Building a Firm Foundation
By Kristin Sanford | Photo by Chris Redd
When Frank Hennessey moved to Marion County from Detroit, he had a vision. Having come to the area to pursue his passion of raising Arabian horses, Hennessey wanted to help others with a donation to the local charity foundation. To his surprise, there was no such place where people could reach out to those in need. More than a year later, the Community Foundation for Ocala/Marion County was founded under his leadership.
Tommy Thomas also saw a problem. Many local families face hardships, but make too much money to access much-needed community services. Thomas’ wife is a social worker and wanted to help those who otherwise couldn’t help themselves and had nowhere to turn. “We wanted to create a charity where everyone knew our mission, recognized our passion, and trusted our name.” Through Thomas and his wife’s hard work and dedication, Ocala Outreach Foundation was formed.
These stories are not unfamiliar as a declining economy and high unemployment rates have left many struggling to make ends meet. “Marion County has always been a giving community,” explains Barbara Fitos, Executive Director of Hennessey’s foundation. “Finding people to help is not a problem.”
Creating a nonprofit organization is a solution, but where does one begin the journey?
Leadership is key in any endeavor and is paramount when dealing with investing and dispersing money. Finding people to help spearhead a charity can be as simple as tapping familiar resources or as complex as recruiting people in the community who would be willing and able to assist in the day-to-day running of the operation. This initial group of people will eventually become the founding directors.
Florida Statute 617.080 states, “the board of directors must contain at least three members over the age of 18.” Once the board is named, research can begin.
“Do your homework,” urges Fitos. “We spent two years as an exploratory committee and traveled across Florida to see what others were doing. We went to Tampa, Orlando, and Gainesville and learned people were more than willing to share ideas.”
Thomas elaborates, “I got in touch with my best friend and we sat down with my wife to develop a plan – a mission.” Additionally, Thomas spoke to some friends in Miami who had an established foundation and found out how they did things. It’s wise to consult with people who have already been through and succeeded in the process. Essentially, the community, individuals and/or businesses are being asked to support a cause, and if the vision of the nonprofit is not well-defined, it could have an adverse effect on donations.
According to the Digital Media Law Project, an online resource produced by Harvard University, “you need to be clear about why you are investing time, effort and money into forming a nonprofit organization, not only for yourself, but because clarity of vision will help attract others to your nonprofit organization, whether as directors, officers, employees or donors.”
As the board of directors meet and begin to organize ideas, the blueprint for the foundation will begin to take shape and a name will be pondered. In Florida, a business name cannot conflict with any other registered name in the state. A search on the State of Florida Department of Corporation’s website, www.sunbiz.org, will help identify names already registered. Florida statutes dictate the name “must contain the word ‘corporation’ or ‘incorporated’ or their abbreviations and may not contain the word “company” or its abbreviation.” An online application for a fictitious name can be obtained and submitted at sunbiz.org. There is a $50 fee to register a fictitious name.
“The most important step in forming a foundation is incorporation,” says Thomas. Articles of incorporation are required to start a business in Florida and state statutes are specific on what must be contained in the documents. They can be filed online at www.sunbiz.org and the fee is $70. The information required when filing includes: the name of the corporation, the address for the business (this must be a street address. No P.O. Boxes), the name and address of the registered agent, the name and address of the incorporator, and the names and addresses of the members of the board of directors.
Nonprofit agencies are also required to have a registered agent on file, as well as a street address. According to the state Division of Corporations, a registered agent is the person who will accept legal papers on behalf of the business. An outside business or a member of the foundation can serve as the registered agent.
Next, charitable organizations must work with the Internal Revenue Service. Initially, an application for an employer identification number should be submitted and then the process to seek exemption can begin. To receive 501(c)(3) Tax-Exempt Status, form 1023 must be filled out and presented. As part of this process, the IRS says, “new organizations must give financial statements for the current year and proposed budgets for the next two years, including a detailed breakdown of revenue and expenses.” For more information on the requirements for a 501(c)(3), visit the Internal Revenue Service’s website at www.irs.gov.
Next on the agenda for the board of directors is to create bylaws. The Digital Media Law Project describes bylaws as “the rules and procedures for how a nonprofit corporation will operate and be governed.” In essence, they are the operator’s manual for the corporation. According to Blue Avocado, an online magazine for nonprofits, while bylaws differ from organization to organization, they generally should include, but are not limited to:
- The number of members that will serve on the board of directors and their duties;
- the number of members required to be present for official decisions;
- how long board members will serve;
- title and duties of officers on the board;
- how many meetings will be held, where and when;
- under what circumstances an emergency board meeting will be called;
- and how often bylaws will be reviewed and/or amended.
Because of their importance, it is essential the bylaws are updated every two to three years.
Each year corporations in Florida are required to file a report with the state. The Division of Corporations’ website says the annual reports are “used to update or confirm the Florida Department of State, Division of Corporations’ records.” These are not financial statements and are due by May 1 of each year. There is a $61.25 fee for nonprofits to file. Any corporation that fails to submit an annual report by September 3 will be revoked and will have to file for re-instatement with the Division of Corporations.
“A corporation shall keep as records minutes of all meetings of its members and board of directors, a record of all actions taken by the members or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.” – Florida Statute 617.1601
Record keeping is not only a necessity, it is a requirement and many nonprofits keep the information in a binder. According to the state, corporations must keep copies of the:
- accounting records and the names and addresses of all the board members in alphabetical order;
- articles of incorporation and all amendments currently in effect;
- meeting minutes for the past three years;
- written communications including the financial statements furnished for the past three years;
- names and addresses of its current directors and officers;
- and most recent annual report delivered to the Department of State
The board of directors will eventually hold an official organizational meeting where the bylaws will be approved, officers will be appointed, and accounts will be opened for the organization. Tapping local businesses and inviting them to come aboard with the corporation as sponsors is essential when fundraising is necessary. Initial investments, or seed money, can be gathered from “generous donors,” says Fitos. Thomas agrees, “it is group funding to its core.”
Not all nonprofit agencies are the same. Not only do they vary in the people or agencies they assist, they also can focus on assorted types of donors. For example, Ocala Outreach Foundation is “a source for people to help others” regardless of their income. As a corporation that depends on social media and the internet to gather support, Thomas spends a significant amount of time on its website, www.ocalaoutreach.com, encouraging visitors to give and help some of the many causes listed on the home page. Thomas says he prefers donors make a dedicated $5 “set it and forget it” monthly contribution.
On the other end of the spectrum lies Community Foundation for Ocala/Marion County. Touting itself as “a centralized portal for philanthropic giving,” it is a place where nonprofits can turn to help meet their needs. Their entry-level donations are set at $5,000. “We match donors to the causes they are most passionate about,” says Fitos. To get the word out, the foundation uses its website as well as Facebook and Ocoos, a small business site. “We also use a lot of one-on-one contact,” Fito explains.
Helping Hands, a charity founded by local realtor Brad Dinkins, offers a more hands-on approach to providing assistance. According to its website, “it was established to provide shelter and related assistance for the homeless and others who are in difficult situations.” The foundation also runs two apartment buildings to provide shelter to those in need with one serving solely women and children, as well as two thrift stores, The Helping Hands Thrift Store and The Treasure Shoppe.
Though every nonprofit is different in the way they conduct business, provide funding, and collect donations, there is one thing that remains the same amongst them all: dedication. “You have to love it,” says Thomas. Fitos agrees and adds, “If the passion is there, it’s not work. The bottom line is asking, ‘is this going to do something for the community?’” – and that makes it all worthwhile.
Once a nonprofit organization has been created, there are many resources available to help the charity grow. The Ocala Marion County Chamber and Economic Partnership offers a program called the Non-Profit Business Council. Founded in 2009, the council is open to all 501(c)(3) corporations in the area and “promotes the positive economic impact of nonprofits; strengthens their leadership capacity; and promotes collaboration and philanthropic education throughout the community.”
Starting a nonprofit is an endeavor that requires a substantial amount of time and dedication, but the reward is great. As Fitos puts it, “just knowing we are helping others makes it all worthwhile.”
- Are able to communicate who they are and what they do
- Define reasonable and attainable short-term and long-term goals
- Show financial acumen in how to fulfill these goals
- Can chart progress made toward the goals
- Have programs that clearly speak to the organization’s mission
- Keep accurate and up-to-date accounting books and corporate records
- Are professionally and efficiently run
- Have 501(c)(3) status so that donations are tax-deductible.
Community Foundation for Ocala/Marion County
116 S. Magnolia Ave., Suite 3
Ocala, FL 34471
Helping Hands Foundation, Inc.
101 NE 16th Avenue
Ocala, FL 34470
Ocala Outreach Foundation Inc.
798 SE 171st Court Road
Silver Springs, FL 34488
Marion County Chamber & Economic Partnership
310 SE 3rd St. Ocala, FL 34471
Tel: 352.629.8051 Fax: 352.629.7651
Digital Media Law Project
Berkman Center for Internet & Society
23 Everett Street, Second Floor, Cambridge, MA 02138
Telephone: 617.495.7547 Fax:: 617.495.7641
Internal Revenue Service
This site offers step-by-step instructions on what needs to be filed when starting a nonprofit. Visit site to file for Employer Identification Number and for 501(c)(3) tax exemption
State of Florida
Division of Corporations
This site offers online filing for registering a fictitious name, filing articles of incorporation, and filing annual reports. There is also a search engine to find what names have already been registered with the state.
333 Front Street, Suite 200, Santa Cruz, CA 95060
This is the online magazine for American Nonprofits (www.americannonprofits.org), “a membership organization open to U.S. nonprofits, 501(c)(3) organizations and their staff, stakeholders and volunteers.”