American Colombian Academy: Officially a Licensed 501(c)(3) Nonprofit!
We did it! After applying and waiting for everything to be reviewed, American Colombian Academy has been certified as 501(c)(3) legal tax-exempt nonprofit!
That’s cool and all, but what does it exactly mean for ACA Explorers?
501(c)(3): Tax-Exemption and Deductions, Transparency and Accountability, and the Nonprofit Board Structure
There are plenty of benefits that being a legally-recognized nonprofit bestows. Here are a few:
Tax-Exemption and Tax Deductions
Off the bat, the best news is that we are now ‘tax-exempt.’ Now that doesn’t mean American Colombian Academy no longer has to worry about ‘filing taxes.’ In fact, we are required to be quite transparent and file a Form 990 every year.
But we don’t have to pay taxes on donations we receive. This is likely the biggest benefit of getting 501(c)(3) status, and also why its a tricky approval process in the first place: the IRS needs to make sure you are legit before just letting you call yourself a nonprofit and skipping out on taxes.
Tax Deductions are also a great benefit as now donors can consider donations given to us as a charitable donation and deduct it from their taxes (in fact, with new Tax Law, there is a benefit to donate more as the standard deduction has increased). Furthermore, company matching is a policy many companies have that matches 100% or more of your donation – to an approved charity!
For more information, check out How Do Donations to a 501c3 Work in Taxes?
Transparency and Accountability
Being a 501(c)(3) also comes along with quite a lot of responsibility. Every donation/fund/grant we receive will be publicly available for viewing, as well as what that money is being used for. In fact, you can pull up Form 990s on any 501(c)(3) charitable organization throughout their history.
With that transparency, also comes accountability. The IRS checks in on you and you will need to be prepared: articles of association, organizing documents, board policies and meeting minutes, et cetera. They are but a phone call away willing to help but you must seek it out.
The Nonprofit Board Structure
One of the biggest changes, and challenges, is the nonprofit board structure. The way a nonprofit is set up is quite different from that of a for-profit corporate entity. It is much less hierarchical. The board consists of different roles and each board member gets an equal vote. Founders, such as myself, are discouraged from being on the board, which has also been a stretch for someone so emotionally/mentally/spiritually/existentially involved with a project like what the ACA Explorers has become.
Currently, we have three trustees and will shortly be announcing four board directors for the positions of: President, Vice-President, Secretary, Treasurer. While each role will be different, initially (as this is a new nonprofit and none of us have served on nonprofit boards in the past) this will be slow-going as there is indeed a big learning curve to overcome.
However, while having a board does forcibly wrest some control from my grasp, it also more greatly secures the future of American Colombian Academy and the ACA Explorers. Now that there are several people involved, the burden is shared, and hopefully the burden of fundraising is taken off of my shoulders. It is also bad ‘optics’ if the Founder/Executive Director is the one focusing more on fundraising and less on day-to-day operations.
What The Future Holds
With each successive board meeting, my hope is that American Colombian Academy is further and more richly defined as a nonprofit charity. Quite literally, we are writing the ‘Constitution’ for American Colombian Academy, so it is going to take some time. But this idea is multigenerational. My life mission is that in 100 years from now, there are still ACA Explorers out there and the program itself is extensively national and international. Each successive board will hopefully further be able to flesh out the direction and changes we need to make in order for this dream to become reality.