funeral director seeks advice

[vikak99]

What is the name of your state? pa

i own a funeral home in philadelphia pa. we serve some of the poorest neighborhoods in the city. our costs are well below the national average cost of a funeral service however, many families do not have insurance and do not have pre planned financial arrangements; thus burdening themselves with the stress of a burial expenses. we are asked over and over again if there is an agency or organization or charity that helps families pay for final expenses. there are none. (there is a crime victims compensation board that pays upwards of 5k if the deceased was an innocent victim of a crime...that is it) some families have no choice but to settle for the most economical disposition such as cremation, even though it is against everything they believe.

i would like to set up some sort of agency that does help these families in need. how difficult is it to start a charity? what are the proper channels to research? shall i contact a bank? an attorney? both? is there a conflict of interest if i would only be helping my families that choose to select my funeral home as the service provider?

 

[clueless3]

how difficult is it to start a charity? what are the proper channels to research? shall i contact a bank? an attorney? both?

A "charity" is basically a corporation, a "nonprofit public benefit" corporation, organized primarily for charitable purposes under the Non-Profit Corporation Law, and which plans to obtain Federal tax exempt status under Section 501(c)(3) of the Internal Revenue Code. There are some specific rules restricting its activities regarding propaganda, legislation, use of profit and assets, etc.

It's not difficult to start. A lawyer can set it up for you; he can make sure that you follow the Corporation Code of your State and to set up the proper permissive provisions, if needed. Contact a CPA too; he can help you set up the tax-exempt, for both Federal and State. Yes, you need to set up a separate bank account (or two) for it.

is there a conflict of interest if i would only be helping my families that choose to select my funeral home as the service provider?

There are some rules against the use of the charity's profit and assets to benefit the charity's officers, members, or any private person. Know the rules and use your best judgement. Also, if you can defend your case in front of an IRS agent then you're home free.

Your lawyer should point out to you your State's specific non-profit corporation law. Your CPA should tell you how you can use the funds to conform to Federal and State tax-exempt laws.