Learn About Ministry Charity Projects (MCPs)
Have you ever wanted to start a charity or ministry? Our Ministry Charity Project (MCP) "incubator” allows you to receive tax-free donations without the expense and hassle of forming your own 501 (c) (3). Capstone MCPs handle your legal and accounting paperwork so you can focus on the work you feel called to do.
To get started, watch this 90-second summary video and read more below:
Start a Ministry From Scratch
Capstone's Ministry Charity Project (MCP) “ministry incubator” allows you to use our 501 (c) (3) status in all 50 states. Receive donations by smartphone while building comradery and mutual support with our other MCP leaders nationwide. For a 9% management fee (the lowest in the field), Capstone handles the following complexities and compliances so you can enjoy the work you're actually called to do:
- Filing articles of incorporation
- Forming a board of directors and appointing officers
- Drafting bylaws, rules, and policy
- Applying for IRS tax-exemption (which can take 5 years)
- Filing for an EIN number
- Completing eligibility tax worksheets
- Submitting the 11-part form 1023
- Submitting articles of incorporation
- Submitting required bylaws
- Applying for state tax exemption
- Filing W2 forms and other tax forms for employees
- Opening bank accounts
You'll be included in Capstone’s annual audit report as we handle the annual 990 form required by the IRS for all 501(c)(3) non-profits, and receive general business insurance coverage—including property damage, general liability, and worker’s compensation. Feel free to remain with us indefinitely or venture off at any time to form your own 501 (c) (3).
Complete the form on this website to launch your project and start fundraising. For more inspiration see our testimonies below.
MCP Frequently Asked Questions
- WHAT IS A MINISTRY CHARITY PROJECT? A Ministry Charity Project, also known as a Fiscal Sponsorship allows an organization that has not yet been recognized as tax-exempt by the IRS under the Code section 501(c)(3) to attract donors who wish to make tax-deductible contributions to the organization. Capstone, acts as the Sponsor of the organization and provides the administrative services so the sponsored organization can focus on their mission and vision. At Capstone, we refer to the sponsored organization as a Ministry Charity Project, or MCP. Capstone does not provide funding for your MCP as its Sponsor.
- WHEN CAN THE MCP BEGIN RECEIVING CONTRIBUTIONS? Contributions can be received after you have received an email from us that your fund at Capstone is active.
- WHAT TYPE OF SUPPORT SERVICES CAN MCPs EXPECT FROM CAPSTONE? Capstone serves its MCPs by providing the back-office functions of:
- holding and accounting for the donated assets
- paying administrative and staffing costs of the MCP from the donated assets
- obtaining audited financials and an annual audit which includes all MCP financial activity
- paying expenses, fees and costs of the MCP directly
- 1099 preparation for vendors and Independent Contractors
- preparing financial reports and budget reports for the MCP’s management
- preparing and filing an annual Form 990 tax report for Capstone which includes all MCP financial activity.
- WHERE ARE THE MCP’S CONRIBUTION MAINTAINED? All assets of MCP’s are held in financial institutions under the discretion of Capstone’s Board of Directors.
- WHAT MUST WE KNOW TO HIRE PAID STAFF UNDER A 501(C)(3)?
Paid Staff can be employees (full or part-time) or Independent Contractors (IC). ICs are generally people who are retained for a defined period or scope of work, generally unsupervised, and have their own business. Employees have none of these characteristics. Capstone can help you determine which method, Employee or IC, is best for your circumstances and provide the necessary paperwork to do so. Once it is decided, Capstone must review and approve all paperwork.
- CAN I VIEW MY MCP’S ACTIITY ONLINE? MCPs have direct password protected and real-time access to their finances. You will be given login credentials once your MCP is active.
- WHY IS IT IMPORTANT THAT CAPSTONE IS REGISTERED TO RAISE FUNDS IN ALL 50 STATES? This allows the MCP to immediately raise funds in all 50 United States without having to register with each State which can be labor intensive and involve a cost factor. (Note: a few states have additional requirements for certain situations.)
MCP Operating Procedures
- Your fund bears your Ministry Charity Project (MCP) name and has a unique ID number assigned to it by Capstone. Feel free to use either your Fund Name or ID number for communications with Capstone and externally for your donors.
- Once your fund is approved, you will receive an email from our Web Portal providing you with a secure login set up. You may view the current balance, deposits, expenses and all transactions in real-time.
- When your initial deposit has been applied to your account, a $1,000 set-up fee is deducted and the remaining amount, along with future deposits, is charged the maintenance fee of 9%. The resulting amount is available for your immediate use.
- Checks & Money Orders (“checks”)
- All checks are to be made payable to Capstone Legacy Foundation.
- Any other payee name may be rejected by the bank and if so, may incur a fee. Any bank fees charged will be deducted from the MCP fund and will delay your access to the donation until the bank has accepted the deposit.
- Your fund designation (name or ID number) should be written in the memo section or attached as a separate notice.
- All checks are to be mailed to Capstone Legacy Foundation.
- Once checks are received, processed and deposited into your MCP account, they are generally available for your immediate use. If you receive any checks, please forward them to Capstone for processing.
- As cash is difficult to manage in this arrangement, we suggest converting any cash amounts received to a money order and then mailing to Capstone with the Fund designations. Cash may be mailed directly to Capstone to process; however, the sender bears the risk of loss in transit.
- Online Donations
- Capstone will design an online donation page for your MCP fund as part of our website. If you have another website you wish to use, the donate coding can be imbedded on your own site.
- Donations of Non-liquid assets: real estate, stock, art and collectibles, and giving through other charitable vehicles, such as Charitable Gift Annuities and Charitable Remainder or Charitable Lead Trusts is available using Capstone services.
- We are happy to meet with you to discuss how we can assist you in educating your donors about these giving options.
- For all contributions, Capstone will provide the necessary tax-deductible receipt to the donor. All donations totaling more than $250 will receive an end-of-year statement.
- Electronic donations are available for use 5 business days from the day the donation is made. Check donations are available for use 3 business days from the day the check is received. If urgent, Capstone will also consider special requests on a case by case basis.
- Capstone does not write grants for our MCP’s but submits grants to foundations on behalf of the MCP. To apply for a grant, all information required by the foundation to which the MCP is applying is to be completed and sent to Capstone for final application.
- Capstone can supply payroll services for regularly paid staff and will provide you with the necessary forms when needed. For example: W-4 for withholding, I-9 for employment eligibility, and other state forms if required. Direct deposit of net pay is available. Please see FAQ #5 for more information.
- Capstone will handle payment of vendor invoices for your MCP. Please submit invoices with your approval to Capstone by mail or email.
- Out-of-pocket expense reimbursements are submitted with receipts via the Capstone expense sheet. Please scan all receipts into a single PDF and if possible, align them in the same order of the Excel expense sheet. Please send both as attachments via email.
- Expense reports or invoices received by the 8th of the month (or next business day if it falls on a weekend), will be processed by the 15th of the month.
- Expense reports or invoices received by the 23rd of the month (or next business day if it falls on a weekend), will be processed by the 30th of the month.
- Special arrangements can be made to accommodate recurring expenses so that your involvement is minimized. Please see section 6.c. below regarding IRS Form W-9.
- All disbursements will be paid only to the extent funds are available in your MCP account.
- Capstone issues statements at the end of each calendar quarter via email. Through your MCP web portal, you can view current and past activity, along with previous statements.
- Fiscal Sponsorship
- Your MCP has established itself under Capstone using Capstone’s ministry charity program (MCP) structure. Under the written MCP Agreements between Capstone and its MCPs, the MCPs have agreed to comply with the charitable purposes and policies of Capstone for purposes of its exemptions as a Section 501(c)(3) qualified non-profit and complying with the charitable purposes of Capstone as stated in their charter documents. Under this arrangement, Capstone, its MCPs, and their personnel agree to comply with applicable law and regulations.
- Capstone’s Tax Determination Letter
- Capstone’s tax determination letter is the official document from the Internal Revenue Service (IRS) indicating Capstone is approved as a 501(c)(3) tax-exempt organization – exempt from federal income taxes. As part of Capstone, you will likely be asked by institutional funding sources for proof of federal tax-exempt status and thus need to provide this document. Please note, the original name on the letter, “Greater Philadelphia Christian Community Foundation,” was changed to Capstone Legacy Foundation, Inc.
- IRS Form W9
- IRS form W9 is to be completed by any vendor that is paid by the MCP. Please use the most current edition, available at http://www.irs.gov/pub/irs-pdf/fw9.pdf.
- Capstone will annually submit Form 1099 for each vendor to the IRS and to the applicable vendor as required by law.
- Sales Tax
- As a non-profit in PA, Capstone is exempt from paying state or local sales or use tax. We can provide the necessary exemption form for you should the need arise. This exemption is for MCPs located the State of PA only. MCPs located in another US State will require different procedures. Please contact us to discuss.
- Prohibiting Private Inurement
- The IRS requires all the assets obtained (cash or otherwise) by the MCP may only be used for the organization’s non-profit and charitable purposes, and not for the private gain or enrichment of those inside the organization. “Insiders” includes those who run the non-profit, founded it, work for it, contribute to it, or are related to it in any way. The legal term for this is “private inurement".
- Purchases over $1,000 in total require preapproval by Capstone management. Please submit a requisition form complete with as much information about the possible purchase including details of cost, and an explanation of its intended use.
- We do not want to take away from your independence in that funds that have been donated to your MCP are restricted to use by you. Your MCP is a project of Capstone and the donations are legally Capstone’s funds restricted for use by you and by your donors. However, Capstone must manage disbursements for legal liability purposes; in particular, the need to comply with IRS regulations applicable to our 501(c)(3) designation. Capstone will not unreasonably withhold approval for any purchase that is priced competitively, and which purpose is adequately described.
- Prohibiting Private Benefit
- All the assets obtained (cash or otherwise) by the MCP may only be used for the organization’s non-profit and charitable purposes, and not for the private gain or enrichment of those outside the organization.
- An example of violating this prohibition is to allow an outside business the use of your non-profit sales tax exemption for their company's offices, inventory or supplies.
- No Political Activity
- Capstone and its MCP partners are expressly prohibited from intervening in a campaign for public office and may not endorse or oppose any candidate.
- Under limited and tightly controlled circumstances lobbying for legislative purposes is permissible. Please contact us beforehand if you wish to explore this direction.
- Maintaining Proper Recordkeeping
- The IRS requires Capstone, and therefore each MCP, to keep accurate records in areas such as expenses, employees, contracts and authorizations. This is very important to establish compliance with the 501(c)(3) rules and regulations.
- Capstone Will File Required Report
- The IRS requires all tax-exempt organizations, including Section 501(c)(3)s, to file their annual Form 990. Preparation and filing of the annual Form 990 for the MCP is the responsibility of Capstone. Capstone will also file the mandatory annual reports required by several States regarding fund raising activities. Capstone includes your MCPs financial activity in its annual audit report and Form 990.
- Fundraising and Advertising
- MCP’s are to avoid any misleading statements and to comply with regulatory and ethical requirements.
- Fundraising presentations should be clear, concise and comprehensive. Full disclosure of the persons who solicit contributions, the purposes for which contributions are solicited, and how they will be used is required.
- MCPs must comply with state law requirements applicable to non-employees who are "professional solicitors" or "fundraising counsel".
- Disclosure of the MCP’s affiliation with Capstone for 501(c)(3) Tax Deduction Purposes is required. Any website or marketing material promoting the MCP must make evident a visible and clear articulation that the MCP is an affiliate of Capstone.
- Maintaining Exemption as a “Religious Organization”
- Capstone endeavors to maintain the status as a “religious organization” as recognized under federal and state law. This involves the MCP’s as well, which means that each may act as a religious organization and operate and discriminate in certain ways based on the religion espoused.
- Hiring employees that meet the religious qualifications for the given religion so that the organization can fully carry out its specific purposes and goals and accepting federal or state government grants are two ways that Capstone, or any of its MCPs must be aware. Legal agreements, contracts, leases, and, particularly, applications for government grants must be reviewed and approved by Capstone for the applicable MCP.
- You can see more detailed information at the IRS’s site: https://www.irs.gov/pub/irs-tege/How%20to%20Lose%20Your%20Tax%20Exempt%20Status.pdf
- Governance is not only for your convenience but also for your legal protection; Capstone is the legal head for all our partners.
- Handling compliances and complexities in the legal, procedural, accounting and reporting tasks is pledged to donors and required by governmental agencies.
- As your contractual partner and the entity that will answer for both your actions and ours, we require you refer to us any documents which need a legal signature. This is to protect both you and us.
- Please rely on Capstone’s expertise in these matters and work with us so our relationship will function to capacity.