Understanding the Not-for-Profit, Tax-Exempt Status of DBSA Chapters

The three following tasks are necessary for a DBSA chapter to receive their full benefits as a not-for-profit, tax-exempt organization affiliated with the Depression and Bipolar Support Alliance.

1. AFFILIATE WITH DBSA

• Annually file an affiliation agreement and fee with DBSA’s national office

• Provide proof of incorporation as soon as possible – at least within one year of initial start-up (see below)

2. BECOME AN INCORPORATED NOT-FOR-PROFIT ORGANIZATION

 File “Articles of Incorporation” in either of two ways:

• Through YOUR STATE, or

•  Through DBSA’s Group Incorporation process (This is filed through the State of Illinois, but all chapters can do this, no matter their location)

Why Incorporate? INCORPORATING your chapter with a state government makes your chapter a legal business entity. Incorporation indemnifies (protects from liability) individual chapter representatives such as directors or officers who are acting in the best interest of the corporation.  The chapter itself holds the liability risk.  Indemnification does not protect chapters from the consequences of a willful breach of a leader’s legal and fiduciary duties

3. FILE FOR TAX-EXEMPT STATUS

File with the Internal Revenue Service for exemption in either of two ways:

• Participate in DBSA’s Group Exemption process (we file for you), or

• File all paperwork, fees and requirements with the Internal Revenue Service of the United States of America.

You may also choose to file paperwork with YOUR state if you qualify for exemption from state taxes (like sales tax, etc.)

Why File for Tax-Exempt Status? FILING FOR TAX-EXEMPT STATUS with the Internal Revenue Service makes your chapter eligible to receive tax-deductible contributions from individuals, and eligible to apply for and receive local, state, and national grants that are available to tax-exempt organizations.  The chapter will be exempt from taxes under section 501(c)(3) of the Internal Revenue Code.

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Incorporation and Tax Exemption