Do we need to prepare a budget for our operations?
Absolutely. This is required by the IRS and will be reviewed in advance by the IRS. Each organization must submit a budget when applying for 501(c)(3) exemption. This budget must include a statement of the organization's expected revenue and expenses and a balance sheet that details the organization's first three years of operation. If you are a new organization, simply detail a good faith estimate of your anticipated income and expenses. Be practical and reasonable when making these estimations.