If you are responsible for organizing a class reunion, you have the option to set up the reunion as a nonprofit organization. Organizing as a nonprofit will allow the organizers to open a bank account and avoid personal liability. Further, local businesses may be more likely to donate goods or services to your reunion if it set up as a nonprofit. However, you should be aware of a number of restrictions and filing requirements for nonprofits before organizing as a nonprofit organization.
Research Nonprofit Requirements
Before you begin the process to organize your reunion as a nonprofit, you should complete some research to ensure that it is appropriate. Each state has different restrictions on nonprofit organizations, and you should contact the secretary of state where the reunion will take place to find out the rules and regulations for nonprofits. In many states, nonprofit organizations are required to have a board of directors. Most states will prohibit income from being distributed to any individual apart from reasonable compensation for services performed. If you eventually dissolve the organization, generally you are required to distribute the assets to another nonprofit or to a government agency.
Incorporate with the State
If you determine that a nonprofit is an appropriate structure for your class reunion, you must incorporate the organization with the state. The filing requirements and filing fees will vary by state. In most states, nonprofits must file articles of incorporation with the secretary of state. In the articles, you will list the organization's name, address, names and addresses of the organizers, and the purpose of the organization. If you plan to pursue 501(c)(3) status with the Internal Revenue Service, you must also include provisions that you will not participate in political activity, no board member or officer will receive income apart from reasonable compensation, and that the assets will be distributed to another nonprofit or government agency upon dissolution.
If your organization will plan more than one class reunion, you may benefit by becoming an exempt 501(c)(3) organization. However, the application process and filing fee is likely too burdensome for a single class reunion. Organizations that have 501(c)(3) status avoid federal business income tax, and donations to the organization are tax deductible for the donor. Your organization must have a charitable purpose to be recognized as exempt. For example, the income from the reunion could go to pay for scholarships for kids who graduated from your high school. To pursue 501(c)(3) status, the organization must first apply for an employer identification number from the IRS. Then the organization will fill out Form 1023, which requests detailed information on the nonprofit's finances, activities, board of directors, and fundraising efforts.
Record Keeping and Reporting
Every nonprofit organizations, 501(c)(3) or not, must keep detailed records on its finances and minutes from all board meetings. In most states, nonprofits must file an annual report with the state with updated information on board members. If the organization is recognized as a 501(c)(3) organization, you must file an annual exempt organization return, with detailed information on the organization's finances.
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