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How much does it cost to form a not for profit corporation [foundation]? What is the proceedure?
I am working with the estate of a famous Fine Artist and the Estate wishes to form a foundation and place all of the artwork presently owned by the benificiaries of the Estate under the ownership of the Foundation for purposes of educational museum exhibition, scholorly research, etc...
What type of foundation should we form for this purpose? How much should we expect our lawyer to charge? There are about 150 artworks and 1 piece of real estate that will be intitially contributed to the foundation.
We will be working in the state of Michigan when forming the foundation.
The benificiaries of the Estate are also willing to provide substantial funding to the Foundation for its upkeep and promotion.
The first thing is, a not for profit corporation and a foundation are two different entities. Of course the philanthropic foundation is not for profit but operates under different rules. Foundations usually have endowment monies invested to provide ongoing income to the foundation so the foundation can then disperse the money to its philanthropic projects. Not for profits usually are operating as a service corporation or providing actual work and are supported by ongoing donations, sometimes from foundations and or charges for their services. Not for profit is an IRS designation that provides some forgiveness of federal and frequently state taxes. Foundations operate in a different financial realm and have more complex rules that the 501 (c) 3's which are the not for profits. Thats mostly what I know, the IRS can give you much more information as can some foundations that are community based. Where I live there are community foundations that provide service groups money on a county by county basis and most of them would happily discuss with you the basics for establishing a foundation. A 501 (c) 3 designation from the IRS is obtained by application with articles of incorporation, listing of corporate missions and a board of directors which is defined in the IRS rule which the IRS will provide to you free of charge. The application fee for the 501 (c) 3 designation is around $750. Foundations cost more as well, but then the foundation assets are protected, how...I am not clear on, its both a financial protection as well as an organizational protection. Most not for profits have few assets. The foundation as curator for the artwork will need to have some working capital, like an endowment for the preservation and housing of the artwork, maybe the real estate could be sold to provide the endowment. Or...maybe the beneficiaries will be willing to donate the items to an existing foundation with caveats concerning the preservation and use of the artwork and real estate. Sometimes that is easier than trying to create the foundation from scratch, and the already existing foundation should have the protections in place for the items preservation. Sorry I couldn't be more help, but thats a start, anyway.....6 years ago