Posted on 06/17/2011 9:50:58 PM PDT by null and void
Darling Daughter is interested in founding a non-profit and has asked her ever resourceful, infinitely wise and all knowing father for guidance.
Help.
Does anyone know of a good source for information, perhaps a textbook, guide or recipe for success? What are the practical considerations, workable models, things to avoid, tax and regulatory requirements, etc.
Assume we're starting from a point of near total ignorance...
It is probably more complicated than you might think. She should start with a business plan that covers everything. There are many examples on the internet. Next she will need to form a board of directors to oversee and audit the non-profit so it keeps to its mission. Then she will have to get a tax attorney to help file the paperwork with the IRS. You then must wait to see if the IRS approves the company as a non-profit.
Yeah, non-profits make money by growing. This allows more indirect costs for overhead even though you are technically not turning a profit.
I am certain it is!
And that is only the beginning. I hope she is good at jumping through hoops.
If you want to be a successful non-profit you need government grants, especially in the arts. Have her advocate Marxism, or denigrate treasured American traditions. Her organization will thrive.
I have a little sign somewhere around here that says:
This is a non-profit organization.
It wasn’t meant to be, but....
That is why many non-profits fail. It is good to learn a lot before getting off on the wrong foot.
I have both non-profit and for-profit companies. The for profit was incorporated in a couple of hours and the non-profit took 6 months.
You will need to file with the Secretary of State’s office in your state to establish the non-profit. This will give you the authority to raise money. You will need a small start-up board. As you grow you will want IRS 501(c)3 status so people can write off their donations.
The first thing I would do is find out if there is a center for non-profit management in your community. These types of organizations are common in large metropolitan areas. Failing that you may want to talk to someone at the local United Way.
Finally you are going to need to talk to an attorney who specializes in non-profit work who can help you with advice and the paper work involved.
Also, make sure your daughter is committed to this. Non-profits are easy to start and very hard to dismantle.
Hope this helps.
I know it’s fairly easy to set up a charitble 501(c)(3). There’s a good section on it at IRS.gov. You might need a lawyer to set it up for you.
I think the most successful non-profits work with other non-profits and avoid dealing with govt money altogether. Essentially a foundation raises money from donations and endowments and then distributes it to non-profits to use for specific needs. That is kind of simplistic, but it’s the general model that many non-profits follow.
Interesting...
nolo.com is a good resource for self-help on many legal actions.
They have a section for nonprofits:
http://www.nolo.com/legal-encyclopedia/nonprofits/
Yes, you are correct. Most metro areas have a primary foundation to serve the smaller area non-profits. Be aware that this foundation money for communities comes from people like George Soros, for example. Of course there are many other foundations, such as health insurance company foundations, medical foundations, historical foundations, etc. Just be careful and don’t sell out to the beast. There are good conservative non-profits, too. Just need to find them. There are many resources on the internet to get non-profits connected.
1. Hire a CPA and talk it through
2. Talk it through with a CPA
3. Your CPA will probably decline to give you help, because he doesn’t want to subjecct his practice to subjective law suits by government.
4. Hire a new CPA and talk it through.
5. Your new CPA will probably decline to give you help.
6. Hire another new CPA.
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You will find that very few qualified professionals will be willing to add their signature to filings by a not-for-profit venture, unless a wad of denero is flashed in their face.
In Zer0land, it just doesn’t make sense for a professional to sign on to a long term documentary business plan, only to see it nullified as the socialist agenda decides that your non-profit is against the tide.
Sorry, but this is the truth!
I set one up about two years ago, and the out-of-pocket legal expense was about $3500. Our attorney told us that if we'd just wanted to set up a for-profit business she could have had us out of her office in two hours and for a couple hundred bucks. But a non-profit start-up can be a substantial effort.
Establishing a Board of Directors, getting all the legal paperwork completed, reviewed, and signed (extensive), business licenses (area-dependant), inspections(possible) and other set-up costs can be painful.
Will you have physical assets/property? If so, part of the paperwork you'll need at set up is to designate what non-profit(s) you donate all that value to should your non-profit fold.
Will you have actual paid employees/staff? Will you be doing billing? Do you need a facility? Parking? Phone, Internet, cable, web site?
If you don't mind me asking, what kind of non-profit are you talking about?
This is one of the major sites for Foundations and non-profits:
http://foundationcenter.org/
I hope you have a strong stomach. Much liberalism here. But still useful.
LOL!
I looked it up. There are over 1.5 million non-profit businesses in the US. So there are a lot of CPAs who do accept this work. Money is money.
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