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Formation of an Educational Betterment Foundation

Colleges and universities learned decades ago that they could not exist on tuition and state aid alone. This prompted them to aggressively pursue other sources of revenue, including tax-deductible grants and charitable gifts from friends, alumni, vendors, members of the general public, and private and corporate foundations.

In order for such gifts to be tax-deductible, the IRS requires that they be solicited and used solely by non-profit organizations that are organized under provisions of Section 501(c)(3) of the Internal Revenue Code.

Many school districts have likewise discovered that they cannot exist on state aid and local tax levies alone as well. Many are doing what colleges and universities did many years ago. They are forming non-profit educational betterment foundations that conform to the requirements of Section 501(c)(3) of the Internal Revenue Code. Once established, they began reaching out for tax-deductible gifts.

Forming a non-profit educational betterment foundation involves four major steps as follows:

  1. Preparation of bylaws that conform to the requirements of the IRS. These bylaws must state the purpose and mission of the organization. They must also describe how the board of directors are appointed.
  2. Filing application to your home state for a Certificate of Incorporation that, again, conforms to the IRS requirements.
  3. Filing application to the Internal Revenue Services for recognition as a tax-exempt entity under Section 501(c)(3) of the Internal Revenue Code.
  4. Setting up an accounting system separate and apart from the School Districts accounts.

Robert J. Miller & Associates, Inc. would be pleased to undertake each of the above described tasks on your behalf. For more information, please contact RJMA at 716-694-8181, ext. 11, or email us at [email protected].

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