How do I start a nonprofit organization?

Non-profits are certainly an attractive venture for people. You’ve been given a mountain of solid advice for how to start a non-profit, but it’s important that you understand that the bones of the operation must be highly organized and legally sound. Without a proper foundation your non-profit will fail before it has a chance to succeed.

For a different perspective, I’d like to encourage you to think of the legality surrounding non-profits. Here, I’d like to point out some of the most common mistakes that non-profits make in the early stages of formation. The hope is that you can use this information to help yourself avoid such common issues.

Common issues:

  • Tax-exempt status revoked due to failure to file proper tax documents for 3 consecutive years.
  • Fined for failure to report unrelated business income
  • Fined for improperly classifying employees
  • Incomplete business plans
  • Failure to establish rules associated with human resources or funding strategy
  • Choosing the wrong vehicle for ideas (perhaps a non-profit isn’t the appropriate platform for your goals)
  • Not following state guidelines for taxes or fundraising requirements
  • Failure to operate consistently with bylaws and/or articles of incorporation
  • Improperly developing the non-profit board
  • Failure to develop policies associated with key areas such as gift acceptance, executive compensation, expense reimbursement, etc.
  • Failure to understand basic laws associated with non-profit development and operation

As you can see, many of the potential problems originate from poor planning. At your earliest stages of development, you need to consider the bigger picture. This can be quite difficult to do on your own, especially if you have never created a non-profit before. To start your non-profit off on the right foot, you should consult an attorney.

LawTrades can help you find the right attorney for your needs. We specialize in connecting clients with the lawyer that is skilled in very specific areas of the law. We have access to several lawyers that have a background specifically in non-profits. Our services are affordable and we strive for client satisfaction each and every time. Contact us for a free consultation.

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