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It just got even cheaper to get your own 501(c)3.
It just got so cheap that everybody should probably get one. The cost to file a 1023-EZ — the federal form needed to get 501(c)3 tax-deductible status — just dropped from $400 to $275. Incorporating in the state of Pennsylvania is $125, according to the Department of State’s Bureau of Corporations and Charitable Organizations.
So, in Philly, $400 gets you a fully legit incorporated 501(c)3.
More Expensive Thing 1.) This intense Lord of the Rings collection costs $800.
It practically makes getting a 501(c)3 near disposable. That’s kinda great. Now, I’ve personally written a lot about how there are too many nonprofits out there, but at this price point, I’m tossing that out the window.
For $400, just about anybody could buy a keg of beer, throw a house party and raise enough money to get their own 501(c)3. It opens up the ability for anyone with any idea to try it out. Maybe you have a wacky impact idea and your ED doesn’t want you to do it under the existing 501(c)3. Maybe there is a niche problem in your neighborhood and no one else is doing anything about it. Now you can, via “legit” means, do something about it.
More Expensive Thing 2.) AMOREPACIFIC’s “Time Response” skin renewal cream sells for $450 at Nordstrom.
I predict this price drop will launch a wave of micro-nonprofits — organizations that can maybe raise a few hundred dollars a year to fund cleanups and block parties. If your nonprofit generates less than $50,000, you don’t need an audit, you don’t need to file the full 990 and there are almost no other required functional administrative expenses. You could and probably should buy directors and officers insurance, but it’s not required.
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More Expensive Thing 3.) Some restaurant in New York has a lobster-and-caviar-filled omelette for $1,000.
Because of this price drop, we’ll be overrun with new nonprofits which will make funding even more competitive. But these cheap and EZ nonprofits are not going to start pulling in huge grants because most major foundations won’t give to startup orgs at this size and scale, which are capped at $50,000 in revenue a year (see page 11 of the IRS’s instructions form), won’t be able to provide three years of audited financials (because audits aren’t required of them) and won’t really be able to support more than a single full-time employee.
What are you waiting for?-30-
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