many people from experiencing the magic that dance can bring into one's life. Such barriers include economic factors, physical capabilities, social stigma, etc.

It is our goal to overcome these barriers to introduce dance into the lives of others. We understand that not everyone will fall in love with dancing, but for some, being exposed to dance will change their lives. It is our mission to make sure that everyone is given the opportunity to have this experience.