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Logo of ASI 2016: Called. Chosen. Committed.

Pros & Cons, How-To's and Personal Experiences with Nonprofits in Ministry

John Kelly Sally Kelly
Audio Only


If you have wondered about whether starting a nonprfit would be helpful to your ministry, this may be just the seminar you need. The how-to’s and why-not’s will be reviewed and explained using actual nonprofits the presenters have worked with. A variety of concerns will be discussed, from excessive government control to the expense of filing and receiving tax-exempt status. Multiple examples from the presenters’ personal experience will be reviewed as illustrations. Actual filing forms will be reviewed. Financial considerations will be discussed, including the advantages and disadvantages. The differences between nonprofits and tax- exemption will be reviewed. This seminar will help you decide whether a nonprofit is right for your ministry, and equip you to establish one if you decide it is. 




  • August 4, 2016
    10:45 AM
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Our Father we thank you for life. Again today. Help us to appreciate each moment that you give us you know we pray especially blessings upon the meetings here for the convention especially here this morning. Now as we talk about nonprofits and how they can be used effectively in your ministry pray that your will and your understanding on this topic will be presented in spite of me and other human instruments that you must use this morning in Christ's name him. So I mean I would like to just take a minute to probably going to be more like three or four and I would like to have a few of you share. You know who you are and why you're here. What looking for. OK like to do three or four. OK I know calling for you but I do accounting and income taxes. So I think first off that this woman I will really help me to debt or help my client. But also I am interested very much in starting my own nonprofit I've already begun the foundational things Ford and I've done that for other people as well but what I'm really interested in because of doing taxes and being in that close proximity with the government. I am really interested in the concept of tax exempt nonprofit as opposed to five of one c three because I feel the last government involvement the better. Thank you very much. Who would like to. Share somebody else with. My name is it Lisa I'm from Brazil but I leave here now some years ago I came to tonight state. And I have a calling from God and I don't know. Yeah to fire you will have a nonprofit to how we work so I'm here to learn. Yeah. Yeah. When you hear you know I'm David Beardsley from. Kansas City Missouri. I'm I have a for profit business and elderly health care housing and all and I have son in law has a booth upstairs called pathway to paradise and just recently got his not for profit and I'm just I'm wanting to help and all want to learn all what I can We were amazed at how fast he got it after all the horror stories. We heard but I just need to learn more. Good plans or hear someone else. Sure has missed when he came over here. He's. Well we have started to occupy hydroponic farm and we just retired here shortly. And the our son and his wife are the ones that are really running this and we've been debating whether we should make this a nonprofit or. For profit. We've been at it now for the last couple couple of years and our outreach we really want to teach people and try to maybe go. Into foreign countries to teach him how to grow vegetables and and in a very small confined area. Specially and in foreign countries where land is and weather is prohibited. And so we're just we've been debating this now since we started with it. We should or shouldn't and we've heard so much against it. That is just so much paperwork that we haven't really pursued it so we're just really interested to hear if we should make a decision should make it not profit or the way it is. Yeah yeah I'm think oh yeah I think so far you're on the right price. This is what we're going to talk about. So my name's Gary Bartholomew with the nonprofit water for life. Is it feasible to have an all volunteer. Non-profit we're running one. OK. I'm Barbara Neil from astride Yeah. And my husband Michael and I run a. Health retreat we have for about twenty years now and. We're nonprofit. And I also got there was David Knight and. My wife and I run a nonprofit called us mission aviation. We took the plunge a year and a half ago. So so far it's been good and it wasn't all that difficult. We worked for it on profits overseas for. Four or five years before hand and finally decided we needed our own so because when busing but we are from Puerto Rico. And we retire you know that American division. My husband was the. We have a small company for. Racing phones for the food and projects that I made the for under development countries we had trained eye is a nonprofit organization. OK is that our first time here you see a good country here. Welcome to us. It was right. Beaver nonprofit about two years ago five one c three and company is seed time and harvest. So we reach out to agricultural people farmers and ranchers. Target them. And so I'm just here to learn and it hasn't been complicated to this point been very simple for us but we don't do a lot of you know cash flow stuff so maybe that would change if we did. Yeah. Money makes things different. Yes My name's out for those who are already in my position in private practice in Southern California but I want to transition into lifestyle medicine. So I just want to see which we're all doing and hey we're probably going to talk a lot about what's the medicine for say I'm sorry I'm putting this away it's another hand that just really need to share. OK I know I can get everyone. OK I'm not a prophet. We have a nonprofit called hon. Which consists of most of the medical professionals and we go overseas. And I say and have screened in such a big question that I would like to be discussed and possibly if I saw my sister is how do you attract resources on a sustainable level. You know I think that's probably a question that we all would like to know I I appreciate it. I'm sorry I. I want to do a little bit of that for my sake and yours to the so we know who's you know who's here. OK I don't know how you like to do it but I have a slide here slides that is going to show us the questions. If you're the type of person that you'd like to have the handout to write on as we talk. There is you can come up here and start on the left there is this is the main handout I'm going to and the answers are here. And then the next one is Articles of Incorporation of actual cooperation that I have worked with in the by law. So just come on down this way. So now you can have come here. If you. I want to include you if you're going to effect the end you decide there's something you picked up you don't need. Would you bring it back and put it back in the box so when you get your hand the the first one that will be really obvious to you. It's the. It's the questions members and then the discussion. I do have it in digital form if you want to give me your email. We can arrange to get digital copies. So let me it will be most efficient if I don't want to talk as much as my wife although she would argue me that point but I still want to talk enough that I have to be organized. I want to get finished OK now you know a person. Really saying when when even when they have a list of us scheduled they still never get more than halfway. But anyway by God's grace will finish the whole thing and have some questions and answers period. You know you ask the questions and I'll get someone else to answer them for you and the like. So my first question is and I think a lot of people. Oh I'm sorry I was going to. I don't know if that matters to you but I will talk about it later when it's important I guess. So the first question that most people I mean people have that are not acquainted with the idea of having corporations or nonprofit in all this stuff and I had the same questions when I was hey is this Is it safe. I mean should should you really do this isn't this getting entanglement with the government. I mean you know and of course if you're into conspiracy theories. You know. So my first sentence there is this. These are judgment calls almost decide for themselves. I'm not here to tell you whether you should start a nonprofit or not or if you have one whether that was a good thing or not but I just state the facts because I think a lot of this is a little blown out of proportion. Sometimes cooperations are simply legal entities that have an existence in law. OK And they are operated according to the laws passed by our government and then I mention that the church organized the Seventh Day Adventist church organized corporations right after eight hundred sixty S. when we first realize we had to have more organization to do God's work efficiently and so on white councils if you are familiar with who have the right is. Councils were favorable to number one to getting organized and number two support supporting the idea that that organization included forming corporations one of the problems we were having is the church was growing in the eighteen hundreds. Whereas assets. Do you know that many I mean we operated our ministry sometimes in the beginning this way too that the assets that were really considered by all of us to not really belong to a person were put in someone's name because somebody had to own it and then of course all you have to do is have something go bad and then that's not a good situation. So so we we found a lot easier for shared ministries shared ownership to do a corporation but I'm not able to speak to you about international If you're from another country and things operate differently. I wouldn't you know even suggest that I can speak to that I don't but I am pretty familiar with how it works in the United States and I have long nonprofits in more than one of our of our states by the way a little interesting point right that she agreed to serve and did serve on the board for the Madison school. I think it when it was first formed it was called the National normal agricultural Institute. So I'm very comfortable myself that this is that that we could use like anything else. OK I don't own a television for example don't think I'm radical by the way I just don't have time for a television my house but I don't condemn anyone who has a television. I just don't happen to have time for. So if you don't need to call a corporation wonderful but I think it's a tool that we might use OK Next question of course is a practical. You know. What's involved at set your what do you have to do is an inexpensive don't you have to have a lawyer and I have had the experience both ways. I've had nonprofits that I formed that we did use a lawyer an attorney and I've had two or three I've formed without any attorneys at all. So you know you do not have to have an attorney who is there's some value to it. I mean if you if I were going to if I had say five million dollars of personal property that I was looking to put into a nonprofit I probably would spend a few dollars to get an attorney to make sure that we hadn't missed anything or you know some obvious thing that would later put those assets at risk but so far I've never had five million dollars to put into one. So basically you have to have at least three people. I never I don't know of any state. I'm only familiar person really closely with three but I don't know of any state where you don't have to have at least three people to form a corporation a nonprofit corporation and right now when I talk about I'm not talking about tax exempt. We're talking about just forming a corporation. OK I'm going to separate those two topics. You'll see for obvious reasons. So one of the things that keep in mind is that there are and at the back of your hand up by the way I have in the back pages a couple websites and some things here that are very useful resources on online and also by the way have for someone who's very strongly text based. I do have a printout of a couple of forms in the instructions in my little book here that you can look at or you can borrow. So you put a hundred dollar deposit. Any way this kidding. So the bottom line is it is not that it is remarkably non com complicated really look at your second hand out the articles of incorporation and this is the document This is what three pages is well one two three pages is the document that you file in the United States. What you say in the three states on for me with California region you know Oregon that you just file documents like this and you can find it with the state commission or whatever they might call your state with a fee and it's done. You have a corporation. I am looking here I was looking here at the Articles of Incorporation that's a separate document that and then but but the back page here is simply I was referring to earlier there's some Web sites and some documents that I will talk about those I just want you to know that it was in the back there have really simplified things since I last the last time I formed a corporation was two thousand and seven and and so I just went in preparing for this presentation I went and did a little you know catch up and wow is it nice because now they have this website which I gave you on the back page there. I have this state exempt. It's the next to the last page and bottom half. And there it is stay exempt dot I.R.S. dot gov Wow what a nice website they have explanations forms in fact I thought about when I looked it up but we probably didn't need to have this talk. I could just tell you a semi personal experiences because it's very very easy. And everything is right there and it's online so. Well yes. And then as we went along. Somebody said well what you're doing is that is really for profit more than on for profit we should be a corporation. So we had to go back and change and I think you know if you don't do it right. Then you could run into some into some difficulty on this. That's a really good point and the next question. I do have a question on and separate states is this is this something that is filed as as a country in America or different states have different requirements so that's a great way to turn it down. Yeah that's a great question. I've got to have Mike. So the answer to this great question. The great the answer is that there is something in the concept of reciprocity cooperation for and in fact you know the state has probably more corporations than any other state is Delaware is one of the smallest states because the laws in Delaware are very friendly to two corporation forming and cetera. And you can form a corporation a dollar a corporation even though you're a resident of California. If that was what you want to own. Thanks for that reminder in one with your cell phone still not turned on is a good reminder for us to put them on silent and make your money and that's kind of embarrassing to say that and have your phone ring. Anyway so yeah. So the answer for me one one state and it's recognized in all the fifty states. And in fact I would have to check outside of our boundaries but I believe it's also easily recognized in the United States. But the documents have to file. Do you want to. Good good. And I believe if you can afford professional help. It is certainly a good way to go but I talking about the example about us working under an L.L.C. and then finding out that the really you need a corporation. Let me just speak to that that's in this paragraph here in the middle of the first page a key concept to keep in mind is I want a nonprofit corporation is formed its assets and what do I mean money property everything belongs to legally belong to the corporation and cannot be used to benefit any of the incorporated his or other private parties in fact and when we talk about tax exempt status. This is where it really gets That's a big point comes into play here is what kind of checks and balances are per What are your By laws etc so that the that this separation is there. So the corporation can lease assets and buy and sell things. It's really very much. Just like a person in many respects but it is a person his will is the will of the board. So you have to a corporation has to have a board and every state that I know of a nonprofit corporation has to have a board and maybe I guess there might be some non profit corporations that don't but I don't know about profit corporations and that group would then have makes these decisions and manages things. So let me move. So how does uprooting I still there's a few I want to make sure we're through with this because some people are still wondering so head of operating a nonprofit a fact your ministry and witness can and I'm proud. Pay a living wage for example. OK And the answer is really of course that there are many corporations you never think of as it's corporations nonprofits I mean I'm scuse me. There are many non-profits you would never have thought of maybe as a nonprofit. And they're paying like I member before you became a Christian in idea work for Blue Cross and Blue Shield. I had no idea that they were nonprofit some of them aren't now. OK They've gone to for profit and I don't think we'll probably try to go into that but the but they were they were a nonprofit in we all made the box there. So so you can pay anything within reason. And what that means is you especially if you're a problem when you get to the nonprofit part of it they will want to make sure again that you're not just using this nonprofit as a way to line your pockets and you know do reasonable things. Someone mentioned how back there about it wasn't it was relatively easy. We'll say this that forming our corporation was a matter of like I said filing a paper and and getting the the approval that we existed but finally the nonprofit was status was a lot more complicated. However it was approved through our maze when we were praying right. Of course but it was approved. We didn't have prelim preliminary approval or anything they just said OK you're you are nonprofit this day forward. And sometime in the used to be that you would get a nonprofit tax exempt. I'm sorry for mixing my you would get a tax exempt status in that it would be provisional and they would want you to follow reports for a period of time and I understand that that may still happen at times but but if you are a true ministry I don't think you'll have a problem right. What's so. So you compare living wage one of the things that we found about nonprofits and the reason that it really is. I wouldn't I wouldn't think personally myself of having a ministry without using a nonprofit. Now that's my own personal experience and belief but what I found was that if it comes to somebody's question about raising funds support in the communities that I've been involved in the people in the community the businessmen the the citizens they consider a nonprofit more obviously a disinterested a benevolent activity. If you're doing it if it's yourself like OK I'm a physician Suppose I say. I say the community. Well I'm a benevolent guy you know I'm really doing this is a ministry and they say you know how come you make like ten times of every patient that you see you know how's how's that benevolent and just for your information. That isn't true about me but then I am going undoctored I'm a lifetime medicine doctor so doesn't pay that well but my point is when I did the exact same kind of work in the in the community as part of a nonprofit it completely was looked at it completely differently. And so I don't know how you are to work with your your constituency your your public who you're trying to reach you have to think about that. But I believe that by and large being nonprofit even if you can even if you can't get tax exempt status is a good thing to do it opens the publics you know opens our heart more to your benevolence let's put it that way and if they don't mind the people who get paid. I mean everybody has to eat right. The labor is worthy of his hire. So OK And you know what we did in fact the one that you have there the articles incorporation as you can see I mean this is a this is the actual real live. I mean it's not. Signed by the SEC to stay but it was signed by me. I think now that OK that one wasn't signed. But anyway but this is what we file this is the actual document for this life the Health Education nonprofit it is still exists and it's a Virginia corporation and it's and it's active in it let me say one of the thing one thing about the one of the things that we wanted to do was we wanted to do a ministry in collaboration with our local church but the local church had only say this kind of you know I'm a joke around a little bit so I don't take everything I say you know but I will get in trouble and I'm not as wild as Mr Trump. But I do sometimes exaggerate just a little make my point. But anyway it seemed like the church was just shaking in their boots because we were going to have a doctor and a nurse and they might get sued in the whole church. And they were so worried and then I know. OK so that's so much for mine but it's true we do want to protect the church. So we formed a nonprofit. And the nonprofit we did all this ministry through the nonprofit which the affiliate the way we connected it with the local church was we put some of the church board on our board and on our operating committee. So the nonprofit actually was run. For all practical purposes by the church but there was no legal connection you know what I'm told by the lawyers or an expert on this is that well believe me the judges follow the money. So if in fact the church is in control but that's what the administrators did when we started separate corporations call holding corporations for our property. You may be aware that we have separate corporations that are so that idea was to try to isolate things you know I don't know what you think. But here's what I think. I'm not of I don't keep God's in charge of me. OK God owns my car he lets me use it. Drive it. He he he has my everything I have is really God's And so like so I had somebody steal some my stuff one time and you know what I said I said well OK you learned. Apparently you are going to put that in somebody else's turn. Ship. OK praise the Lord. So I don't know what your attitude is but my point is that that I'm not I'm not unwilling to pay the price for whatever. If I do something and I'll send you to debtors prison OK You know I'm going to try and in manage my stuff but I mean I like the idea of if you do something that hurts me. You should be accountable you should be willing to make it right to me so I don't really have a philosophical problem. I'm not trying to find some way to be able to do harmful things and not pay the price so but I do believe you should be wise as serpents are most is so so we have a nonprofit it has a brewery. That's very a separate board from the church and everything but we have on it. Some of the people from the church and we have an operating committee that basically runs the thing and that's all church members. OK this is what people want to say something you want to say something. Yeah. So it's a good point. Yeah. Technically there's no limit but but I do think that as a as I understand the Seventh Day Adventist Church beliefs and writings. We all have a little bit more limitation in the world as we we don't believe in exorbitant wages or exorbitant prices was somewhere over here that was. Yes you could you. OK. Yes right here. I think it's fine standing what we're talking about here and I haven't gotten to that part of the talk yet. But let's get there. So there is you can be nonprofit or for profit when you form a corporation. So so now I know that I'm going I'm sorry I'm just if I get when I get through. If I am uncover what you want to say let me let me know so so with these articles of incorporation a corporation is defined by this and you can tell from this whether it's for profit or not for profit. OK. What you cannot tell is whether it's tax exempt or not because tax exempt status is granted by the I.R.S. separately. This is granted by the court by the state the. Data Virginia. Granted this corporation. They have nothing to do with tax exempt or not. And we'll talk in a moment and another I will talk about tax exempt just very shortly. But I think what my friend was bringing out is that you have you can have a for profit or nonprofit corporation the tax exempt status is only available to non-profits and at least in the States. I've worked with and so you have a separate application and a separate thing you have to do now there's something that you said and I don't know exactly what you meant I may be putting too much onto your words but you said something about when a donor gives something they want to they want to receive something. OK And here's I want to say it's on the really clear. Is special. If you're a tax exempt. There isn't. You don't get anything if I give something to a nonprofit or to tax exempt. I get nothing. Now I might get a tax exempt receipt which I can then file with my taxes but I think I just wanted to really make a clear ambiguous. That if you give something to a nonprofit it's gone. You get nothing. OK you might get good will. You might you but you if you get anything. Then there are tax exempt status is in jeopardy because my wife is the treasurer for a number of these corporations and that we go to the reports that we have to file are very explicit about you know just showing that there is nothing. Going back to donors. Yes yes yes you're giving us some good points. I can see we're getting and it's all right. But anyway we're not following my my gender very well so work. It's going to be a little choppy. Let me let me move ahead and look at these things because if I don't do that we'll all end up missing something that I should have shared with you. OK So one of the advantages of operating as a nonprofit and what is that let you do and I'm going to talk a little bit about that but in the end of this we're now in the second page of the hand down here they allow you to establish an enduring enterprise which protects your investments from being usurped or appropriated by others. I don't know if any of you have had this experience I have had a small case seven I know someone who had a big case of it and that is the group. Banded together with some like minded folk and and put in the ministry grew and pretty soon they were putting pretty pretty large amount of their personal assets into it only to find that somebody ended up making off with it. OK I mean and essence and in fact do you know one of the most famous cases where this happened. Yeah dentist church. It was actually Dr Kellogg Dr Kellogg ended up with Battle Creek sanitarium and it really should have been it should have been belonged to the church. If you look at the history of all that I believe that was the intent of those who who gave assets to it. But he managed to end up with it and when he separated her you know and I'm not here commenting about the good or the bad of the ugly about that separation I'm sure there was fault on both sides but all I'm trying to get at is and there was a corporation involved there. So so I just know that if I were someone that was putting a large amount of money into something I would want to know that it was secure it was going to go to somebody going on embezzler or taking her own it. Number two that it was enduring that it would go on and you know I mean I'm going to die sometime. Well maybe not maybe I'll get translated alive but. I'm losing hope for that as I get older and older but the way you used to think I was pretty sure that but thirty years ago. Anyway that's a joke about a serious topic but anyway maybe sooner than we realize. So here you want to say something. Well I think that's probably a really good question and I think it's outside the perv a of my talk and maybe and. My knowledge I would say I mean you it's you. Maybe tell you about something that you may want to establish a foundation or you may want to establish some kind of a financial instrument that I don't I'm not sure I fully understand all that you talk about but I will I will say this about nonprofits intact example. Is that a properly established nonprofit with tax exempt status would certainly in my mind qualify as one of the avenues for accomplishing what you're saying. But I want to say the You Can Make A Well I'd describe your problem as more and I do about it but there's some there are financial arrangements that you can make to give or assets to a corporation or to the church or whatever with a specific purpose etc Yes. Well let me I will. I'm only going to spend another minute because I mean it's a great question. But it's not it's not really what we're doing here. But let me but I will say one thing about that question. You see if the church started allowing itself to become an instrument for everybody's pet project that they want to give money to pretty soon we wouldn't have time to preach but stick with me so. So I've I have known people who have asked the church to do something they were willing to put the money and if it was it would cost the church nothing but I have come as I've got a few more gray hairs to appreciate their reticence to to do that because here's the point if I did anybody in this room or the church or anybody any entity. If I accept funds that I give my word will be used in a certain way. I believe by before God I have a God given responsibility to make that happen and and so that's work anyway so I just want to say that I believe there are such instruments out there and things you can do. I don't think the church is the main way to do that and that brings me to one more thing I want to say about non profits corporations and that is they're run by a brewery. You know here you know the United States. I don't know assume most of your United States citizens but in the U.S. The Supreme Court is the final arbiter of what the Constitution means right. You understand that if you're They say if you're gray haired you. I had enough civic government classes in school to know that sometimes I wonder if they're getting it in the new generation but anyway I remember I was taught that fact and said that means is that the Supreme Court today interprets the Constitution a little differently than the first Supreme Court. And that's a probably by and large that's a good thing but it can become problematic. So Ron had it is if you have a brewer running a corporation and there's someone on there who is a power able to be laid and be and can take control. Can one or two at most can take a board. You know Rule one of them so so until use if you think about this that you you want to have your and what controls that is your bylaws your bylaws and your your articles of incorporation are the things that give the controls because the the bird is bound by the by laws and the articles of incorporation now they can change those but by laws. So what you do is you obviously make it so it's not easy to change the bylaws. OK I don't know if I'm gotten off on a tangent and everyone is going to sleep on me or not but anyhow if you have specific questions. That's relevant to the things I'm talking about don't hesitate to ask. I just want to go off into me directions. OK So one of the other any disadvantages is any reason you would not want to have a nonprofit corporation where there are some and. And one of the things is it says here. Clearly is that non-profits have specific rules they my policy is a must operate under this list doesn't limit what can be done but I think in a good way. Notice decisions can be delegated to officers of the blue would can delegate in the bylaws that decisions of certain type can be made by officers of the board does not have to make. Every And every little decision but nonprofits are not as nimble as a proprietorship even a good partnership because you know they have to have any meetings and discussion and you've got to have a majority agree on something then here's another important point. Assets given to non-profits cannot be taken back or given to the donor especially if they're done to receive the tax deduction for the donation. OK All right. What is the difference about taxes. That's the three hundred. One of those three billion on private India tax exempt in Aren't these the same thing if not why would you want to be which one and bottom line is that now I want to introduce the idea of tax exemption. Thanks exemption. There's two components to it. I think that we should be aware of the first one is that if you are tax exempt as an individual suppose somehow I could grant you tax exemption. That would mean you you would think it would mean you wouldn't have to pay tax. Right. And that's this true. You are if your taxes them. You are exempt from income tax because of taxes emption is granted by the federal government. So you are exempt from federal income tax. Of course in my case that's not a problem because we don't have any income. So I don't need to be tax exempt not to pay tax. I'm smiling a little bit. You guys are too serious but he way but it's true we really were we were truly a nonprofit ministry. But so really I wasn't worried about getting the tax exemption from the income tax. I was going to be paying anything but the earlier part by the way you may or may not be exempt from sales tax or property tax or other taxes you had to check with your local county government so on we found that in some cases. Forget where it was maybe image anybody way we actually did as a tax is it nonprofit it affected some of the tax that we were exempt from or forgot what it was now you know it wasn't sales tax but anyhow. But the real reason that you want to be taxes am for most of us is because we can give a tax deductible receipt for donations or property and so if someone gives me say a band to use my ministry. I can give them a tax deductible receipt valued and what's the appropriate market value of the van and I cannot give them a million dollar receipt for a ten thousand dollars van that needs repairs I can't. That's just that's not right and you'll get in trouble if you try it some who have so not and honest but I have no non-profits anyway. So the that can be valuable especially due to a donor that pays tax now if you're if you're a donor then like the Nabatean come to pay tax. It doesn't mean anything but I know it's a valuable thing it means that you are more likely to be able to get donor donations from folks that have some assets and it's it's not a small thing it definitely makes a significant difference. All right. Personal experience. OK Are we kind of showed you the my for second slimy way. So I have helped form or form to help form two taxes that nonprofits in Virginia. One was done in one thousand nine hundred ninety eight in way incorporated and lifestyle health education I just showed you that was two thousand and seven and even way it was a city ministry. In Roanoke Virginia. It included a beacon cafe a whole grain baker and health food store. Why some health education is a church affiliated Health Ministry in Rocky Mount ridge and you include the health food store outpatient live some medicine clinic. My wife and I did most of the paperwork for the four that we filled out the ten twenty three. We did the one ninety S. tax reports. So we've been entered in OK I'm the president for life. The health education you got the articles of the corporation there so you can tell what it does She was also I'm sorry she can't be here. She broke her ankle. It was a pretty bad break she had to have surgery about three weeks ago so she's still not mobile enough to come. Sorry. She's the chief financial officer for secular tax exempt corporation fact she handled this is this is a little a little fun to build here but she handled the largest acquisition of property by the U.S. government since the Louisiana purchase that my wife you know very well she writes big checks but the way it was it was a wealthy donor. But I don't member how many thousands of acres of land from the railroad in southeastern California and the while is Conservancy bought the whole thing transferred it to United States government so that was cool largest land acquisition by the U.S. government since the Louisiana Purchase. So yeah. Now move on to something more useful can do this. How about that doesn't. Can a nonprofit. Be religious purposes and can you do this without having to be a true church because you know that right. You can start a church. You can you can do that you don't have to be. I'm not saying that you should. But anyway. But the answer is No you do not have to have a as my friend. You don't you do not have to be a church to have religious purposes for your nonprofit and in fact but I want to I want to point out something to you. Oh I forgot to mention that I see I left the program how the previous It was in your hand out about the American consulate the medicine that I helped form the Articles of Incorporation must state the name of the corporation and its mailing address its category where the profit for profit. It's purpose. The names of directors and officers of the agent or contact person one of the possible purposes for a corporation especially a nonprofit is specifically for religious purposes of this in Virginia and in California when I was funneling in articles incorporation one of the recognized purposes was for religious purposes. OK And but I want to say something. Having said that because we didn't go that route with it. Choose to form a corporation for religious purposes but the reformer for religious purposes why Absolutely. And once is because ever since I became a Christian I know about you but ever since I became a Christian everything I do is for religious purposes. If you want to say it. So I mean but I thought we thought that forming a nonprofit for benevolent public services including health education and science that allows me to do everything and anything I want to do including study the Bible. So I do we just choose not. To use it. I'm not opposing it. And you know sometimes we thought well we can just check all the boxes you know in clued in religion but you're right. Just want to make it clear that while I'm not opposed to forming corporation that specifically sense for religious purposes. You don't have to do that to accomplish. Most of what we're wanting to do in ministry because see under here if you can do medical services health education books radio programs spiritual health. How about that spiritual health can include bomb studies materials. So no tax exemption. OK. Yeah well one of the things that we've done. I have to look and I don't know if it was in the articles or if it's in the bylaws but what we have done is when we talk about health we talk physical mental spiritual social you know parentheses. And so there it is it's there now. I don't know the thing. Here's what we're trying to avoid. Trying to avoid this idea that sometimes happens when people think that you're just trying to veil your religion I mean really your interest in health is because your son. They have been is and you believe everybody will be a vegetarian and we're just trying to make it clear that I don't know I don't for making you think they're not but just it's the issue isn't that it's because I believe that it's because that's right. It's because that's rational it's because that's best you know I'm saying. Anyway. Yes back. That's a great question. I think that's a great question and I recognize immediately I don't have a complete answer for you on that I wonder the same thing though because I know like in California things are getting it's getting a little dicey from what I understand. And yeah and so it could be an advantage to have religious purposes in there but then you've got to think I mean these think these things through. Bob Jones you know Bob Jones University. Bob Jones is about as clear to me is a religious entity as you could be and yet they're having trouble with their religious exemption on some things. So I mean you know ultimately when a push comes to shove we're going to prosecute doesn't matter what. Well that's my understanding that they're having issues. Yes but you see they're getting they've gotten tangled Sirhan they've gotten in tangled with government loans for students. That's another entanglement Avenue. OK. I mean you know the government the government. I mean I'm I'm I'm the government works for me. You know if you realize that the government really works for you too so it works for all of us. But anyway so the government is not my enemy but it's secular and so what I'm going to say is that from the standpoint of a consumer as a citizen. I'm kind of happy that the government has some kind of strings on the money to just throw money away well I don't know we're kind of doing a good job of that. So I just had to throw that in but anyway. But you know I like the idea of accountability on the money that the government uses but then when I'm when I'm receiving. Well we have students that are Institute. You know working like hills. We have students and we would like to be able to. Help them get student funding grants loans. Well not have grants but but loans. But if we but we've been talking about that. Well wait a minute. Do we really want to have student loans because the strains come with the money and I don't mind if the string is attached to the student but when it's attached to the school. I have problems with that. So in a way that's a great question and I honestly don't know the answer. Maybe this gentleman here. So are saying I've worked as a business consultant and as I've been reading up on white with my business. Lance I've started to understand that some of the price you gave was actually to help with some of this issues. Right. So from a business standpoint if you actually think about the question you asked how do you protect yourself for some of these very tough federal laws. One of the things is that numbers tends to be actually a big thing a lot of the federal rules are governed by Once you're a certain size a prick who are buffer certain size then you are subject to this law. So when you think about Ellen White had indicated that small keep you think small Right and so this becomes some you know wise wisdom from waist back that we can use today. Yeah yeah. Thank you. Really good really good come in and yes I agree completely. And it's another reason to be small. I think is that it's better to form a sister then to just keep growing and tell you you know. Just think about you know us Americans most many of us weigh three hundred pounds. And we'd be better if there was three of us that way. One hundred pounds when we were five. And you can do more to OK Thank you Jim I don't know if I finished this project here. I want to talk about taxes. And I know I'm going to run out of time but I keep watching the clock here we still got a few minutes so tax exemption is a separate process from OK in the can from that you file this is the ten twenty three. So we and I and I have a copy appear for you to look at but in the back of your hand out here. There is a page and so here you know the ten from the ten twenty three on the last page you have a a part of the ten twenty three. So you recognize and then you know this is a ten twenty three easy if the bottom line is you probably will go to stay exam diarist dot gov and they will help guide you right through all of this but it's a lot easier than it was frankly when we did it in two thousand and seven ten twenty three is like a thirty or forty or forty page document and while I mean like when we first saw that I can remember my wife and I would like to do just as I want you to do you know. We're going to get a C.P.A. or we're going to get somebody and you know what we did my nephew in law is an attorney and his wife is a C.P.A. my niece and so this is where and you know what he said to me he says well I can do it but he says you're going to have to answer all the questions anyway I mean I can't I can't do it unless you tell me all the answers and he said well we got to know all the answers we don't need you. Relative OK I could say I could talk that way but the way this is so so says well we'll let you renew it at the end. So we did it and you know it was a useful process. I really do. I don't hope you would not let the size of this tome put you off. It's doable. You know that's a good question and I don't remember the specifics this was new. They didn't have to do that as a we would have done probably but I believe that it has to do with he was saying with the size of what you're planning to do but I should have had an answer for that. I don't I don't remember the explicit fix. I would tell you this that I do remember this when I was trying to update my information the vast majority of people can fall ten twenty three easy. Almost everybody. There's only a few cases now that need to do the Big Ten twenty three. OK this is you guys know the answer to this question some of this is pretty self explanatory means something obvious like what are some industries that are nonprofits you know most of most of them. Most of Adventist ministries or nonprofits. OK here we are talking about this already. I want to say something about the bylaws because I think that's important and I noticed. I really appreciate them doing this but this is not the handout that I sent for you to receive this is I'm sure much better. I actually gave you a copy of ours. But this is one from the bylaws of A.S.I. missions so this is more this is more the brand. Is really good. I lived through it but it's a bit more complicated. I suspect this is put together by an attorney which is a good thing but the one that we put together was a little bit simpler but nonetheless here's the key thing I want to say just about bylaws the bylaws are what becomes I mean when a difficult thing comes up in your nonprofit management. The bylaws are going to become your this is the arbiter this is this is the rules this is this is where you have to go and by the way if you are part of a nonprofit get a copy of the bylaws and know what the bylaws say one of my frustrations having served on a number of non-profits is I actually I'm not sure that you should have a director I don't think you're qualified speaking of Trump. I'm sorry but I don't think you're qualified. If you don't know what the bylaws say I mean really how can you do your job as a director because you know this is what you're supposed to follow this is what you're supposed to do so. So anyway the bylaws are important and it's really good when you from one take a couple of copies. There are examples out there that we were giving you one. There are others and just look at them and think about it. Now one of the things we do it. Whereas we thought Let's give an example from some nonprofit that does what we do a little planning to do so in saying so would be silly to go get a you know something that's not at all like what you are and be more different thing is think about the size I don't know what you're going to do we we wanted something small. So we ended up I think our board the lifestyle health education I think our brood is six members and I have to let me. I want to share a little insight with you here on that by the way we did something I haven't seen others do. I'm sure it's been done but we wanted the local church in Gage meant right. But we didn't know who the pastor might be. Ten years from now. And so what we did was in our by laws the provision is that the pastor of the nearest Seventh Day Adventist Church isn't a member of the brewer unless they decline and the parish nurse of the local church is a member of our board. Unless they should decline in which case the church is invited to name a replacement or another. So see built into our. MEMBER We wanted a nonprofit that would work with the local church and the church would feel ownership because one of the I don't know if I here has much experience with this but my experience in working with a local church is that that it's difficult to do something a little different than what they're doing and still have them have ownership. There's like. This is your thing you know and we wanted it to not be our thing and God really bless that that and I know because when we were gone for a year one time and now we've actually I'm We knew that a state that minister you know what you see happens when you leave when something like that you put together a ministry it's in the local church and then you go to Africa. This is where there's up like a worm ate the stock I mean it just disappears and it did happen. So I knew that we succeeded that that that ministry is seen by the church is their ministry and that's And so what I'm trying to share with you is if that was one of your goals in your ministry. Then you might want to think about making it so that the church is organically connected with at the board level with your ministry. Now if that's not what you want to do that doesn't just mean the minimum number is in the is in the Articles of Incorporation if there is a if there's a a number. It is set by here like in page two out of three directors the Clippers should have a balloon directors not less than four zero nor more than fifteen individuals so and the article is incorporation and this is some to think about. These are hard to change. They're not impossible but it's very it's more complicated to change the articles than the bylaws the world can vote by majority I think in most cases like some of these articles will say. That to change the Byelaws requires a supermajority or whatever to do that but the point is you can do that at a normal board meeting but you cannot change the articles at a board meeting board cannot change your articles. It takes a process of filing with the State Corporation Commission and so forth and so on. Well anyway I'm just it's not it's possible but it's just so the point I'm getting at is the answer your question. It's established in either the articles and or the bylaws the government doesn't tell you. I think you can't have a broad less than three. I think it's the three. I'm not mistaken. Yeah I have to have three different directors. So you sort of say you can't have just two directors and you can't have all the offices held by one person. So you have to have a you say you have the ones I'm for me. We have to have a president a vice president and us and you can put the secretary church or together you can have three and those people of course you see are on the board too. I mean if you have the smartest if you make the smallest little nonprofit that you can do you would have your say your spouse and hopefully an adult child. OK now that's about as clannish as you can get. OK. But you can do that. So I don't highly recommend it. I actually think it would be more stable. It would be more significant if you get people who are unrelated to each other. OK Well OK. I'm running out of time. All right so we talked about was that do we do this one. Yes OK. Ten twenty through the nine ninety tax cuts to the ninety nine is a tax return for a corporation and most the time you can do a nine hundred eighty and here you can see I have the break point for you there. So if you have a big nonprofit ministry you might have to with over two hundred thousand you would. I have to do the ninety nine not that big a deal either one of them. I've done for years when you know it's anything else. Once you surrounded the first time is more complicated after you get your head around it. This is not that difficult. One of the things that you may or may not know is that you can go online and see the ninety four for any nonprofit if you want to. And so what does that mean. I mean is that when you will be on there to OK then go see your own and maybe it's the problems in the cloud. Anyway. We won't go there. That's an interesting. Yes ma'am. If it's less than twenty five thousand you don't have to find anything not heard of that but we're not quite down that low yet but I just have to easy. I'm sort of pushing that maybe I'll check and see. You know that's interesting you know less than twenty five thousand is that that's pretty puny I mean yes yes. Well OK OK I think this is an important point I want to put in and with but I do think this is important point is not some hurt is not when we follow our ten twenty three for tax exempt status. It was really obvious to us and we did this in two thousand and seven. Now the I realize things are different now but at that point was when they were just going through this this change in how tax exemption was awarded they were they were trying to tighten it up in some ways. And so they were giving provisional status by the way you know when they when they looked at ours and we got a couple of phone calls from the agent that was looking over the paperwork. You know it's always encouraging when you spend twelve or fifteen hours filling out something and somebody actually asked you about it you know it's kind of discouraging you spent all those two or three days in the body even looked at it for you but I like this guy was done looking at it and that was encouraging a little threatening to my wife but I didn't get all of the notes and I'm like No honey they're just trying to get an explanation. So but I was impressed that what they were looking at and mine sense of it was I really wanted to know what we were going to be doing for example when a member I said we have a health food stores a part of this ministry of it is sort of like an outpatient lifestyle clinic and a health food store is for profit and so the question is this is this really is this really nonprofit or is this an unrelated business. OK as they call it unrelated business income. If you're familiar with the terminology and that's what the agent was asking how come you didn't consider this unrelated business I says well it's totally related the we don't have the health food store to try to make money. We have a health food store to show people how to read labels and how and how to shop for health. So it's part of our training is OK So I mean I was making it up. This was how really was. But so we got our health food store is not a for profit it's part of the training and it's a small little thing anyway. You know and I bylaws know what do you mean was I don't understand it isn't about laws because I buy and I say that we were going to do training and we're going to do you know health education and training and the stories. For health education. So absolutely. In that way. It's there but the but the bylaws see this is I think it's best not to put specifics in the bylaws make them broad you know. So we don't say in the Byelaws that we will operate a health food store because what happens if we get if the health food store goes out of business or we don't have anybody that will run it and so we close it. Well the training value drops but we're not in violation of our bylaws. So we're out of time I had I guess I had somehow this idea that we would have our questions at the end but they've kind of come as we went along which is OK yes those links are in the handout. So I would say the most valuable link is state exempt. And then this. I respect gov pub publications and Iris there is a directory and they have the forms this born here the five fifty seven is the instructions about the nonprofit all you are going to know about it just to see and use for the ten twenty three form instructions with it. Let's see which one is the difference here. Oh yeah easy thank you so is there any other comments or questions Crewdson somebody expert in knows more than I do correct anything I've said. I'll tell you what I I think that a nonprofit is remarkably easy to do a tax exempt status. If you're really doing something benevolent and that's the thing just say it like it is if you got it. You're doing something for the benefit of the community. Just describe it the way you conceive it and it will my experience and some others I've had they will. They're very happy to give tax exempt status for what's real. They're trying to keep from being abused and I'm good with that and I think Adventist Seventh Day Adventist mission minded. We have some of the best. I mean there's no reason we shouldn't qualify because what we are counsel to do in our wanting to do is do what we want to mingle with people as one who desires their good then if I would their interests minister to their needs and bid them join me so I mean let me finish with this piece and then I will have experience and when I came out was we started off and it was we were seeing is kind of weird I mean here's this doctor in town and doesn't do normal stuff right. And so and he's and he's from some unheard of religion and I never heard of this what was the seventh day adventists So we were and this is this is a Appalachian mountain communities OK you may or may not know but they're a little bit provincial and I don't get too excited about that because I'm from there. OK so I'm one of them but do you know here's what happened in our experience by the fifth year. No the third year we were we had people in the community volunteer in to come in and help us they wanted to come and help us do what we do. And that was good because we started two thousand and seven. I don't know if you remember but two thousand and eight was not a real good financial year. Most businesses many businesses started two thousand and eight went out of business because of the downturn. So they came and volunteered in the now of the stat is that the United Way of our county has a fund raising for our ministry. To pay to subsidize the people who cannot pay for the lifestyle program that we run we use the chip and do some health ministry using the chip complete health improvement program and so the United Way really has money to give to specific people that they recruit from the committee that's what it's a nice it all worked out nicely. They don't give us that money they give it actually to people that come in give it to us to go through the program. And I mean that's I'm going to never I wouldn't I wouldn't dream of that but I don't think that we could run that unless we were a nonprofit taxes. And operate on that basis. So I think it's a great avenue. Why we need to stop because it's time to go set your genes which is right now a little lifestyle medicine doctor piece comes out here. I don't know if you know what or not but it's the genes which is that really determine what happens with your genes and food has more impact on the switch that is than anything else. We've discovered. So when you sit down to eat Think about your setting genes which is don't don't think you're going to feel your sweet tooth or not you're going to set your genes which is let's pray for him and I think you for life and breath again I thank you for this privilege of ministry and I thank you for the interest of those who have been here and there with their experience and shared in the and I pray that this will having been here will help them to be more efficient in ministry we we have a sense that what we do we must do quickly in the world. And we ask that you will bless us as laypeople pastors seeking to accomplish the Great Commission on day bless us in the remainder of the as I mentioned. ZIRIN Jesus knew this media was produced by audio verse forty S.. Aves layman's services and industries. If you would like to learn more about please visit a site that is or if you would like to free line sermons visit W.W.W. body of verse.


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