It’s the start of a new year. Many of us have made New Year’s resolutions, and some of those might involve contributing to philanthropic causes. One way to do this is to start a charitable organization. Doing so is a complex matter, however, and it’s important to make sure the organization will stay afloat while also complying with federal and state regulations. Following are a number of pointers for getting started.
Find your niche: When determining the mission of your charitable organization, it’s important to choose something you’re passionate about—and that others care about as well. It needs to be a cause that will draw people to support it. At the same time, you also need to occupy a unique spot in the market. If someone else is already doing what you’re doing, your nonprofit will be far less likely to succeed.
Plan, plan, plan: Nonprofits operate as businesses, so you’ll need a solid business plan in order to function. Specifically, you’ll want to make sure your organization can operate in a well-defined manner. This will not only help keep operating costs down, but it will also assist in attracting donors and volunteers to support your cause. Also, there are a number of ways to structure these organizations, so it’s important to choose one that will work best for your purposes.
Be clear: When writing out your vision, mission, articles of incorporation, bylaws, and so forth, you need to be sure everything is as clear as possible. People should be able to easily understand what you are doing and what you stand for, and your volunteers and board members must be well aware of how the organization operates.
Make sure you’re tax exempt: There are a number of forms and procedures you need to complete in order to be tax exempt. This includes the structure of your organization as well as the filling out of certain tax forms, namely the IRS Form 1023. Tax exempt status is vital to keeping your operation costs down.
Comply with regulations: In addition to the forms and regulations over tax-exempt status, there are many regulations over the governance and operation of any business structure, including charitable organizations. In addition to operational regulations, the assets and capital contributed to the organization must be allocated and used properly. Failure to comply with these regulations can quickly lead to legal problems, which will certainly mean bad times for your organization (if not its total collapse).
Throughout every stage of the process of planning and establishing a charitable organization, you will need some outside assistance. Going it alone is simply not possible if you hope to stay afloat or meet federal tax-exempt requirements. Legal aid and consulting is vital to your success, so a competent lawyer is key.
If you’re planning to found a charitable organization as part of an estate plan, to protect certain assets, or simply to fulfill a New Year’s resolution, contact the skilled lawyers at Hart & David for the legal aid you need.