Establishing a new Fuller Center Covenant Partner organization may seem like a daunting task, but as with so much in life, it is a relatively simple process when broken into individual components. The following will provide you with a step-by-step process to setting up your new nonprofit.

Our goal with this, as it is with our general operating procedures, is to keep things as simple as possible. We stand ready to help with any questions you might have or problems you might encounter.

STEP ONE: FOUNDING BOARD

New charitable organizations begin when a few like-minded individuals set out to make a difference in some area of society. These people, along with others they recruit, make up the steering committee for setting up the new organization and are often member of the founding board.

STEP TWO: NAME & SERVICE AREA SELECTION APPROVAL

An organization’s identity is closely tied to its name, so the selection of a name is one of the more important early considerations of a new entity. The Fuller Center is a young organization, but it benefits from the recognition many have of Millard Fuller’s name. As the world-wide partnership grows many who are not familiar with the Fuller name will begin to associate it with its housing ministry.

The name should include The Fuller Center for Housing or The Fuller Center and be geographically descriptive of your service area.

The names The Fuller Center for Housing and The Fuller Center are owned by The Fuller Center for Housing, Inc. We will allow any Covenant Partner to use the names as long as that Partner remains committed to the provisions of the Partnership Covenant. A letter of authorization will be provided to all Partner organizations that chose to take advantage of the use of our good name.

You need to identify a service area that is small enough to adequately service and large enough to provide the financial and human resources your work will require.

Both the name and the service need to be submitted to The Fuller Center for Housing’s headquarters in Americus for approval.

STEP THREE: INCORPORATION

A Covenant Partner must be incorporated as a nonprofit corporation or a non-governmental organization under the laws of its jurisdiction. For US Partners this is typically done through the office of the Secretary of State or the State Corporation Commission. The process is generally a simple one. The applicant will be asked to provide Articles of Incorporation that include language and provisions specific to local law.

ARTICLES OF INCORPORATION

The Articles of Incorporation define the basics of the applicant organization. An important feature is the section on “Purposes” in which the applicant describes what the new corporation will be about. Other provisions create limits on what the corporation can do in order to qualify as a nonprofit and how the assets of the corporation will be distributed in the event it closes down. See Articles Template.

BYLAWS

The second founding document is the Bylaws, which should be written at the same time as the Articles. Some jurisdictions may ask for the Bylaws as a part of the incorporation process and the Internal Revenue Service will require that the Bylaws be submitted with a 501(c)(3) determination application.

The Bylaws are the basic rules and regulations under which the corporation will operate. They address such issues as membership, officers and directors, board structure and succession, meeting times, etc. They also contain a section on purposes which should repeat the purposes defined in the Articles. See Bylaws Template.

STEP FOUR: EMPLOYEE IDENTIFICATION NUMBER

Once the name has been selected and the incorporation process begun the new organization must secure an Employer Identification Number (EIN). Even if you don’t anticipate having paid staff, you must have and EIN in order to secure 501(c)(3) status.

Obtaining an EIN is relatively simple and can be done by Googling “EIN” on the internet and then going to the irs.gov page that comes up. You should not pay a service for securing your EIN as the process is simple and straightforward.

STEP FIVE: 501(C)(3) AND OTHER TAX EXEMPTIONS

501(c)(3) refers to the section of the Federal Tax Code that exempts nonprofit corporations from paying federal (and generally state) income taxes and allows donors to such corporations to deduct, within certain parameters, gifts made to them. 501(c)(3) status is established by a Determination Letter issued by the Internal Revenue Service. A copy of the determination letter can be provided to donors who request confirmation of 501(c)(3) status. There is no “tax number”.

Covenant Partners have two options for securing 501(c)(3) status:

(1) They can come under the group exemption held by The Fuller Center for Housing, Inc. This is done as a part of the application process. Once we have received your Articles of Incorporation and confirmed that they include the necessary language we will formally notify you of your acceptance under the Fuller Center group exemption. Organizations using the group exemption must use a July 1 to June 30 fiscal year.

(2) The Covenant Partner can apply for its own Determination Letter. This involves submitting IRS Form 1023 along with the organizational documents to the Internal Revenue Service. The process can take three to nine months. There is a fee of up to $900 depending on anticipated annual receipts. The application is somewhat cumbersome but can be completed by the applicant without securing paid consultation.

Donations made during the Determination process can still be deductible to the donor if made to The Fuller Center’s Americus office. 100% of donations received by us will be forwarded to the Covenant Partner with no fees deducted.

Some jurisdictions will also exempt a nonprofit from property and/or sales taxes. This needs to be confirmed with the local city, county/parish and state governments.

NOTE: Nonprofit status does not exempt the corporation from paying withholding, FICA and other employer-related taxes.

By following the steps outlined above you should be off to a good start and ready to go. For information on what’s next, please refer to our publication Getting Organized, Step by Step.

For additional help or information, please contact:

Stacey Odom-Driggers, sdriggers@fullercenter.org or

Cathy Smith, csmith@fullercenter.org