Sunday, December 28, 2008

Reader Question: Starting a new nonprofit...


I have a vision for a nonprofit organization and I am planning to initially just ask friends, family members, and people at my church for donations. But eventually, I want to ask small businesses. In order for the funds to be tax deductible, does my nonprofit "organization" need to be in a database somewhere? Or do I simply need to give them a receipt for their donations? Also, I know what name I want to use, how can I find out if that name is already being used by another organization? I don't want to deal with any lawsuits.


Here was my response:

For the donations to be tax-deductible you will need 501c3 status. To get that you need to apply through the IRS:

You need to be granted exemption before you can legally say that someones gift to you was tax-deductible. As for the name, I would first take a look to see if the website is available at

If it is taken, then you might want to think of another name. You can also do a google search, a search with the attorney general/secretary of state's website, and a search with the U.S. trademark office to check on the name.