Item 10 - Creation of 501(c)(3) Nonprofit City of Santa Ana Foundation

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City Manager Office www.santa-ana.org/city-managers-officw Item # 10 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report November 1, 2022 TOPIC: Creation of 501(c)(3) Nonprofit City of Santa Ana Foundation AGENDA TITLE: Informational Report Relating to the Creation of 501(c)(3) Nonprofit City of Santa Ana Foundation RECOMMENDED ACTION Accept informational report. DISCUSSION State tax law allows for the formation of a 501(c)(3) nonprofit organization, more commonly referred to as charitable organizations. The City of Santa Ana, as it is formed today, is not a charitable organization and does not have a mechanism to which it can engage in charitable activities providing a tax incentive for donating. This can be changed by the formation of an auxiliary organization, such as a community foundation, that is authorized to provide supplemental services and support to the City. Community foundations are nonprofit organizations that utilize philanthropic contributions. A community foundation can be established to accept and manage the use of donated funds for the benefit of the entire City and cannot be used for general City operations. A community foundation is a useful means to accept tax-exempt donations and could be organized exclusively for charitable purposes. A community foundation could also engage in soliciting, receiving, investing, and making grants of funds, property, and other resources, or providing direct charitable services to aid, sponsor, promote, advance and assist worthy activities, programs and services. If formed, the Santa Ana Community Foundation would be led by a Board, whose initial functions and responsibilities would be as follows: •Adopt governing bylaws •Apply for non-profit status •Assist worthy activities, programs and services •Develop a budget and set up accounts •Develop marketing publication to attract financial support •Establish goals