Requirements
1. By-Laws and Mission Statement
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By-Laws
When forming a 501(c)(3) as a neighborhood association, it is important to create clear and comprehensive by-laws. Bylaws are a set of rules that govern the internal operations of the association. They outline the purpose of the association, the roles and responsibilities of members and leaders, how meetings will be conducted, and procedures for making decisions. Bylaws should be tailored to the specific needs and goals of the neighborhood association, ensuring that all members are on the same page.
When applying to be a 501(c)(3), you must has a dissolution clause in your bylaws. This clause must specify that upon dissolution, all remaining assets of the association will be distributed exclusively to other qualified 501(c)(3) organizations with similar charitable purposes. Example clause:
"Upon the dissolution of this organization, assets shall be distributed for one or more exempt purposes within the meaning of IRC Section 501(c)(3), or corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose."1
Mission Statement
Another important aspect of establishing a 501(c)(3) is developing a strong mission statement. A mission statement is a concise description of the purpose and goals of the association. It should be inspiring, clear, and reflective of the values and objectives of the neighborhood association. A well-crafted mission statement will guide the association's activities and help communicate its purpose to the community, donors, and other stakeholders.
By carefully drafting bylaws and a mission statement, a neighborhood association can establish a strong foundation for its 501(c)(3) status. These essential documents will provide structure, clarity, and direction for the organization, helping to ensure its long-term success and sustainability.
1. Internal Revenue Service, “Does the Organizing Document Contain the Dissolution Provision Required under Section 501(c)(3) or Does State Law (in the State Where the Organization Is Legally Formed) Satisfy the Requirement?,” IRS, January 15, 2025, https://www.irs.gov/charities-non-profits/does-the-organizing-document-contain-the-dissolution-provision-required-under-section-501c3-or-does-state-law-in-the-state-where-the-organization-is-legally-formed-satisfy-the-requirement, 1.