Top 10 Mistakes People Make When Setting Up And Operating A Nonprofit

Welcome back to the Anderson podcast. My name is Toby Mathis and I am joined by Karim Hanafy. Welcome back, sir. Hello, thank you. It's great to be back. All right. Today, we're going to go over the top ten mistakes that people make when forming and operating a nonprofit. Since Karim is an expert in this area at that, there's nobody better to have come in and discuss it. So in just a few lines, what is your background in the nonprofit world? People should know and they might remember that you're

an attorney. But. But what gives you specific credibility here? Well, I've been working in this area for over 20 years, and I did start at the IRS. I was in the tax exempt and the government entities division where we basically just reviewed application points for exemption, the 1023 applications for organizations that want to become a five and three. So I reviewed hundreds and hundreds of different types of applications, public charities and private foundations. So I've seen everything I belie

ve I have, you know, and not only within the IRS, but in private practice as well. I've been in private practice for 15 years now and again, you know, working with clients to set up these nonprofit organizations, to set up these five or 20 degrees and apply for exemption. So I feel like I've seen almost everything you can imagine because I've looked in probably reviewed and prepared over 1000 applications up to this point easily. Wow. So you have a little bit of experience in that area. You came

from the IRS and you've seen a ton of mistakes probably made. So let's dove into it. So we wanted to go over ten. We're going to go over ten top ten mistakes. Not in any particular order. Right. We're just going to go through the. Yes. All right. So let's go through him what he thinks. Number one. Well, the first one is and this is something that we've seen, I think, quite often when I was at the IRS is the improper structure from the very start. So many organizations think and I've seen this,

it's unbelievable. But for profit corporation has been a common thing that we had seen. Instead of what you should do is set it up as a nonprofit corporation, you have other options, but without a doubt the simplest is the nonprofit corporation. But instead we've seen organizations set up as a for profit. We've seen this as a B Corp, which is, you know, basically a for profit that's certified as a nonprofit. We've seen it also is LLC, even though it's very popular in the for profit area, it's no

t as popular within the nonprofit area and even trusts and you know of course the for profit in the because those are not permissible not allowed and then within within as an LLC, those cause some delays for the application process. So without a doubt the easiest is just set it up as a nonprofit corporation, you get all the benefits and you get the protections, you know, and as long as you fill out the, you know, you you prepare the articles of incorporation correctly and submit it, then it will

be approved and it's not going to be delayed like it would with other entities. And that's in a particular state. Right. Like when we're talking about filing a non nonprofit corporation, we're talking very state specific. Yes. It's not a federal filing. And then there's magic language you have to include in those. Right? Yeah. And that's the second mistake is the articles of incorporation. You know, you're completing it according to the state requirements. So and I can give you an example. If y

ou go to a state like Florida, so you're going to complete it according to the requirements for the state, but it may not be according to the IRS requirements. So if you apply it, Florida Articles of incorporation, they have a template. They're going to set it up as a nonprofit corporation, you fill out the form, you fill out everything that it's required that's asking you to do it from the name of the organization, the address, the officers, the charitable purpose, and then a registered agent.

And you include all of that and you submit it. Well, the Florida secretary of state will approve it. But the problem is that even though it's going to follow the state requirements, that doesn't follow the IRS requirements. Specifically, the IRS wants some additional language in there. They want you to include, at a minimum, the dissolution clause, which states that if the nonprofit ever dissolves, the assets of this nonprofit must go to another five or 1c3 organization, because if you don't inc

lude it, then it means that the nonprofit could take these taxpayer dollars and give it to the officers and directors. And the IRS does not want that. And I can tell you, when I worked at the IRS, how many times we had seen the articles of incorporation that were deficient because it didn't include the dissolution clause. And they would always tell us, you know, it was approved at the state level and which is a valid point, but that's only necessary to help you set you up as a nonprofit. That's

a state term. If you want to be a501c3, you have to include the dissolution clause. So in a state like Florida, it can take five weeks to get the articles of incorporation approved, but to revise the articles of incorporation to add that dissolution clause, it can take up to 12 weeks. So imagine five weeks plus 12 weeks plus another six months that it takes for the processing times with the IRS. You're looking at up to a year that your organization's 501c3 application can get approved. It can ta

ke up to a year simply because you didn't include the dissolution clause within the articles of incorporation. So it is extremely important that you get it right the first time to avoid any delays. So there's magic language in the articles of incorporation. You got to make sure that you're setting it up right. There's probably different there's variations with all the states, right? Depending on how many directors you can have, what they can and cannot do, where you should set it up, all that fu

n stuff. But then you also have to worry that the feds say it's not all just 501c threes out there, right? Yeah. Business organizations, fraternal organizations. You have black line societies. There's all these different types of nonprofits. What are there, 29 of them, or how many are there? Yeah, 20. Two, 29 different flavors. And so if you're going to be a five, a one seat, three, one of those flavors that's that's going to receive charitable donations. And you got to have that special languag

e in there. Let's talk about special language. What's number three? Well, the third the third most common mistake is describing your activities as being charitable. You know, a lot of times we've seen the application, again, whether it's with the IRS or in private practice. You know, a lot of times the organizations, they're describing it like it's an investor letter. You know, you're describing it as if it's profitable, how you can get a return on your investment sort of thing in your approach,

rather than describing it as to why the activities are charitable. And that's what's the important thing. It's not about a for profit motive, even though you can't operate, you know, with a for profit or you can be profitable, which is perfectly fine. But you have to explain exactly why the activities are charitable. You know, always tell a story, give the background. For example, you know, we see a housing shortage under built by 7 million up to this point, you know, and you see that there are

low income families who are getting priced out of this area, being able to afford a house. So perhaps your nonprofit wants to provide affordable housing for low income families. So you see that there's a problem, that there's the shortage. You see that there's basically the prices keep going up. The nonprofit wants to come in, will make housing available to low income families. Otherwise cannot find housing. Maybe they cannot afford it either. So you're working with them to provide the housing,

or perhaps it's medical costs. As another example, you can't afford medical insurance if you can't afford to pay for your medical bills. The nonprofit sees the need there and you're going to help to cover these costs or for students providing scholarships for students who can't afford an education as well. So you see, this is this is where the problems are. This is where the needs are. And the nonprofit has the solution. This is what they're going to do to fix it. You know, they're helping a ch

aritable class and organizations just don't do a good job of explaining how they are serving a charitable purpose and serving and benefiting that charitable class. They don't do enough of that, and they like to explain their backgrounds, you know, and what they're doing, their affiliations that they may have with other organizations. But again, not focusing on what the charitable activities are. Mm hmm. Okay. Okay. So we have the first three improper structure screwing up the articles of incorpo

ration, not putting in the magic language, and then they're not describing their activities. Right. Let's dove into number four. Yeah, the fourth is using the wrong terminology. Now, there may be words that you're using within the application, one that you don't realize is going to trigger a delay. For example, you can't use words like partnerships. They hate that the partnership to the to the to the IRS means you are working with a for profit entity. And the for profit entity has a for profit m

otive. They want to make money for their investors and their shareholders, whereas the IRS wants to see that the nonprofit has sort of control over it. So if there was ever a dispute between a for profit and a nonprofit that the nonprofit that has the veto power that is being done for a charitable purpose over a profitable purpose and motive. Are there other terms that you see, too, that caused this delay? Yes, the term advocacy. So advocacy can mean ten different things. But to the IRS, advocac

y means either you're working with candidates that are running for office, whether you are supporting or opposing the candidate. That's running for office, which is completely prohibited, or you're doing advocacy, which means that you are working with congressional members to pass a bill perhaps or maybe you're opposing and want to veto a bill or a law that's going to be passed within Congress as well. And this is considered to be advocacy. And you are limited to how much you can do in terms of

these types of activities. You can only do an insubstantial amount, which is which is a low amount. So when they see the word advocacy, they're assuming that you are doing these types of activities which can be prohibited altogether or you're limited by what you can do. And then finally, another example, which is an interesting one, is financial literacy. This is a term that the IRS looks at and they think of credit counseling and credit counseling as one that is under heavy scrutiny by the IRS.

And it has been for almost 20 years at this point, because they realize that credit counseling organizations and agencies, a lot of times they collect the fees upfront without doing anything to benefit and help the individuals who are having issues with their credit or with their finances. So, you know, financial literacy is actually a question that's asking the application in many organizations. If you check yes on that, it's going to get a delay because they're going to follow up with you abo

ut wanting to know whether or not you are a credit counseling organization. So what would you do instead. If you're. If you had somebody write financial literacy, but would you just say education? Yeah, exactly. And, you know, you can you can mention that that you are, you know, educating them. And rather than even using if you want to use financial literacy, you can't. But rather than doing that, another option is you can also describe the activities of what you're doing. Perhaps you're going t

o describe them about investing in the market, investing in real estate, how to repair your credit scores, you know, how to invest in into your 401. K. So you can always describe the types of activities that you're doing without actually using the term financial literacy. So through no fault of your own, you might say something as you understand it is financial literacy and you don't realize it's a buzzword for the IRS. Like anytime somebody says that, they do a deep dove and it's going to delay

it six months. Yeah. So somebody knows what they're doing. It deals with this stuff, says, yeah, here's the words we never use. So make sure that you don't use one of those words. How about this? Make sure you use somebody who knows what they're doing. Absolutely. Let's go to number five. What's number. Five? Number five is the improper classification. So as a501 C3, you're either a public charity or you're a private foundation. Both of them, you're going to get the tax benefits. But it's also

a good idea to get an understanding because it's not one size fits all. It's going to depend on what you want and what your objectives are. If, number one, your objective is tax deductibility, you want to get the deductions for your charitable contributions. Well, if you donate appreciated assets for example, let's say it's worth $25,000. That's how much you paid. And now it's worth $250,000. Well, within a private foundation, you can only deduct your costs, which is $25,000. But within a public

charity, you can deduct up to $250,000. The fair market value of that appreciated asset without having to pay taxes on it. So you get a more favorable deduction. So it depends on what type of assets you want to contribute into the nonprofit. And for one, number two, if you're going to operate internationally, well, it's going to be more difficult doing it with a private foundation versus a public charity. And then if you're applying for grants as well, it's going to be almost impossible to rece

ive grants if you are a private foundation, especially if it's a private foundation that is the funder, because they have to give out to other 501c3 public charities. They can't give it to other private foundations. What's an easy way to understand the difference between a public charity and a private foundation? Well, I mean, that it really is a classification number one on the application, on the 1023 application, it asks, how do you want to be classified? Are you a public charity or a private

foundation? And many people assume that the private foundation is because of the fact that it's funded by one individual. It's also funded and it's operated and controlled possibly by one family. This is the common characteristic. It's that what you see with a private foundation, however, you can have something like that within a public charity as well, is that you can have these characteristics within it. Initially, but you know, you have to be able to receive public funding and public support

. So you need to be receiving donations from the public, whether it's from individuals, whether it's from other nonprofit organizations, private foundations or government grants as well. So you need to be receiving that sort of funding within a public charity, whereas the private foundations typically don't receive that type of funding. It's usually set up by the founder with an initial amount that's being put in and it's able to sustain the operations of that private foundation for a number of

years. What if you have a charity that I think you mentioned, you know, housing and things like that and you're doing low income housing. Yeah, but if. You throw some houses in there, then it's producing income. Does that help at all or no? Absolutely it does, especially for a public charity. And the reason why is because if you receive funding for Section eight housing, for example, if you received from HUD, these are treated as government grants and not donations. And government grants work mo

re favorably than than individual donations. So absolutely, you can do that as a public charity. Alternatively, it could be a private operating foundation, which is also a very favorable classification. So you have one of these two options if you want to do affordable housing, but we're always going to recommend first and foremost, it would be the public charity because it's easier operationally and behaviorally for many of the clients to be able to operate as a public charity because you don't

have the same number of restrictions that you have as you do with a private foundation. Now, we do have clients who are private foundations that exist, but more of them are public charities because it is easier behavior for that. And you get a higher degree of deduction. If I give cash to it to to a public charity, I can write about 60% of my adjusted gross income when as high as 100% during the during COVID, whatever it may be, there's a there's a cash contribution is cut in half. Essentially,

it's like 30% when it's a private foundation. Yes, that's correct. So if you're donating money, you know, in you're a heavy giver, you might want to make sure that that will whether or not that that triggers. All right. Let's jump in to number six. I think we're at yeah. Number six is compensating directors and officers. Now within the application. It does ask if you will be compensating directors and officers. And, you know, there's nothing wrong. There's nothing prohibiting compensating direct

ors and officers. But what we've realized is that the reality is, you know, directors, officers, they don't tend to work that often within the nonprofit, generally speaking. You know, I actually worked with the Coca-Cola Foundation, one of their direct one of the directors was Warren Buffett. And he shows up for an annual meeting. And that's pretty much the extent of what he does, not too involved in any of the day to day operations and the activities that you see there. And that's typically how

directors are. But for many of our clients, you know, they're directors, they may be officers, but they're also involved in the day to day operations. So it seems that the appropriate fit for many of them is pay yourself as an employee, you're an executive director. You could be dealing with social media. You could be dealing with the management of the operations of the organization. You could be an admin, in fact, if you wanted to, because you're involved in the day to day operations. Whereas

a director, typically a couple of hours in a month, maybe a couple hours quarterly, you know, maybe even less than that, you're not really involved that much as a director. And even as an officer, you're not as involved, but as an employee, you are involved quite a bit. So, you know, my recommendation is first of all, again, compensating as a director and officer could cause a delay in the application process. But if you pay yourself as an executive director, for example, you know, that's an app

ropriate fit for the type of work that you're doing. So that's always our recommendation is pay yourself as an employee and not as a director or an officer. So as an officer and director, you just say, no, nobody's going to get compensated. But if you do work, it doesn't prohibit you from paying yourself as an employee. So on your application, just don't put that you're going to get paid. You're going to pay your officers and directors, right? Yeah. Yeah. Pay yourself as a senior. Yeah. Pay your

self as an employee, as an executive director, for example, if you want. Just say no to directors and officers. Yeah. Yeah. Nancy Reagan, just say no. All right. What's number seven? We're up to seven. Well, you got ten of these. Yeah, that could be more even. So the number seven is let's say you have the 501c3. Congratulations. You're exempt now, but perhaps you're not. You haven't done the activities and you don't realize it. Even though you haven't funded it, you haven't made any donations to

the nonprofit. You're still required to file a tax return. And we've seen many organizations that don't file their tax returns. And if you don't do it for three years, if you fail to file your tax returns three consecutive years, the IRS will automatically revoke your attention. So you would have to apply you have to reinstate your organization as it is. 523 And we have done this a number of times for many organizations that forget to file their own tax returns so their status has been revoked.

And in fact, you can even go to the IRS website and you'll see a number of them says order revocation is what it says on their because of the fact that they don't file tax returns. So you have to you have to keep up with your annual filings through your organization, even if you're not operating at this point, as long as you're 523, you have to file a tax return. Now, you still have to do it even if it's really small. Like if you're not making what is it, $50,000 worth of contributions? It's a

postcard, right? Exactly. It takes no more than 5 minutes to do it. The reason if you do it. Yeah, if you have to do the postcard, it will take more than 5 minutes for sure. All right. What number? So that's number seven. And let's just go back through it real quick. So improper structure, screwing up your articles, messing up the way you describe your charitable activities, using the wrong terminology, using one of these these trigger words that cause them to do a deep dove into improper classi

fication and then saying you're going to compensate the officers and directors and then not filing tax returns. What's number eight? Number eight is you should consult with an expert before you're going to make donations of certain types of properties or assets. For example, donating crypto has a reporting requirement that's different from donating stocks, even though there's a market that's available. And you can look at any time 24 hours a day, seven days a week, unlike the stock market, to de

termine what the price of crypto is, you still have to get it appraised by a qualified appraiser, even though you can find out what the price of it is. You have to use a qualified appraiser and you have to fill out specific forms as well. Whenever you are making donations, using, you know, making donations for something like crypto. In addition, if you donate property that has a mortgage on it, this can have a detrimental effect on you and your taxes. We have seen situations where clients donate

d the property that had a mortgage and when we ran the numbers, it turned out they actually owed money with this donation. Instead of getting a charitable contribution and getting a deduction for it, they actually owed money for it. So is that is that because the charity is now responsible for the mortgage or something? The mortgage relief? Well, what happens is that when it comes to a mortgage on their it's sort of a relief for what they're looking at. It is they're treating it as a sale and th

ey're treating it as a sale by the individual. So part of that sale kind of looks and it compares the mortgage that you have versus what you paid for. It. And they treat that as a sale, whereas the part that doesn't have the mortgage is treated as a donation. So it's a it's a really confusing formula as to how they do it. But the fact that you are donating the property with the mortgage means that they're treating it as a sale. That's not beneficial as it would be if you were selling the propert

y as if that was a primary residence, you know, because you do have the capital gains exclusion under that. You don't get that when you're donating it with the mortgage to the nonprofit. You're not you don't get that exclusion for that. So have somebody run the numbers before you do it. So you're saying don't like don't just give money to a charity. Actually, look at the tax ramifications of what if you do, there's everything from carryforwards like, hey, sometimes people give an asset that's th

at's a higher percentage of their income than they're allowed to deduct and they don't know what happened. You carry that forward for five years, things like that. You just want to talk to somebody who knows the rules. Yeah, it is a good idea because, you know, we can tell you what the deductions are. We said 30% of your adjusted gross income for non-cash and 60% for cash. But it's always good to run the numbers to see how it's going to work in your favor, because for the 30% of your adjusted gr

oss income that you'd see for the non-cash contributions, you may see that you're not going to be able to get that full benefit in the first year. It may have to be carried forward over the next five years. So it's always a good idea to speak with someone before doing that. So make sure that you're documenting appropriately. If it's over a certain dollar amount, you have to have an appraisal, right? So what's that dollar amount is. $5,000. 5000 bucks. So you got to be careful. Yeah. All right. W

hat's number nine? Number nine is the nonprofit forgets to send a donor letter to anyone who makes a contribution to the nonprofit. You know, whether and you see this in larger organizations, when you make donations, they send you that email that sends you a letter. But it turns out it's IRS compliant. The IRS required a certain language to be included within the letter, and the IRS requires the nonprofit. They require the donor to receive a donor acknowledgment letter any contributions that the

y make to a nonprofit organization. So, you know, the and it's not the nonprofits requirement, it is the donor requirement. But because of the fact that we know that donors don't always remember this rule, you know, it's important for the nonprofit to send that letter. So even if it's your nonprofit that you've set up and that you've donated, that nonprofit needs to send you a letter. And, you know, the IRS is disallowed and they've one time and time and time again that it doesn't follow the cor

rect rules and the requirements that the IRS requires for it can be disallowed. And we've seen it for as low as hundreds of dollars to millions of dollars where the IRS in these situations have one. And they acknowledged that a donation was made. They're not disputing the fact that the donation was made. That seems evil. Yeah, it is. You know, but it was disputed because they didn't follow the IRS rules and regulations to the requirements of what that letter must contain. It must contain such a

donor. Couldn't they argue mutual mistake between the charity and the donor and say, give me my money back? And I was mistaken that we both thought this was a deductible expense and it was predicated on the deduction and therefore it's like, don't you doesn't that get people in hot water, though? I imagine people are going to go back and. Yeah, I don't I don't think it would work at that point when you when you want your audited and you're down that path and you're down that. Road, that just see

ms really bad that you did. So I didn't get a letter. Usually it's a letter, though. It says what? Like it, you know, nothing of value is exchanged for, you know, that type of thing. Yeah. So for cash, if it's just a cash contribution, you want, you want yeah. You want to, you want to include the language. It says no goods and services were given in exchange. At a minimum, you need to include that. And if it is for non-cash, then again you need to require you need to follow the requirements wher

e you have a qualified appraiser and the appraiser has to fill out a form. It said it can be form 82, 83 or one of the forms. And and we've seen it was disallowed because the form was not signed. So the form was filled out, but it wasn't signed. So that became an issue and a problem as well. So, you know, it is it is a strict compliance rule. It's not substantial compliance under these cases. It's strict compliance. If you don't comply with this 100%, they can disallow it. And again, there was o

ne as high as $64 million that recently came out over the past year. So, you know, these are these are some pretty difficult these are harsh rules here. So you want to make sure that this one that. Seems really, really like there must be something else going on. Because if you're giving $64 million to a charity, you're doing good. The IRS doesn't imagine they wouldn't want to thwart that. But maybe there's something else going on with that individual. And they're saying, well, technically, we ca

n deny you this. Maybe they're using it as a tool, but it just seems like it flies in the face of logic. I agree it's a possibility, you know, but but I have seen disputes and I've worked with them as well with some of these disputes where they were a significant amount. And, you know, many times either what would happen is they would settle for a different amount rather than disallowing the full amount, or they would just allow for the full amount for it because of the fact that, you know, and

again, with each scenario, they weren't disputing the fact that it was made and that it was donated and one was highly publicized that I had dealt with as well. It was highly publicized about the donations. So the IRS knew about it. They wanted they were fighting the organization over over the fact that they had claimed that the didn't comply with the IRS rules and regulations and, you know, IRS publications. 1771 definitely highly recommend that you look at that to understand the rules. That's

horrible, but it's understood. So make sure that you do it. Yeah. I always assume that there's something else going on. Like maybe the value of the of the donation tanked, maybe it was FDX or something like that or somebody was doing it and they're like, oh, I get this big write off and the IRS is just finding a way to say no. What's the last one? I think that that was number nine. So we should be at number ten. Yeah, number ten is asset protection. You know, if you we've discussed about the aff

ordable housing assuming and let's assume that as a nonprofit you purchase one, two, three, ten houses, you know, don't, don't put them all into the same nonprofit. If something happens on the premises of one house, one property, then it's possible. And you face the risk that the creditor, if they win in a lawsuit, can take all the other assets to cover that lawsuit. So our recommendation and it's something that we certainly do with an Anderson very well is the asset protection put it in a as an

example a single member LLC that's owned and operated and controlled by that nonprofit. Now the fact that the organization is a501 C3 means that the single member LLC is are automatically going to be the 501 C3 as well. If they are owned and controlled by the nonprofit. So it's a simple process to do and it protects all of the other properties and assets that you have within that nonprofit. And it's often overlooked. So if you so just because it's a nonprofit, the nonprofit may offer you some a

sset protection from its activities. But if you have things in there that create liability, you're saying isolate them just like you would in any other business or in your own world. And it is a misconception, and I've heard it many times thinking that you can't sue a nonprofit or you can't recover from a sued nonprofits, which yeah, it's it's ridiculous. You can you can go after a nonprofit just like any other organization, and you can go after those assets just like any other organization. So,

yes, they are they are at risk as well. You know, whether it's the asset protection with a single member LLC or even the directors and officers insurance, something like that, these sort of things will at least, you know, kind of reduce the risks, at least minimize, you know, the liability that you would have in terms of any organization or any creditor coming after that nonprofit. Well, that was great. So we just did the top ten mistakes people make when forming and operating a nonprofit. That

's a pretty comprehensive list. I know you said that there was more, but I think that you just gave a lot of people a lot to think about. But just let me just run through them. So we'll go ten, 10 to 1. You ran over asset protection, making sure that you're isolating the assets inside that charity just like you would in any other in your individual realm or in a business. You still want to mitigate the the liability that comes with certain risk assets. Sometimes the the charity doesn't send out

a donor letter and it disallows the deduction. So make sure that you get that donor letter. Sometimes somebody did not consult with their expert or with their professional before donating assets. And for whatever reasons, they didn't follow the the rules. With regards to getting an appraisal or whatnot and could cause you to lose the the donation or there's a tax consequence to the donation, like when you have a mortgage number seven was, hey, you forgot to file your tax returns. They didn't fil

e tax returns on your charity. And as a result, it was dissolved administratively dissolved by the IRS, meaning I guess the state would still be going on, but the IRS terminates its tax exempt status, which can be pretty, pretty rude awakening there. Don't put in number six is don't put in that. You're going to compensate your officers and directors unless you absolutely have to, because that's a big red flag for the IRS. Number six or number five was you you improperly classified the type of ch

arity. And it's going to cause you delay that is unneeded. And the number four is you use the wrong terminology. And this was when I said it was buzzwords. You're using buzzwords that are going to cause the IRS to dig into you and to delay the whole process. Number three was, hey, you got to make sure that you're describing your activities as being charitable. This is not a business plan for a for profit or for angel investors. This is hey, this is why what we're doing is for the public good. So

the IRS approves you. Number two is articles of incorporation. Use a professional because there's magic language that you have to put into those articles. The state doesn't require it, but the IRS does. You will not get your exemption unless you have this magic language in there. So make sure you had the magic language in the articles of incorporation. And number one was the proper structure from the start. People don't realize that just because it's a federal exemption that they skip past what

you do with the state, or they do something really simple like, Hey, I set up an LLC with the state and as a result it caused you all sorts of problems and delays trying to get your exemption that there is a way to do this, the right way that the IRS is used to, and that is to use a corporation, a nonprofit corporation, don't use a for profit corporation, but that's number one. So that was ten. Did I miss any? No. We nailed. It. Yeah. So. So, Kareem, thank you for coming out and giving us the t

he top ten mistakes people make when forming or operating a nonprofit. Anything else you want to add? No. I mean, you know, of course, my plug is going to be use Anderson, use us because we've done this hundreds and hundreds of times. You know, it's it's probably new to you, but it's not new to us. So we are aware of what it is that can delay your application. We are aware of the issues that come up after you have the final one, C three, because we've done this so many times. So, you know, pleas

e use an expert to help you with this. And, you know, always welcome to reach out to us and we'd be happy to work with you to make sure that everything gets done from start to finish and it's done correctly. And then, of course, you get the exemption and that you are in compliance with the federal and state requirements as well. All right. I think that's fair. You don't know what you don't know. So use somebody who does. And in that way, you're going to do much smoother. Your job is to go out th

ere. And if you're in the nonprofit realm, is to go have a great effect on the public and take your idea and make it into reality. Let let the pencil pushers do the compliance stuff so that you don't have to get in the way of that, because a little mistake could could lead to disastrous consequences. So reach out to Kareem. I'll put your information in the show notes and down below so that they can link and in click and get with your team. And you have a full team, right? You guys do the complia

nce, the setup, the formation of the entities and make sure that it runs in harms. Right. Yeah, we have a dream team. They do a fantastic job. And we also have a weekly Q&A session, which I'm proud of as well. So you can hop on every single week on Tuesdays for one hour, ask all your questions. We answer about anywhere from 30 to 50 questions as well. So we're always accessible, always available. There's always opportunities to ask us any questions. You know, and again, I'm proud of the team tha

t we have. It is a fantastic team. They do a fantastic job. Well, that's that sounds fair enough. So Thank you for going over the top ten mistakes people make when forming or operating a nonprofit. If you know anybody that could benefit from this information forwarded on to them and and is always go out there and do good things and good luck and extreme. Thanks again for coming on. You brought it, you brought your A-game and you gave us a lot to think about. Thanks again. Thank you. It's great t

o be.