Facebook-Tracking-Pixel
Limited Time Offer! Schedule your FREE business coaching session and scale your business smarter & easier! Reserve My Spot

Success! Your account information has been updated.

close icon

How To Start A Non-Profit

In this transcript, Wes Carter (Attorney who represents highly respected organizations throughout the nation) and Clay Clark (U.S. Chamber National Blue Ribbon Quality Award Winner) discuss the importance of starting a non-profit on Thrive15.com, the business sales training program.

Clay Clark:    Wes Carter. How are you, sir?

Wes Carter:    I'm doing wonderful. How are you doing?

Clay Clark:    I am doing well. I'm going to be honest with you, I, as a general rule, and I mean this, I have worked with attorneys for years. I mean this, I've never told you this before, but I'm telling you now. It's not like an endless love moment here, but I mean this. I've worked with attorneys for years and you're one of the only ones that I do not dislike.

Wes Carter:    I will take that as a compliment.

Clay Clark:    Yeah. I mean it. The more I'm around you, the more I continue to not dislike you more.

Wes Carter:    I will take that.

Clay Clark:    All right, so here we go. Today we're talking about how we actually going to go out and start a nonprofit. Now just to be clear, I know entrepreneurs, one lady ... One dude in particular who was not obviously in Oklahoma. He had a business that generated a serious and staggering loss for years and was supported by his wife. That is not what we're talking about. Thrive15.com has many sales training videos.

    This is we're talking about a business where you are intentionally saying I'm creating this entity for the purpose of what? What is a nonprofit? If you could kind of describe it in layman's terms.

Wes Carter:    Well, most of the time it's for a charitable purpose, educational, scientific. A purpose other than a profit motive.

Clay Clark:    Okay. Now to me, when I think about a nonprofit and how to start one, I get quickly overwhelmed and kind of confused. If you could just help me work through this a little bit?

Wes Carter:    Okay.

Clay Clark:    Just take me through this. What in the world is a 501(c)(3)?

Wes Carter:    Well, like some other things in our legal jargon, a 501(c)(3) is the number of the statute that describes what the federal government considers a nonprofit. In that little sub-paragraph, 501(c)(3) ...

Clay Clark:    PO?

Wes Carter:    No. That's where they talk about organizations that are organized exclusively for a charitable, educational, religious, scientific purpose don't have to pay income tax.

Clay Clark:    When people are running around going, "I going to start a 501(c)(3), dawg." People say that a lot. "I'm going to start a 501(c)(3), dawg." You're saying you're starting an organization that's a nonprofit. It has to do with the actual statute, that's where that name comes from?

Wes Carter:    Right. That's where the name comes from. You have 501, that statute has a whole laundry list of types of nonprofits, 501(c)(4), (5), all the way through a 501(c)(25) and a 501(c)(3) is the one that is a charity or a religious organization.

Clay Clark:    Wes, those people, the fun people at the IRS, when I say fun people because I have been audited and I want to say thank you. I want to say thank you. I've been audited. It's a great experience and I was excited to show my patriotism and I could actually help donate more money to our federal and local and state governments.

Wes Carter:    Good for you.

Clay Clark:    Yeah, it's a needed process and I'm thankful for that opportunity. These guys, the fun police at the IRS, they say, "Organizations described in Section 501(c)(3) are commonly referred to as a charitable organization. Organizations described in Section 501(c)(3) other than testing for public safety organizations are eligible to receive tax deductible contributions in accordance with the code Section 170." What are we talking about here?

Wes Carter:    Well, the big reason you have a nonprofit, a 501(c)(3) is two things. One, you're exempt from paying income tax.

Clay Clark:    Oh yeah.

Wes Carter:    Not necessarily sales tax and employment tax, but income tax and people who donate money to you get to write it off on their taxes.

Clay Clark:    Okay, so let's talk about this because in my mind there's a huge issue here. Some people are watching this saying I've heard about these 501(c)(3)s and I know what they're doing. They're trying to get donations from me and not pay any income so it's a bunch of freeloaders running around trying to get my money to buy a bunch of stuff and not pay taxes for it.

    Other people, I would say the overwhelming majority of people, are saying no, a 501(c)(3) is a great organization dedicated to helping people. How do people get in trouble with a 501(c)(3)? How does somebody, those ones you hear about on the news, how does someone get in trouble? What are some things that they can't do, that they do, that tend to get them in trouble?

Wes Carter:    The most common way to get in trouble is they take the charitable assets, the cash, the property and they use for their own stuff. They hope on a jet to go to Hawaii without a good reason or they ...

Clay Clark:    Atlantis is a hot spot.

Wes Carter:    Right. Bentley's in the driveways, those kinds of things where they're making more than what's reasonable or not using the stuff for a charitable purpose.

 

Start FREE TrialI want the answers to my business questions.
Login Try Us for $1
search icon
Feeling Stuck? Ask our Mentors any Business Question.

Ready to Thrive? Log In to your Account.

Login with your email
Please enter your email.
Please enter your password.
Login with social accounts
Signup | Forgot password?

Forgot Password?

Send us your email address, and our team of elite minds will get right on it.

Sign up to Thrive15

and get unlimited access to 1,700+ courses
  • Full Access

    Month-to-Month
    $ 49 /mo
    Try it free
    • World-class mentorship
    • 24/7 access to all videos
    • Practical business tools
  • save $98 on an annual membership

    Annual

    Year-to-Year
    $ 41 /mo
    Save $98!
    Try it free
    *Billed as one payment of $490.
    • World-class mentorship
    • 24/7 access to all videos
    • Practical business tools
  • Thrive15 group memberships

    Team Membership

    Need to train five or more people?
    Learn More
Graduation Cap Icon College student? Sign up for $19/month. Learn More

Contact Us

Give us a call or send us an email and we will be in touch as soon as possible, or sooner than as soon as possible.

Email: info@thrive15.com
Phone: 918-340-6978
Prefer communication by smoke signals?

Ask us a question!

We want to answer you, no strings attached. How can we reach you?

Please enter your name.
Please enter your phone number.
Please enter your message.

Feedback

Let us know what's going on.

Please enter your subject.
Please enter your message.
Even more feedback