Another Blog About Nonprofits
I’ll start off this blog by saying that nonprofits are amazing. Surely some have their challenges, but their primary goal is to advocate for and further social causes. Many times, they fulfill, supplement, or complement community service needs which the private business sector or government cannot fulfill. Further, nonprofit employees and contractors often wear multiple hats and work long hours in order to help the organization succeed.
According to The National Center for Charitable Statistics, there are more than 1.5 million non-profit organizations registered in the United States. Nonprofits differ from for profit businesses because after overhead and staff is paid, funds go to achieving the organization’s mission. Of course this is if there is in fact paid staff, and if there are funds left. This differs from a for profit organization because extra funds often go to shareholders, bonuses, or other expenditures.
Nonprofit organizations are held accountable to not just the general public but to the people they are serving, funders, volunteers, donors, and often state and federal governments. Many have heard of the 501c3 tax exemption and so assume that all nonprofits have this. Or, that all nonprofits start at a federal level.
Process wise forming a nonprofit is similar to forming another business entity because it takes place at the state level with the state’s Secretary of State. Articles of Incorporation and additional formation documents are filed with the state. Once a nonprofit is approved at the state level it can apply with the federal government (the IRS) to receive 501c3 tax exempt status. Meaning, some nonprofits are 501c3s and some are not, but they still may be a nonprofit as deemed by the state they applied in.
This is just a sample and an extremely condensed version of a larger discussion. Rational Unicorn will be putting on a free hour and half intro to nonprofit formation seminar on Tuesday April 10, 2018 at 6pm and Sunday, April 15, 2018 at 10am.
The seminar will delve into more details and highlight a variety of legal issues for nonprofit organization formers/thinking of forming folks to think long and hard about. For details and to rsvp go to the home page and click the purple seminar link.
Also look out for a day-long Nonprofit Startup Summit hosted by Rational Unicorn and Richard Seymour of Mahonia Nonprofit Consulting www.richardfseymour.com that will take place early June (details to be announced soon). The event will feature speakers on a range of topics from nonprofit formation to marketing to potential liability issues, to funding processes.
To book a free 30 minute consult please reach out: www.rationalunicornlegalservices.com/connect