Operating Procedures

GETTING STARTED

  • 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.

CONTRIBUTIONS

  • 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.
  • Cash
    • 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.
  • Non-Cash
    • 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.

GRANTS

  • 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.

DISPURSEMENTS

  • 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.

STATEMENTS

  • 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.

COMPLIANCE ISSUES

  • 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

IN SUMMARY

  • 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.
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