EXHIBIT TO OPERATIONAL PROCEDURE
Procedure No. & Subject:
KJA-OP-1
Exhibit Code & Description:
EA
Parent Booster Clubs
Organizations
and Other School Support
Establishing a Non-Profit Organization
The body of this exhibit appears on the following pages.
Cross References
Originating Division(s):
Business and Finance
PHOENIX UNION HIGH SCHOOL DISTRICT NO. 210
Legal References
Date Iss.
8/23/11
Date Rev.
Mon 3/14/2016 6:06 AM
Page i of i
KJA-OP-1 EA
Establishing A Non-Profit Organization
A Parent/Booster Club Organization can establish itself as a Formal Non-Profit Corporation or an
Informal Non-Profit Association. The advantages, disadvantages, and requirements for each are
detailed below:
Formal Non-Profit Corporation
Advantages
1) Tax Deduction for donations to organization
2) No personal liability for corporation board and officers as long as acting as a reasonable,
prudent person
3) Eligible for a bulk mailing permit from the U.S. Postal Service
4) Enhanced credibility with community
Disadvantages
1) Expensive and time consuming to establish
2) Requires diligent annual reporting to the Arizona Corporation Commission and the IRS by
officers and board with penalties attached for non-compliance
Process:
1) File Internal Revenue Service (IRS) Form SS4 to obtain a Taxpayer Identification Number. Toll
Free Number 1-800-829-4933 or Web Site www.irs.gov/
2) Contact Arizona Corporation Commission for application for Non-Profit Corporation, 1300 W.
Washington St., Phoenix, AZ 85007-2929, (602) 542-3135. Web Site www.cc.state.az.us/
3) Develop the Constitution, adopt a set of organization By-Laws, and establish officers of the
organization.
4) File application and Articles of Incorporation with the Arizona Corporation Commission (filing
fee involved)
5) Establish checking account with two signatures required on all checks.
6) After receiving stamped and approved Articles of Incorporation from the Arizona Corporation
Commission, publish the Articles in a local newspaper three (3) consecutive days, to establish
501(c)(3) Non-Profit Tax Exempt Organization.
7) File IRS Form 1023 “Application for Recognition of Exemption” with the Internal Revenue
Service
(application
fee
is
involved)
http://www.irs.gov/charities/article/O,,id139504,00.html
8) Annual report is required by the Arizona Corporation Commission listing current officers and
including financial statements. (Annual fee required.)
9) Annual Financial Report is required to the Internal Revenue Service. (IRS Form 990). Tax
exempt booster clubs with gross receipts/income of $25,000 or less during the fiscal year may
file IRS Form 990-N e-postcard.
PHOENIX UNION HIGH SCHOOL DISTRICT NO. 210 Mon 3/14/2016 6:06 AM
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KJA-OP-1 EA
Establishing A Non-Profit Organization
Informal Non-Profit Association
Advantages:
1) Inexpensive
2) Simple to establish
Disadvantages:
1) Donations to organizations are not tax deductible.
2) Personal liability can attach to officers and board if negligence is established.
3) Board members can be held personally responsible for contractual obligations, which they have
signed.
4) IRS may determine that annual net income of the organization is subject to Federal Income
Tax.
Process:
1) File Internal Revenue Service (IRS) Form SS4 to obtain a Taxpayer Identification Number. Toll
Free Number 1-800-829-4933 or Web Site www.irs.gov/
2) Develop the Constitution, adopt a set of organization By-Laws, and establish officers of the
organization.
3) Establish checking account with two signatures required on all checks.
PHOENIX UNION HIGH SCHOOL DISTRICT NO. 210 Mon 3/14/2016 6:06 AM
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