Q: Do I need an EIN to help raise funds for others?
Question: "How do I setup an EIN to use for donated money intended to help a refugee buy a house?"
Answer: This is a question that requires a bit more information, before it can be answered. If you were under the impression that all you need to become a "nonprofit, tax-exempt" organization is to get an EIN, well, just getting an EIN is not even close!
An EIN or FEIN is a Federal Employer Identification Number. According to the IRS, and EIN number is: "A nine-digit number assigned by the IRS. It is used to identify the tax accounts of employers and certain others who have no employees. The IRS uses the number to identify taxpayers who are required to file various business tax returns." For the most part, you get an EIN when you plan on employing staff/employees, or if you plan on forming a nonprofit organization or a corporation. However, obtaining an EIN for a nonprofit organization does not, in and of itself, make you a nonprofit, tax-exempt organization. For THAT to happen, you need to follow some state laws and file their forms, then formally request tax-exempt status from the IRS...and THEN, once approved, you can say you're a full-fledged 501(c)(3).
INTERESTINGLY, however, if, for example, you're working with a refugee family, and you want to help them raise funds to buy a house, then you do not, in most cases, need to be a nonprofit, tax-exempt organization. You don't need to be anything at all! Speak with a local bank account manager and tell them what you're trying to accomplish, and discuss the options with the refugee family. Ask the bank manager to serve as the trustee and they will then setup an account that will be managed by the bank. Part of the process will most likely include obtaining an EIN number, and you can do this yourself by filling out the online SS4 form. In many cases, the bank will take care of this for you.
Then all you need to do is inform people they can contribute to the "cause" by sending money to the account at the bank. The bank manager will act as trustee and manage the funds, and when the time is right, guide the family with respect to buying their home.
Have a question or need help setting up your tax-exempt, 501(c)(3), nonprofit organization? Call us at 1.865.408.8833, Comment below, or email us directly, and we'll get back with you ASAP! Just click This email address is being protected from spambots. You need JavaScript enabled to view it. to send an email!