Pushpo Organization has been registered in the state of Michigan as a nonprofit corporation. But that is only the first of many steps, here are some of the remaining things we need to do and the challenges that are facing this organization in providing you peace of mind and some tax credits.
Getting a bank account
We understand that it’s not ideal to send money to an individual. There’s no official paper trail and you have no recourse if the money is spent for illegitimate reasons. I also don’t want to receive your money directly and fall under scrutiny from the government. We’re working to find a cost-effective solution for this where we don’t have to maintain a large balance and/or pay fees to a bank.
Work on our bylaws
You’d be surprised how little is required to start a non-profit corporation in Michigan, and how much is required to gain and maintain a 501(c)(3) classification with the IRS. This gap is huge and we’re working to cover this gap. One necessary component is a clear set of bylaws that outline the responsibilities of the board members, and clearly state what will happen to any of your contributions left in the coffers on the dissolution of this organization.
Add more non-family board members
We could register as a private non-profit, but that would mean that you’d only be able to write off up to 30% of your Adjusted Gross Income rather than 60%. To be eligible as a public charity, we need more board members who are not family.
Establish a relationship with an organization in Bangladesh
Right now we deal directly with the fierce mother and send them money through Moneygram. This peer-to-peer money transfer is not ideal for the some of the same reasons why you wouldn’t be comfortable sending your contribution to an individual rather than a bank. But more importantly, it will prevent us from getting 501(c)(3) status with the IRS:
You do not qualify as tax exempt if you are organized or operated for the benefit of private interests such as designated individuals, the creator or his or her family, or shareholders of the organization. For example, you may not set up a scholarship program to pay for the education expenses of a designated individual, such as a contributor’s family member. See Rev. Rul. 67-367, 1967-2 C.B. 188.
That is exactly what we’re doing and we need to stop doing that. Instead we need to work with the school or an organization to help funnel the money to the right mothers.
Applying for the 501(c)(3) status with the IRS
This is actually the easiest step, once the other hurdles are overcome. There’s a short form, a small fee, and a wait time of a few months. This time can be shortened if we spent money that we don’t have on a firm that has is well known by the IRS. In the meantime, we’re learning a lot and we thank you for your patience and trust as we go through the process.