What $1,000 can Do
It only takes a grand to buy a fine fund, savor a case of cabernet,enjoy top-notch travel -- or form a foundation.
From Kiplinger's Personal Finance magazine, August 2005
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Inspire others. Start a charity
Nine years ago, Jesse Billauer was one of the world's top amateur surfers, about to turn pro at age 17. But one morning while he was surfing off a Southern California beach, a wave knocked him down on a sandbar and broke his neck, leaving him a quadriplegic.
Over the next few years, the local community and the surfing industry raised about $80,000 to help pay Jesse's medical bills. Touched by that generosity, Jesse and his brother, Josh, were inspired to raise money for others.
The brothers dreamed big, so they needed an organization that matched their aspirations. In 2002 they formed the Life Rolls On Foundation, a charity created under section 501(c)(3) of the Internal Revenue Code. Donations to such charities are tax-deductible, and that enables the Billauers' foundation to attract more donors and larger gifts.
The Life Rolls On Foundation engages professional athletes to talk to young people about accident prevention, and it raises money for spinal-cord-injury research. Last year, it raised $260,000.
You, too, can set up a 501(c)(3) charity with $1,000 or less. Start with a good guide to completing the IRS paperwork, such as How to Form a Nonprofit Corporation, 7th Edition (Nolo, $50), which leads you through the process. Or do what the Billauers did: Find a lawyer willing to donate legal services.
The IRS requires a filing fee, which varies depending on how much your charity receives or expects to receive over four years. The fee is $150 if you expect average gross receipts of less than $10,000, and rises to $500 if you expect to raise $10,000 or more. There's also a modest state filing fee. In California, the Billauers paid $30.
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Once you've set up your charity, making it successful takes the same entrepreneurial drive and time as starting a for-profit business. It's a lot of work, in addition to a day job (Josh Billauer is a money manager with Wachovia Securities, and Guandolo works for the U.S. Department of Justice). But it's also a labor of love.
-- Ronaleen R. Roha
