 | | Good Neighbor Tool Kit: Leading a Charity Nonprofit Nuts and Bolts | | ||
|  Nonprofit Nuts and Bolts The Art of Fundraising Recruiting Volunteers and Keeping Them Happy Marketing and Public Relations Leadership and the Board Good Neighbor Tool Kit Main Page Good Neighbor Home Page | Launching Your Own Organization So, you’ve decided to start your own nonprofit organization to address an important unmet need in your community. The next question is what kind of an organization should that be? Here are the most common options: 1. Establish an unincorporated nonprofit organization. Nonprofits can operate as unincorporated associations or charitable trusts. One of the plus sides of such an operation is fewer governmental reporting requirements. However, unincorporated associations can’t raise funds from most corporations and foundations, and the officers of charitable trusts are less protected in personal liability than officers of corporations. Still, if your interest is very specific, localized, and can be addressed with an annual budget of less than $25,000, a very simple unincorporated association or club may be the way to test a charitable concept without committing undue time or dollars to an untried idea. 2. Partner with an established, incorporated organization. Without going through the rigors of incorporation and seeking tax exemption, you can collaborate with another, more established organization that is capable of receiving charitable gifts. The local branch of a major national organization or a local community foundation may be an appropriate ally. 3. Establish a private foundation. Essentially, all 501(c)(3) organizations are private foundations unless they qualify as charitable organizations. Private foundations allow their officers and donors very significant control over fund distribution. However, private foundations' tax advantages are usually more limited, and there is a mandatory annual distribution of at least five percent of the foundation’s assets. A private foundation is generally established to direct the distribution of a person’s or family’s assets rather than assets developed by broad-based public support (donations). An attorney can help you determine whether establishing a private foundation will be appropriate for accomplishing your charitable interests. 4. Incorporate. Ask yourself the following questions to decide whether to incorporate your organization:
TIP: A good lawyer can help you navigate through the thoroughfares and byways of nonprofit incorporation. You may want to enlist such a person to be on your inaugural board. Steps to Incorporate and Seek Tax Exempt Status > | |