Every charitable foundation or similar nonprofit project must be established with a specific mission.
Charities operate in many areas, which includes, but is not limited to:
- Religion.
- Education.
- Health.
- Service areas.
- Scientific research.
- The field of ecology and environmental protection.
- Prevention of cruelty to children or animals.
- International Relief.
The U.S. regulatory framework for charitable activities is based on English law and stipulates that charitable purposes must benefit the society.
The establishment of a charitable foundation in the States is governed by legislation that includes:
- Federal law;
- The laws of each of the 50 states (and the District of Columbia);
- local laws of cities and counties.
The establishment of a U.S. charitable foundation is done using entities such as trusts and companies created under state law. Each state has its own laws governing the creation, management, operation, and taxation of such entities.
A charitable organization that meets the terms of the Internal Revenue Code (IRC) may receive an exemption from federal and state income tax. There are some exceptions to such rules, which qualified professionals can inform you about in more detail.
For IRS purposes, such organizations may be classified under the following criteria:
- “public charities,” which receive funds from the state and the public;
- “private foundation.”
A private foundation is usually a registered non-profit organization in the United States. It is controlled by (and receives funding from) a family or a limited group of individuals. If you intend to establish a non-profit private foundation in the U.S., it is important to note that such entities must comply with certain operational restrictions.
If the registration of a charitable project in the USA is not initially tied to a particular state, then it is worth paying attention to the list of the most popular jurisdictions for this activity.
The most favorable states for NPO registration procedures in America are Delaware, Arizona and Nevada. Many foreign individuals prefer to establish a charitable foundation in Nevada, as it is possible to submit electronic documentation (as opposed to Delaware). Also, in order to register a nonprofit organization in Nevada, it is not necessary to post the registration information to local publishers (unlike Arizona).