The creator has a fiduciary duty to act in the organization’s best interests as a board member. They must, therefore, prioritize the demands of the organization over their own individual interests. The founder of the group, however, might have a personal interest in the organization’s success. If the founder’s personal interests collide with the organization’s best interests, this may lead to a conflict of interest.
The board must develop clear policies and procedures for resolving conflicts of interest in order to prevent them. This can entail mandating that board members disclose any possible conflicts of interest and abstain from deliberations and decisions involving those conflicts.
The IRS doesn’t charge anything for 501(c)(3) tax-exempt status applications. However, there are costs involved with submitting the required paperwork and hiring a lawyer or accountant to make sure the application is proper and complete. Depending on the organization’s complexity and the desired level of help, these prices may change.
Nonprofits must continue to comply with certain rules in order to keep their tax-exempt status, in addition to paying the application-process expenses. This may entail submitting annual information returns and adhering to additional tax laws and rules. Overall, while forming and running a nonprofit organization might be expensive, the advantages of having a tax-exempt status may outweigh these expenses. A variety of tax benefits are available to nonprofit organizations, including exemption from federal income tax, access to grants and donations from foundations and other donors, and the capacity to recruit and keep exceptional personnel through tax-advantaged compensation plans.