Starting today I am offering four NEW services that make it easier for small organizations to get the legal peace of mind they need.
I am introducing four all-inclusive bundles: The Non-Profit Start-up Bundle; the Non-Profit Annual Check-up; the Business Start-up Bundle and the Business Annual Check-up. I am excited to share the details with you!
After a free consultation, each bundle is custom-designed for the individual organization. Hiring a lawyer to handle each of these services on an ad-hoc basis can often bring legal bills to of upwards of $15,000. By bundling these services together I build a strong knowledge of your individual organization and form a great relationship with the staff. Think of me as an in-house counsel you don’t pay a salary!
An added benefit is that the fee is fixed upfront, so you know exactly what to expect. Because I am tackling many of your issues at once I am able to offer the bundle at a reduced rate. Some of the bundles start as low as $4,500 and payment plans are available. Highlighted services in some bundles include:
- Drafting and Filing or Review of Initial Documents
- Four, hour-long consultations over the span of 4 months
- Drafting or Review of contracts
- 501c3 Drafting Assistance and filing with the IRS (for not-for-profit clients)
- Board Consultation, Development and Training (for not-for-profit clients)
for more detailed information about the packages.
I love anyone who is motivated and altruistic enough to start a not-for-profit. Starting any business is hard work, but deciding to create a “business’ that you will never be able to sell or reap profits from takes a special kind of dedication. Starting and running a not-for-profit can take up tons of time and energy totaling more than 40 hours a week. It is no surprise that many people who start NFPs eventually want to earn a salary. The creator often has plans to become the Executive Director. Here are some guidelines you should keep in mind if you want the not-for-profit you created to eventually hire you.
First: Your Board of Directors should be made up of volunteers. This means if you want to be on the Board of Directors (the group responsible for making decisions about who the executive director should be and making strategic decisions about the organization) you should not plan on taking a salary.
Second: If you are on staff you WILL have to give up some control to the Board. The group of people that make up the Board of Directors is running the organization. Technically, they are the boss of the organization’s Executive Director. They should be setting the ED’s salary and providing overall direction for the organization.
Third: You shouldn’t ever receive a crazy high salary. U.S. law sets out that tax exempt organizations should pay “reasonable compensation’ to its employees and executives. The market determines what is reasonable, so before setting a salary for yourself you should look into what other organizations in your field pay their executives. Yes, this is an imprecise guideline, but it is something to keep in mind.
Final thoughts: Because of the public nature of a not-for-profit, the creator has to give up some control. Don’t be surprised when the time comes to pick your initial Board to hear requests that the Executive Director not be listed as a Board member. Starting from a place where roles are clearly delineated makes the transitions that much easier as your organization grows.
I love summertime because I travel more. Traveling more means more time on airplanes and in train stations. As much as I enjoy the destinations I visit, I sometimes enjoy the journey even more because it gives me dedicated time to read. My favorite way to relax while still feeling productive is by reading business books. This allows me to keep up with what other entrepreneurs are thinking and doing. Here are some of the books I have been diving into over the past few months.
–Start Something That Matters by Blake Mycoskie. I read this book in one sitting, on a train from Washington D.C. to NYC. I was so inspired by Blake’s enthusiasm I immediately told all of my friends to buy a copy and to start wearing TOMS shoes. Blake discusses how to do good for the world and make money and I was really inspired by his approach. I think it would be hard to read this book and not be motivated by Blake’s generosity and spirit.
–Do Cool Sh*t by Miki Agrawal. I stumbled on this book when it popped up on my recommended reads from the New York Public Library. It is a super quick read but it packs a big punch. What I love about it is that it gives you Miki’s story woven in with tasks and challenges for the reader. If you don’t already have your own business you will want to start one after reading this book, AND, thanks to Miki, you will also have the basic know-how to do it!
–Outliers: The Story of Success by Malcolm Gladwell. What struck me most about this book was how success has to do with some hard work and some factors out of one’s control. The book tells fascinating tales about how “overnight successes” really have a lot more going for them than we can see on the surface. Timing is everything – the time you start a project, the time you put in to it. Sometimes the stars are aligned for something unusual to happen. It struck me that you have to keep working hard, but you also have to be open to what the universe is putting out there for you.
–Never Eat Alone by Keith Ferrazzi. I read this book after Malcolm Gladwell inspired me to become a connector in his book The Tipping Point (another great read). I finished Never Eat Alone without a “To Do” list of at least twenty things. Mr. Ferrazzi is clearly good at connecting and he gives some definite and concrete steps that even the shyest people can try. I find myself re-visiting this book when I want to try a new way of connecting with colleagues and clients.
–Americanah by Chimamanda Ngozi Adichie. You can’t read only business books, it’s summer after all! This was one of the top five books I read last year and I can’t recommend it highly enough. This author is incredible – you can see for yourself in her TED talks on the danger of a single story and why we should all be feminists. In this book she tells the story of a Nigerian native who comes to the United States and eventually decides to return to Nigeria. The voice was stunning and the characters crawled into my head and refused to leave.
Have you read any of these books? Did you enjoy them? What book should I pick up the next time I am on the road? Leave me a comment and let me know!
I 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.
Many people who run not-for-profits think that not-for-profits are prohibited from lobbying. This is not an accurate statement. Not-for-profits are prohibited from engaging in political campaign activity and political activity will be taxed, but lobbying, within the limits provided by the IRS, is appropriate and can be necessary to carry out the nonprofit’s mission.
It is important to distinguish between “political campaign activity,” “political activity” and “lobbying.” Political campaign activity deals with an individual who is a candidate for public office. Not-for-profits are prohibited in participating in this activity.
Political activity, however, refers to influencing or attempting to influence the selection, nomination, election or appointment of any individual to any federal, state or local public office other than in the context of legislative confirmation. If a not-for-profit chooses to undertake this type of action, the not-for-profit may be subject to a special tax.
Finally, lobbying refers to when a bill or draft bill is proposed in any legislative body (i.e. city council or state legislature) or any action with respect to direct actions of these bodies such as proposed constitutional amendments or referenda. Not-for-profits CAN engage in lobbying as long as no “substantial part” of its activities consists of attempts to influence legislation. If your organization’s mission is to help kids get a better education and you work with schools and teacher’s to provide after school activities to further this mission and you see a bill being introduced to lengthen the school day and want to support it, by all means, your organization should support it. Not-for-profits should feel free to support causes that further its mission and long term goals through lobbying as long as that is not the main part of the organization’s role.