Getting 501c3 status is an essential first step if you want to launch a nonprofit organization in Hawaii and carry out your objective. A nonprofit organization can apply for grants and accept tax-deductible donations if it has the federal tax-exempt designation “501c3.” An instruction manual for obtaining a 501c3 in Hawaii is provided below:
Select a name and submit your articles of incorporation in Step 1
. You must first create your nonprofit organization before you can apply for 501c3 status. Choosing a name and submitting articles of incorporation to the Hawaii Department of Commerce and Consumer Affairs (DCCA) are required steps in this process. Your nonprofit’s mission statement, board of directors, and other crucial details should all be stated in the articles of organization.
Obtain an EIN in Step 2 Your nonprofit organization will receive an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). On the IRS website, you can submit an online application for an EIN.
Step 3: Submit an application for tax exemption You can apply for tax-exempt status after forming your nonprofit organization and obtaining an EIN. The application for 501c3 tax-exempt status is on IRS Form 1023. The goal, operations, and finances of your business must be covered in great depth. Currently, the application price is $600 for organizations with three-year projected gross receipts of $50,000 or more and $275 for organizations with projected gross receipts of less than $50,000.
Step 4: File a state registration form You must register your nonprofit with the State of Hawaii as well as get federal tax-exempt status for it. The Hawaii Attorney General’s Office must receive a Charitable Organization Registration Statement, together with payment of a registration fee.
What distinguishes the 501c3 and 501c7 organizations? An IRS-approved category of tax-exempt nonprofit organization known as a “social club” is a 501c7 entity. 501c7 organizations cannot seek for grants or accept tax-deductible donations, in contrast to 501c3 organizations. 501c7 organizations are typically membership-based groups like fraternal organizations, country clubs, and interest groups.
What distinguishes a 501c3 from a 501c5 organization? An IRS-approved tax-exempt nonprofit organization known as a 501c5 is one that qualifies as a labor union or agricultural group. 501c5 organizations can qualify for various types of grants but are not qualified to receive tax-deductible donations. In contrast to 501c3 organizations, 501c5 organizations are permitted to take part in political activities including lobbying and endorsing candidates.
How many nonprofit organizations exist in Hawaii? As of May 2021, there were 5,454 nonprofit organizations officially registered in Hawaii, according to the National Center for Charitable Statistics. These organizations, which have a variety of purposes and activities, range in size from small community-based groups to huge statewide organizations.