The US Virgin Islands offer a unique opportunity for non-profit organizations to make a difference in their community. Establishing and running a successful non-profit organization requires careful planning and compliance with certain legal requirements. In this article, we will discuss the steps needed to set up your non-profit organization and become a tax-exempt organization, as well as the necessary experience and skills of board members, the importance of record keeping, and the ability to generate revenue. The incorporation process is done through the office of the Secretary of State in most states. The tax exemption is granted by the IRS.
If you need more information, read our “How to Start a Nonprofit Organization” pages (links above and to the right). It is essential that your organization keeps accurate records to avoid legal trouble due to poor record keeping, participation in inappropriate activities, or non-compliance with the rules of its structure. When applying for tax exemption, you must provide four years of actual, anticipated, or estimated budgets to assess the charitable status of your organization. The IRS also requires that board members have a certain level of experience and relevant skills, which could include the participation of an erudite professional, such as a lawyer, an accountant, a marketing expert, or someone with deep knowledge in their programming areas. Additionally, they must have certain personality traits that suit you and your organization. It is less well known that nonprofit organizations can generate revenue through the services they provide.
Your organization's statutes are a set of rules adopted to regulate its affairs and the behavior of its members. Generally, an organization uses the final indirect cost rates of the previous year as the new interim rates (until they are modified).When allocating indirect costs, it is important to consider that if all or a substantial portion of your organization's federal grants are expected to expire before the transferred adjustment can be made; or if the combination of federal and non-federal work in your organization is too erratic to allow for equitable carry-over adjustment; or if your organization's operations fluctuate significantly from year to year; then a fixed fee should not be negotiated. Separating your organization from the rest is an important part of establishing yourself in your community. Expenses for general executive and administrative offices (G&A) should be incurred for other expenses of a general nature that do not relate solely to any major function of your organization. When indirect costs benefit core functions to varying degrees, they must be accumulated in separate indirect cost groups. Once knowledge of a particular non-profit organization is assigned to an agency, it will not change unless there is a change in the dollar volume of federal grants to the organization for at least five years. In addition to following all legal requirements for setting up and running a successful non-profit organization in the US Virgin Islands, it is important to have an effective strategy for managing resources and generating revenue.
This includes having experienced board members with relevant skills and knowledge, keeping accurate records, allocating indirect costs appropriately, and creating an identity that sets your organization apart from others.