| Publication 557 |
2008 Tax Year |
Publication 557 - Additional Material
Appendix. Sample Articles of Organization
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The following are examples of a charter (Draft A) and a declaration of trust (Draft B) that contain the required information
as to purposes and
powers of an organization and disposition of its assets upon dissolution. You should bear in mind that requirements for these
instruments may vary
under applicable state law.
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See Private Foundations and Public Charities, for the special provisions required in a private foundation's governing instrument in
order for it to qualify for exemption.
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Draft A
| Articles of Incorporation of the undersigned, a majority of whom are citizens of the United States, desiring to form a Non-Profit
Corporation under the Non-Profit Corporation Law of
, do hereby certify:
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| First: The name of the Corporation shall be
.
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| Second: The place in this state where the principal office of the Corporation is to be located is the City of
,
County.
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| Third: Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including, for
such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of
the Internal Revenue Code,
or the corresponding section of any future federal tax code.
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Fourth: The names and addresses of the persons who are the initial trustees of the corporation are as follows:
Name
, Address
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Fifth: No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to its members, trustees,
officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation
for services rendered
and to make payments and distributions in furtherance of the purposes set forth in Article Third hereof. No substantial part
of the activities of the
corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation
shall not participate in, or
intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition
to any candidate for public
office. Notwithstanding any other provision of these articles, the corporation shall not carry on any other activities not
permitted to be carried on
(a) by a corporation exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding
section of any future
federal tax code, or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue
Code, or the
corresponding section of any future federal tax code.
If reference to federal law in articles of incorporation imposes a limitation that is invalid in your state, you may wish
to substitute the
following for the last sentence of the preceding paragraph: “Notwithstanding any other provision of these articles, this corporation shall not,
except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the purposes
of this
corporation.”
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Sixth: Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of
section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed
to the federal
government, or to a state or local government, for a public purpose. Any such assets not so disposed of shall be disposed
of by a Court of Competent
Jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes
or to such organization or
organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.
In witness whereof, we have hereunto subscribed our names this
day of
, 20
.
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Appendix. Sample Articles of Organization, continued
Draft B
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The
Charitable Trust. Declaration of Trust made as of the
day of
, 20
, by
, of
, and
, of
, who hereby declare and agree that they have received this day from
, as Donor, the sum of Ten Dollars ($10) and that they will hold and manage the same, and any additions to it, in trust, as
follows:
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| First: This trust shall be called “The
Charitable Trust.”
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| Second: The trustees may receive and accept property, whether real, personal, or mixed, by way of gift, bequest, or devise, from
any
person, firm, trust, or corporation, to be held, administered, and disposed of in accordance with and pursuant to the provisions
of this Declaration
of Trust; but no gift, bequest or devise of any such property shall be received and accepted if it is conditioned or limited
in such manner as to
require the disposition of the income or its principal to any person or organization other than a “charitable organization” or for other than
“charitable purposes” within the meaning of such terms as defined in Article Third of this Declaration of Trust, or as shall in the opinion of
the trustees, jeopardize the federal income tax exemption of this trust pursuant to section 501(c)(3) of the Internal Revenue
Code, or the
corresponding section of any future federal tax code.
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| Third: |
A. The principal and income of all property received and accepted by the trustees to be administered under this Declaration
of Trust
shall be held in trust by them, and the trustees may make payments or distributions from income or principal, or both, to
or for the use of such
charitable organizations, within the meaning of that term as defined in paragraph C, in such amounts and for such charitable
purposes of the trust as
the trustees shall from time to time select and determine; and the trustees may make payments or distributions from income
or principal, or both,
directly for such charitable purposes, within the meaning of that term as defined in paragraph D, in such amounts as the trustees
shall from time to
time select and determine without making use of any other charitable organization. The trustees may also make payments or
distributions of all or any
part of the income or principal to states, territories, or possessions of the United States, any political subdivision of
any of the foregoing, or to
the United States or the District of Columbia but only for charitable purposes within the meaning of that term as defined
in paragraph D. Income or
principal derived from contributions by corporations shall be distributed by the trustees for use solely within the United
States or its possessions.
No part of the net earnings of this trust shall inure or be payable to or for the benefit of any private shareholder or individual,
and no substantial
part of the activities of this trust shall be the carrying on of propaganda, or otherwise attempting, to influence legislation.
No part of the
activities of this trust shall be the participation in, or intervention in (including the publishing or distributing of statements),
any political
campaign on behalf of or in opposition to any candidate for public office.
B. The trust shall continue forever unless the trustees terminate it and distribute all of the principal and income, which action
may be
taken by the trustees in their discretion at any time. On such termination, assets shall be distributed for one or more exempt
purposes within the
meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or
shall be distributed to the
federal government, or to a state or local government, for a public purpose. The donor authorizes and empowers the trustees
to form and organize a
nonprofit corporation limited to the uses and purposes provided for in this Declaration of Trust, such corporation to be organized
under the laws of
any state or under the laws of the United States as may be determined by the trustees; such corporation when organized to
have power to administer and
control the affairs and property and to carry out the uses, objects, and purposes of this trust. Upon the creation and organization
of such
corporation, the trustees are authorized and empowered to convey, transfer, and deliver to such corporation all the property
and assets to which this
trust may be or become entitled. The charter, bylaws, and other provisions for the organization and management of such corporation
and its affairs and
property shall be such as the trustees shall determine, consistent with the provisions of this paragraph.
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C. In this Declaration of Trust and in any amendments to it, references to “charitable organizations” or “charitable
organization” mean corporations, trusts, funds, foundations, or community chests created or organized in the United States or in any of
its
possessions, whether under the laws of the United States, any state or territory, the District of Columbia, or any possession
of the United States,
organized and operated exclusively for charitable purposes, no part of the net earnings of which inures or is payable to or
for the benefit of any
private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise
attempting to influence
legislation, and which do not participate in or intervene in (including the publishing or distributing of statements) any
political campaign on behalf
of or in opposition to any candidate for public office. It is intended that the organization described in this paragraph C
shall be entitled to
exemption from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any
future federal tax code.
D. In this Declaration of Trust and in any amendments to it, the term “charitable purposes” shall be limited to and shall include
only religious, charitable, scientific, literary, or educational purposes within the meaning of those terms as used in section
501(c)(3) of the
Internal Revenue Code, or the corresponding section of any future federal tax code, but only such purposes as also constitute
public charitable
purposes under the law of trusts of the State of
.
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| Fourth: This Declaration of Trust may be amended at any time or times by written instrument or instruments signed and sealed by the
trustees, and acknowledged by any of the trustees, provided that no amendment shall authorize the trustees to conduct the
affairs of this trust in any
manner or for any purpose contrary to the provisions of section 501(c)(3) of the Internal Revenue Code, or the corresponding
section of any future
federal tax code. An amendment of the provisions of this Article Fourth (or any amendment to it) shall be valid only if and
to the extent that such
amendment further restricts the trustees' amending power. All instruments amending this Declaration of Trust shall be noted
upon or kept attached to
the executed original of this Declaration of Trust held by the trustees.
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Fifth: Any trustee under this Declaration of Trust may, by written instrument, signed and acknowledged, resign his office. The
number of trustees shall be at all times not less than two, and whenever for any reason the number is reduced to one, there
shall be, and at any other
time there may be, appointed one or more additional trustees. Appointments shall be made by the trustee or trustees for the
time in office by written
instruments signed and acknowledged. Any succeeding or additional trustee shall, upon his or her acceptance of the office
by written instrument signed
and acknowledged, have the same powers, rights and duties, and the same title to the trust estate jointly with the surviving
or remaining trustee or
trustees as if originally appointed.
None of the trustees shall be required to furnish any bond or surety. None of them shall be responsible or liable for the
acts or omissions of any
other of the trustees or of any predecessor or of a custodian, agent, depositary or counsel selected with reasonable care.
The one or more trustees, whether original or successor, for the time being in office, shall have full authority to act even
though one or more
vacancies may exist. A trustee may, by appropriate written instrument, delegate all or any part of his or her powers to another
or others of the
trustees for such periods and subject to such conditions as such delegating trustee may determine.
The trustees serving under this Declaration of Trust are authorized to pay to themselves amounts for reasonable expenses incurred
and reasonable
compensation for services rendered in the administration of this trust, but in no event shall any trustee who has made a contribution
to this trust
ever receive any compensation thereafter.
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| Sixth: In extension and not in limitation of the common law and statutory powers of trustees and other powers granted in this
Declaration of Trust, the trustees shall have the following discretionary powers.
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a) To invest and reinvest the principal and income of the trust in such property, real, personal, or mixed, and in such manner
as they shall deem
proper, and from time to time to change investments as they shall deem advisable; to invest in or retain any stocks, shares,
bonds, notes,
obligations, or personal or real property (including without limitation any interests in or obligations of any corporation,
association, business
trust, investment trust, common trust fund, or investment company) although some or all of the property so acquired or retained
is of a kind or size
which but for this express authority would not be considered proper and although all of the trust funds are invested in the
securities of one company.
No principal or income, however, shall be loaned, directly or indirectly, to any trustee or to anyone else, corporate or otherwise,
who has at any
time made a contribution to this trust, nor to anyone except on the basis of an adequate interest charge and with adequate
security.
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b) To sell, lease, or exchange any personal, mixed, or real property, at public auction or by private contract, for such consideration
and on such
terms as to credit or otherwise, and to make such contracts and enter into such undertakings relating to the trust property,
as they consider
advisable, whether or not such leases or contracts may extend beyond the duration of the trust.
c) To borrow money for such periods, at such rates of interest, and upon such terms as the trustees consider advisable, and
as security for such
loans to mortgage or pledge any real or personal property with or without power of sale; to acquire or hold any real or personal
property, subject to
any mortgage or pledge on or of property acquired or held by this trust.
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d) To execute and deliver deeds, assignments, transfers, mortgages, pledges, leases, covenants, contracts, promissory notes,
releases, and other
instruments, sealed or unsealed, incident to any transaction in which they engage.
e) To vote, to give proxies, to participate in the reorganization, merger or consolidation of any concern, or in the sale,
lease, disposition, or
distribution of its assets; to join with other security holders in acting through a committee, depositary, voting trustees,
or otherwise, and in this
connection to delegate authority to such committee, depositary, or trustees and to deposit securities with them or transfer
securities to them; to pay
assessments levied on securities or to exercise subscription rights in respect of securities.
f) To employ a bank or trust company as custodian of any funds or securities and to delegate to it such powers as they deem
appropriate; to hold
trust property without indication of fiduciary capacity but only in the name of a registered nominee, provided the trust property
is at all times
identified as such on the books of the trust; to keep any or all of the trust property or funds in any place or places in
the United States of
America; to employ clerks, accountants, investment counsel, investment agents, and any special services, and to pay the reasonable
compensation and
expenses of all such services in addition to the compensation of the trustees.
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| Seventh: The trustees' powers are exercisable solely in the fiduciary capacity consistent with and in furtherance of the charitable
purposes of this trust as specified in Article Third and not otherwise.
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| Eighth: In this Declaration of Trust and in any amendment to it, references to “trustees” mean the one or more trustees,
whether original or successor, for the time being in office.
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| Ninth: Any person may rely on a copy, certified by a notary public, of the executed original of this Declaration of Trust held by
the trustees, and of any of the notations on it and writings attached to it, as fully as he might rely on the original documents
themselves. Any such
person may rely fully on any statements of fact certified by anyone who appears from such original documents or from such
certified copy to be a
trustee under this Declaration of Trust. No one dealing with the trustees need inquire concerning the validity of anything
the trustees purport to do.
No one dealing with the trustees need see to the application of anything paid or transferred to or upon the order of the trustees
of the
trust.
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| Tenth: This Declaration of Trust is to be governed in all respects by the laws of the State of
.
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