Questions to Think About BEFORE Starting a Not-for-Profit

doinggood-1I am all for not-for-profit organizations.  Many of my clients have brilliant ideas for how to improve the world and forming a not-for-profit is a great way to attack some of society’s ills.  Without being a Debbie-downer, I want to caution that forming a not-for-profit is hard work!  I suggest you consider some things before you commit yourself to full-fledged not-for-profit status.

Think about these questions BEFORE filing any official paperwork:

1) What state do you want to start in?  Even if you plan on going national or international at some point, you are going to have to incorporate in one place.  Choose a location where you will be focusing your services on or where you will focus your fundraising efforts or, ideally, both.

2) Who will be on your board of directors?  In New York, not-for-profits must have at least 3 members.  Being on a not-for-profit board comes with some legal responsibilities so you should understand what you are in for (as a potential board member) as well as what you are asking your friends or colleagues to sign on for.

3) How will you run your organization?  After filing the Articles of Incorporation in New York State your board should enact by-laws.  These rules set out how the board will make decisions.  Some things are routine, but other things, like whether you want a board that meets in person, may matter more to you.  The entire board should participate in drafting these.

4) How will you manage your finances? If you will be seeking 501c3 status, you need someone who is savvy in accounting to help you document the money you will have coming in and going out.  Set yourself up with someone early on so that they can keep you from making financial mistakes that may cost you down the line.

If you have solid answers to these questions, you are well on your way towards being ready to incorporate as a Not-for-Profit.  Managing a not-for-profit means more than just doing good for humanity, it also requires being smart about the legal and financial obligations you are committing to in the future.

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