8940 -The Walk Out

We are struggling with our fundraising here at the Community House, and so we invite you to donate if you feel the goodness in what we are doing here.

But we are not trying to rely only on public support.  We have been seeking grants.  This tripped us up when we tried to submit a grant to the Community Foundation a group here in central Illinois.  They stated they would not grant to Foundations.  Not even operating foundations.  So what do we do?

I have signed up for the "Assurance Program" at the Foundations Group, the organization that helped me start this project, and they have hopped on board to help me through the process of what we call "A Walk Out."  Here I am transitioning from a private operating foundation to a public charity.  In case you are wondering, the paperwork that needs to be filed with the IRS is an 8940.

Certainly, the first year I was obliged to be determined as a Foundation given that the entirety of our funding came from an individual endowment, funds that had been left to me as an inheritance from my step-mom Sue.  But now that we are up and running, the goal is to become more of a publicly supported organization.

When I first asked about this, I was somewhat shocked to learn that the process takes 5 years.  Five years of operating as a public charity before we will be formally designated as such. So, if that is the direction I want to go, now is the time to get started.  Can we do it? That is the question of the day.

Here is a little piece of information, a total of 1/3 of the revenue stream needs to come from small donations (less than 5,000/ person), however, if a person donated 10,000, then 5,000 can still fall into the 1/3 bucket.  Also, if you are charging fees for any of your offerings, those go into the publicly funded bucket as well.  Finally, if the NFP is already holding assets, including cash, they are not included in the overall revenue stream.  So, if I want to create one last endowment now, before the walk-out, those monies won't be held against our determination as a public charity.  

Looking at the entire picture, I believe this goal of meeting the standard of public support shouldn't be too hard to accomplish. 

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