Know about 501(c)(3) corps? I need a pointer

William Jenks

I know there's got to be a pile of lawyers in EN and I need a little general advice.

In short, we have reached a legal bump in establishing our permanent Timothy Jenks Memorial Scholarship...and I'm not asking for "legal advice"...just a pointer or two to get us headed in the right direction.  (If you aren't aware: our 13 year old son Timothy was killed last summer while training for a triathlon and we are trying to establish a permanent memorial Scholarship/Award in his honor.  For the last 6 months, we have been trying to establish the mechanism for this, and have run into multiple stumbling blocks.)

Under Iowa's (and I assume federal) code, in order to use the most favorable type of Foundation account to maintain the endowment of this fund, the recipient of the funds has to be a governmental agency or a 501(c)(3) corporation.  Initially, the (public) school we are working with agreed to accept the funds to give out as a scholarship/award, but as of yesterday they decided that they could not do so, because if they received the money, they were obliged to spend it in the state's interest, which did not include giving it away to deserving kids.

There is a "Education Foundation"  which is a 501(c)(3) in our town, but as a policy matter, they are trying to get rid of all their scholarships — they want to focus on raising money for new band instruments, playground equipment, etc etc.  We think this is a meritorious activity, but it's not what we want to do. Their decision leaves our area with no organization that will administer endowed awards like the one we are trying to establish.

There are other 501(c)(3) corporations that I know would work with us...e.g., the soccer or swimming clubs, but there are plusses and minuses about that.

Cynthia and I decided that we were willing to establish our own 501(c)(3) for the purpose of administering memorial scholarships, awards, and similar things...of which the TJMS would be the first...and then we could approach the Education Foundation after we had a record and offer to relieve them of the scholarships they didn't want to deal with, etc.  It would exist as a partner for our local Community Foundation to provide a mechanism to make permanent memorials or other related kinds of disbursements.  We don't imagine it being structurally anything more than a board of half a dozen volunteers with a corporation paper and a bank account.

So my question is — can a 501(c)(3) be established to do this?  How do I find out or find a model?

We are not afraid of the paperwork involved in setting up a 501(c)(3) corporation in general; Cynthia did it about 5 years ago for what was then our school's PTO.

Why am I asking here instead of going straight to a lawyer? For the obvious reason that I want to keep expenses down and I want to know where to start and not waste thousands of dollars doing something that it will turn out I cannot do.  We live in a great community in Ames, but I also live in the great community of EN and I just need some help getting started.

Please feel free to answer here or by PM if you can provide any guidance.  My email is wsjinames@gmail.com and my phone number is 515-451-4711

Mike Roberts

William,

I play a lawyer at work and have helped a lot of people set these things up on the side.  Never in IA.  It's pretty straightforward, and most states have set up easy processes to help what are typically ordinary folks trying to do good.  Start with the state and create the entity, if you have not already.  Look at the Secretary of State website (https://sos.iowa.gov/nonprofits/MinCodeReq.html) or just call them and file the paperwork to create a non-profit corporation (fee is probably pretty nominal). Once the state part is done, you just need to apply with the IRS to get a tax-exempt number.  http://www.irs.gov/pub/irs-pdf/p4220.pdf.  That will effectively become the organization's SS#.  It too is a pretty simple process and takes a few weeks to get results (unless, of course, it's tax season, then who knows?).  Operating the 501c3 is also fairly straightforward, but you have to keep good records and file federal and (likely) state tax forms and/or annual reports. If you get stuck, feel free to PM me.  But, again, the Secretary of State's office is usually a really good place to start, as I have found them to be very helpful and supportive.

Best of luck.  Hope this is a little help.

Mike

jfields74

William- I have some friends that did a very similar thing to honor their young daughter that passed away 2 years ago. They established a 501(c)(3) to do something similar to what you and Cynthia are trying to do. I'll give her your contact info if you'd like and maybe they could offer some pointers on getting it setup.

William Jenks

Thanks so much guys. The big question I had - which was basically whether a 501c3 could be established for this purpose - appears to be answered in the positive. I got a couple of PM replies, too, so I think it's all good.

Thanks so much.