California has the largest population of veterans in the nation. Service members sometimes need help transitioning from military to civilian life. Some veterans return from military life with profound challenges from physical and psychological injuries. Nonprofit organizations play an important role in providing support to veterans who need it. Here are a few tips for anyone considering forming a nonprofit to serve California’s veteran community.
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Take stock of the competition.
The size of California’s veteran population means there are a lot of nonprofits already serving the community. Before taking serious steps to organize a nonprofit entity it’s a good idea to make a detailed plan and examine how your group will fit into the existing nonprofit landscape. Will the group fill an unmet need? How will it distinguish itself from other groups for fundraising purposes?
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Account for the community’s unique needs.
Nonprofits that will serve veterans may need special expertise to best accomplish their mission. For example, a group that will work with injured veterans may need to hire a professional who has experience with the technical side of health care, especially with respect to working with the Veterans Administration and its hospitals. A group that will support veterans contending with psychological difficulties will need the advice of an expert in that field.
A veteran-oriented nonprofit may also have unique governance and management considerations. An organization that will rely heavily on veteran volunteers and employees should give careful consideration to how that population’s unique characteristics may affect the organization’s insurance and staffing needs.
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Sales of goods are usually subject to sales tax.
For organizations that intend to sell merchandise as part of their fundraising efforts, it can come as a surprise that California collects sales tax on a nonprofit’s sale of most goods. A nonprofit that plans to sell goods must obtain a seller’s permit and pay sales tax. There are a couple exceptions to the sales tax rule worth noting:
- Organizations are allowed to sell American flags tax-free, provided the proceeds will solely benefit the organization. A nonprofit can also sell food without paying sales tax, so long as the food is served in connection with an event conducted by the group to raise money for the group’s activities.
- A thrift store that operates on military bases and is designated as a “military welfare society” by the Department of Defense can sell goods without collecting or paying sales tax.
The Church Law Center of California can help
The Church Law Center of California assists religious and secular nonprofits in all phases of their development and operation. If you are considering forming a nonprofit group to serve our veteran community, our attorneys would be honored to help. Call us at (949) 892-1221 or reach out to us through our contact page.
