CockadoodleMoo.org

Our first 501c3 application got rejected. This is no big deal. Generally, you get a letter from the IRS detailing additional information they want. We found it helpful to call the agent listed at the top of the letter and talk directly about our application. Here are some things we should've done in our first submission:

1. Make it clear that you are not going to use charity funds to improve your own property: Many charities first starting out are run by a couple out of their own property. But, if you have a farm sanctuary on your own property, for example, any permanent structures such as animal pens and fences CANNOT be built using sanctuary funds. This is considered improving (or increasing the value of) your own property and is a conflict of interest. So, spell it out in the application: No donations will go to improve the property of board members.

2. Make it clear you are not going to pay board members or their families: There is a conflict of interest if board members (or their family members) get paid by the charity to do anything. We had down that I would receive $1 a year as president. Even that sets a bad precedent. You don't want a brother-in-law being paid to do construction work. You don't want the treasurer paid for cleaning pens. Only people not on the board of directors (or related to them) can be paid.

3. Make it clear that the board won't be dominated forever by one family: Many charities start out as the dream of a couple so they make themselves the main board members in order to control the vision of the charity and they most of the labor. This is great. But what if you die in a car crash? Who is going to take care of the animals? How will the charity continue? Spell out a plan to transfer power out of your hands. In our case, we said that when CockadoodleMoo is self-sufficient from donations for three consecutive years, we will step down from the board. (At that point, we would likely continue on as full-time paid managers/workers of the sanctuary.)

4. Be as simple and unambitious as possible in your application: You can always grow and change, but at the outset, there's no good reason to include things like that you're going to sell T-shirts to raise funds or that you'll have a newsletter. This just requires you to put in further explanation, such as putting in safeguards so you won't profit from the T-shirts (remember: you're a nonprofit) or that you won't have advertisements in the newsletter (even ones from people who donate services to the charity).