Establishing a Nonprofit In Arkansas
Many grassroots organizations find themselves in a situation where they need to formally organize. Reasons vary but, one might be for legal protection. Arkansas Code (Arkansas Code of 1987 §16-120-102) provides immunity from tort liability to board members of any nonprofit corporation that hold a valid federal income tax exemption.
Another reason might be for fund development. Donors cannot deduct their donation and in many instances, will not donate unless your organization is tax exempt. Many of the grants available require your organization to be federally tax exempt to apply.
There are six basic steps in becoming and maintaining a nonprofit corporation.*
- Adopting bylaws
- Securing an Employer Identification Number (EIN)
- File for tax exemptions, (federal and state)
- File necessary annual reports
* Order may change depending on organization and need
The University of Arkansas Cooperative Extension Service works with organizations at both the grassroots level and at the experienced level. We can provide training in many areas ranging from becoming incorporated, writing and revising bylaws to conducting effective meetings.
Starting a Nonprofit provides suggested guidelines and helpful websites for organizing and becoming a tax exempt nonprofit corporation in Arkansas. This handout is not rendering any legal advice and suggests seeking competent legal advice in each of these areas.
The University of Arkansas School of Law’s Legal clinic in Fayetteville provides assistance to emerging and existing nonprofits. For assistance contact them at 479-575-3056 and make a request for representation. Law students provide representation depending on time and scheduling. The law school sponsors the University of Arkansas Online Legal e-Source that is designed to be used as a free tool for both current non-profit organizations and individuals wanting to start a non-profit organization.
Applying for a 501 (c) (3) tax-exempt status is the IRS Publication that presents general guidelines for organizations that seek tax-exempt status under section 501(c)(3) of the IRC. Content includes references to the statute, Treasury regulations, other IRS publications that explain the requirements for tax-exempt status, and IRS forms with instructions.
- Legal Guide for Arkansas Nonprofits and Volunteer Organizations
Uses a scenario situation describing everything from the birth of a nonprofit to dealing with staff, volunteers and other day-to-day operations.
- Improving Board & Organization Effectiveness
Publication from Southern Rural Development Center. It addresses higher standards of responsibility and accountability experienced by nonprofit boards.