Starting a nonprofit organization requires much more than identifying a worthwhile cause. Organizations need to identify potential sources of money, craft a mission statement, draft bylaws, find board members, and seek tax-exempt status from the Internal Revenue Service.
What are the best ways to accomplish those tasks? What is the best way to ensure your fledgling group will be able to sustain itself over the long run? What are the potential pitfalls of starting a nonprofit group, and how can you avoid them?
The Guests
Marty Martin is a lawyer whose law practice focuses on advising and training nonprofit groups. Mr. Martin has chaired the boards of several nonprofit organizations.
Josh Sommer is executive director of the Chordoma Foundation, which he co-founded with his mother, Simone Sommer, after he was diagnosed with bone cancer in 2006. A freshman at Duke University when he was diagnosed, Mr. Sommer joined the lab of Michael Kelley, a Duke oncologist studying the disease. Mr. Sommer is also a fellow in strategic philanthropy and health at Duke's program on global health and technology access.
A transcript of the chat follows.
Peter Panepento (Moderator):
Welcome to the Chronicle of Philanthropy's weekly live discussion series. Typically, we focus these discussions on issues that are relevant to existing nonprofit organizations. But today, we're tackling a different topic -- starting a new nonprofit group.
Peter Panepento (Moderator):
Both of today's guest experts have quite a bit of experience in this area. Marty Martin is a lawyer whose law practice focuses on advising and training nonprofit groups. As part of his practice, Mr. Martin helps clients through the legal process of starting nonprofit organizations. Our other guest is Josh Sommer, who started his own organization three years ago. Mr. Sonner is executive director of the Chordoma Foundation, in Greensboro, N.C., which he co-founded with his mother, Simone Sommer, in 2006. He can provide first-hand lessons based on his experience starting the foundation.
Peter Panepento (Moderator):
They will be available for the next hour to take your questions. To submit a question, please click on the "ask a question" link on this page and type in your query. This is a text-based discussion and our guests will type responses to your questions. This page will refresh every minute with the latest answers.
Peter Panepento (Moderator):
Ok, let's begin ...
Question from Georgemarc, Sec. of "Catalyst" a startup NPO:
We are an established, but dormant NPO (educational) We are in the process of modifying our articles of incorporation to become a international funds transfer organization in order to help an orphanage in Guatemala receive US funds through an educational organization in Canada.
My question is this: "Do other organizations need this service and if so, how do I find them."
Marty Martin:
If you have been dormant tax exempt entity and are now changing what you are doing, I suggest you seek a new opinion from the IRS that what you are doing will still qualify as tax exempt.
I don't know whether organizations may need this type of service. Have you done an environmental scan and/or competitor analysis to find out who may need or already be providing this service. You may want to seek other organizations through marketing on the Internet, as well as seeking out the type of organizations you want to fund and then work backwards from their networks.
Question from Ben, arts professional:
Is there a formula to determine salaries for the founder and other potential staff members? What grants could I, as the founder, apply for which would provide me with a salary during the initial phase of the nonprofit, as many grants are for specific programs which will not be implemented until the first cycle of forming a nonprofit is completed (getting 501(c)3 status etc.). Or what other sources other than grants would there be to fund salaries?
Marty Martin:
Ben, first as a founder and executive, you will want to avoid issues related to inurement and private benefit in establishing a salary for yourself. Your board of directors should do a salary survey to establish an appropriate salary range for your type of organization and locality and contemporaneously document their findings and determinations.
If you do not yet have your tax exempt status, you likely are limited in the grants for which you may apply directly. However, when writing your grants you should be able to include a portion of your salary and benefits as a component of the grant. You should look at the grant guidelines carefully and if you have questions, talk to the funder.
Question from Laurie, small non-profit:
Is it beneficial to join an "umbrella" or "adoption" organization for fiscal sponsorship where a percentage of the funds raised go towards administration (legal, accounting, IRS filings, etc) of the nonprofit?
Marty Martin:
Laurie, the short answer is "it depends." If it is a short term sponsorship while you are seeking a determination of your tax exempt status, that is one situation. If you are looking at it as a long term solution as a cost sharing situation, then your board will need to look at its pros and cons as to what will be most effective for your organization.
Question from Lee, small nonprofit:
What's the correct way to solicit financial support from businesses and companies?
Josh Sommer:
I don't know if there is necessarily a correct way, and I think the approach will depend on your organization and the company you are soliciting from.
That said here are some tips that we've found helpful:
1. Target organizations that have some connection to your mission. This connection might be personal - i.e. a cause that one of the employees or executives cares deeply about, or it might be related to the industry that the company operates.
2. Keep in mind that some companies have two different budgets for philanthropy - one in the marketing department, and one in the corporate giving, or corporate social responsibility office.
3. Try to find ways in which a partnership with your organization can be beneficial for the company. The best example that I've seen is United Airlines partnership with Conservation International. United donates to CI and advertises for CI in their magazine and in-flight entertainment. These advertisements make the point that rain forest destruction contributes more to global warming than all of the plains, trains, and cars in the world. I cannot think of a better organization for United to support to boost it's corporate image and allay people's potential guilt about flying.
4. Identify the decision makers, and develop a relationship with them before you make an ask. If you're not just after a quick donation and want to establish a major partnership with more significant giving, you'll need to do even more relationship building and due diligence. Determine if the company's values match yours, and how you get along with the staff.
5. Finally, ASK - even if they can't give much, it seems that most companies will give something if you just ask - this is more true when the economy is performing better than it is now.
Finally, I qualify all of this by saying that we are new at corporate fund raising, and I'm still learning a lot myself. I'd recommend reading books on this subject.
Question from Christine Lindquist:
Do either of the panelists know of any innovative models for financial sustainability?
Marty Martin:
Christine, that's the Holy Grail for nonprofits. The key to a financially successful and sustainable nonprofit begins and ends with your board of directors to manage the affairs of the corporation by making certain the funding model and strategies for financial sustainability works given your resources and environment in which your nonprofit operates.
Question from Hervey and Joyce for Metro Youth:
I would like to start a youth program that is designed to help distressed teens improve their life start. Where do I get the start up information that is needed for the program. Yes I do have a program outline.
Marty Martin:
Hervey and Joyce, the first questions to ask is whether anyone else is doing a similar program in your community. If so, then how do you intend to differentiate yourself in such a way as to be sustainable over the long run. Sometimes it may be better to go to an established program that already has established infrastructure rather than trying to reinvent the wheel. Funders increasingly are looking for scale and impact rather than "another program".
If you still want to try starting the program, then you may want to contact an attorney who works in nonprofit law to advise you on the legal issues and to assist with the IRS tax filings. Liability will be a key issue for you with the need to look at risk management issues close.
In addition, you may obtain information from the IRS website and from your state nonprofit association that may prove helpful. Finally, there is a wealth of information from other organizations that work with nonprofits that will help to guide you.
Finally, if there isn't a program in your area, look to find others doing similar work in other regions. Call them and ask about their experience.
Question from Bryan, startup non-profit:
My organization will seek a small grant for a proof-of-concept exercise, then will apply for larger funding once we've proven ourselves and the concept. Where do you suggest we look for donors interested in unproven and higher-risk non-profit opportunities?
Josh Sommer:
I think this is highly dependent on the problem the exercise is meant to solve. I've found that the best donors are the ones who want personally to solve the problems that you are tackling. The more passionate and impatient a donor is about solving your problem, the more likely they will be to take a risk on you.
In general there is a subset of foundations that specifically like to fund high risk, high reward projects. Usually they will say so on their website or materials. I would suggest browsing the Foundation Center database for granters in your space that fund proof-of-concept or pilot projects.
Question from Kelly, Philanthropy and Nonprofit consultant:
1.) If I have an idea for a nonprofit and want to pitch the idea to other nonprofits who could serve as a fiscal sponsor, is there a way to "protect" my idea, perhaps having them sign some sort of confidentiality clause before I do a presentation, so they do not take my idea for the program themselves and then hire another person to do the job?
2.) I believe one part of starting a nonprofit involves forming a board. How many people must be on the board and are they liable for the financial activities of the organization, as would the board of a for profit organization?
3.) Can one "incorporate" a nonprofit and if so, are there any advantages to doing this?
4.) Are giving circles, such as the NYC Venture Philanthropy Fund, considered nonprofit organizations? And what is the difference between a giving circle and donor advised fund as I find some organizations use this term interchangeably?
5.) Is there any kind of funding one would be eligible for in the meantime or a salary one could collect while still in process of forming a nonprofit (for example, while researching the potential viability of the organization, whether its services do serve a strong enough need which donors would support etc.)?
Thank you.
Marty Martin:
Kelly, your questions could take a day long seminar. 1). Yes you can and perhaps should try to protect yourself with a confidentiality agreement. Seek legal counsel to help you. 2). There is no magic number for the number of board members. While I believe a smaller board that actually governs and manages the nonprofit is a better model, there are organizations that function with larger numbers. Use an advisory board for fund raising.
All board members are equally liable for the corporation if they serve on the board of directors. Often the standard of care for service on a NPO board is the same as business board. This is an area of the law that is changing with increasing visibility and accountability for those who serve on the governing board.
3). Incorporation is generally the better option in most instances. Liability is one key consideration here.
4). Depending upon state law, a giving circle could be considered a nonprofit organization as an unincorporated association. A giving circle generally is a more informal type of philanthropy while a donor advised fund is governed by more stringent legal and operating requirements and often overseen by a community foundation or other legal entity.
5). You have the challenge of any entrepreneur in starting an enterprise that wants to be paid. Family and friends are generally the most reliable during this early phase, as well as, maintaining current or seeking part time employment.
Question from Cyndi Ware (interested in starting nonprofit):
I am interested in starting a non-profit, an ongoing community for women where they can learn about life skills, e.g., decision making, finances, relationships, career, health in a creative and engaging way. Do you know of any organization doing that sort of thing where I might be able to do an informational interview? Also, what is the first step? How does one go about getting money to get started?
Marty Martin:
Cyndi, an interesting national organization with local affiliates called "Dress for Success" is one organization you might want to contact. They work with helping women make transitions.
Finding seed money is the challenge for the start up social entrepreneur. Start with your own network of family and friends and expand from there.
Question from Claire Grove, Stepping Onward:
I have incorporated in my state, created the bylaws and I am working on the 1023. In addition, applied to the USPTO to protect my name and logo. The initial application was rejected even though there is no organization that is close to mine with the same name. I cannot afford a patent attorney. Can you suggest another option?
Marty Martin:
Claire, patent and trademark law is a very specialized area. While you may not be able to afford full time representation, you may want to consider a consultation for an hour or two to have counsel review what you've done and give you advice.
If you can't afford a consultation, then check with your state or local bar association or law school to seek if they may have an attorney clinic that might be able to provide an hour of advice.
You may also be able to find a course at a local college or community college that may help.
Question from Ken Wyble, Liberty 7 Foundation:
What are some ways to push the IRS along and check with the IRS on the status for 1023?
Marty Martin:
Ken, unless you qualify for an expedited review which is granted in only very limited circumstances, you will have to wait out the several months delay between submitting your 1023 application and hearing from them.
The IRS tries to triage these applications so that if your organization clearly qualifies, you may hear back sooner than later. If it doesn't clearly qualify, then you will wait.
Having experienced legal counsel may help avoid some of the potential legal and drafting about which many first time or one time applicants don't know.
Peter Panepento (Moderator):
Hi Ken. You might be pleased to know that the IRS's taxpayer advocate is pushing for the IRS to speed up processing times on the Form 1023. Here's an item I wrote in July about that issue: http://philanthropy.com/news/government/5144/
irs-told-to-speed-up-applications-for-nonprofit-status
Question from Michi, ACEFC:
Hello, our mission has been rejected by the IRS twice already. what do you think our chances of success are at this point, and where can we find some exemplary mission statements for review?
Our organization is arts performance-related. The general idea is to get matching grants to make performances possible in free-to-the-public venues such as libraries and schools.
Thanks. Michi Regier
Marty Martin:
Michi, without reviewing your applications there is no way of knowing. I suggest you contact an attorney who practices in nonprofit law to review what you've done and to advise you on how to proceed.
Comment from Claire Grove, Stepping Onward:
Thank you, Mr. Martin, for answering my question.
Question from Claire Grove, Stepping Onward:
What is the best way to find a non-profit mentor in my area?
Josh Sommer:
First, is there a reason that the mentor needs to be in your area? Is the problem your organization is trying to solve unique to your locale? If not, then I wouldn't limit your search to your area.
Try contacting founders at other similar organizations. It helps if you get an introduction through a mutual acquaintance.
I've found most of my mentors through enhanced serendipity. Enhanced serendipity means intentionally setting your self for serendipitous things to happen. I'll be at an event and meet someone who knows someone who has the answer to a burning question, or has access to a needed resource. For example, I was at a 17,000-person cancer research conference and overheard the people behind me at lunch talking about their Chordoma research - turns out I had collaborated with one of their lab-mates. These guys were probably five at the entire conference doing chordoma research, and they just happened to sit behind me. I had to be at the conference to meet them - in other words, you have to play the game to win.
In general networking is probably the best way to enhance your serendipity. The bigger your network, the more opportunities will likely come across it. Tell people you know what you're looking for, whether it be a mentor or anything else - even if they don't have any ideas at the moment, they will be on the lookout for you.
Peter Panepento (Moderator):
We've reached the halfway point in today's conversation. With that in mind, I'd like to remind our audience that there is still time to ask questions. To do so, please click on the "ask a question" link and then type in your question. If you have already asked a question and are waiting for a response, please stick around. Our guests are working through your questions and we'll post the answers as they are ready. Thanks.
Question from david:
If a for-profit organization wants to take some of its community training functions and spin them off into a separate nonprofit where some of the for-profit's employees will impart services to clients for a fee, what are some of the pitfalls to avoid?
Marty Martin:
David, there are many potential pitfalls when combining a business and nonprofit organization, though it can be done. The primary one is that the tax exempt entity and/or its assets are used inappropriately for the benefit of the business. In addition, there are legal differences between operating a business as a business and operating a nonprofit, tax exempt entity. Having employees working in both may give rise to problems.
Question from Fr Fred, Episcopal Church:
I am a priest in the Episcopal Church. We want to start a nonprofit which would assist the homeless. What is the very first legal step a local congregation needs to take?
Marty Martin:
Father Fred, the fact that you are seeking to establish a nonprofit entity separate from the church is an excellent first step. Too often a church will grow a "program" while continuing to operate it directly under the church's umbrella. This is not always a good idea once a "program" begins to grow.
To establish a separate nonprofit will require incorporating pursuant to state law, creating a board of directors, and filing the IRS 1023 as some first steps.
Question from davidn:
Can you also talk about issues related to board members taking salaries? Does the issue as far as legality change whether they do/don't provide services as more than board members to the organization?
Marty Martin:
David, generally it is not a good idea for board members to take a salary for their service unless they enjoy increasing the potential for an IRS audit, repayment, and penalties, and the risk of loss of the tax exempt status. Further, public scrutiny through the new IRS 990 form will likely impact the ability to raise funds.
As for providing services to the nonprofit, this has the potential for raising similar issues and should be done only in compliance with a stringent and operating conflict of interest policy and decision to do so by a majority of the unaffected, independent board members. Again, doing so raises issues with the increasing public scrutiny of a nonprofit's 990 form which may require disclosing these transactions.
Question from Jim, considering an L3C org.:
What can you tell me about L3C organizations like RBInternational L3C? Is it beneficial to form one versus a nonprofit? Will the L3C be able to self sustain?
Marty Martin:
Jim, I'm just learning about the L3C organizations which currently are only available in four or five states. They are an interesting, though untested hybrid corporate structure that seeks to blend the social side of a nonprofit with a low capital return of a business. If you live in a state that permits the formation of an L3C, I'd be interested in information about how they're working.
Question from Peter Panepento, moderator:
Hi Josh, perhaps you can provide our audience with a little bit of background of your experience starting a group. Tell us what prompted you to create the foundation -- and a little bit about your first steps. Thanks.
Josh Sommer:
I was diagnosed with a rare form of bone cancer, called chordoma, during my freshman year of college. The prognosis and treatment options were unacceptable so my mother and I resolved to find better options. After recovering from surgery I went to work in the only federally-funded chordoma research lab in the country. Meanwhile my mom and I contacted all of the leaders in chordoma research and many in related fields, as we formed our plan of attack to cure chordoma. We started the foundation out of a need to solve some very specific problems: 1) Access to scientific resources such as tumor tissue. 2) Communication, collaboration, and sharing among researchers. 3) Synchronization and coordination of research projects.
While our overarching mission is to find a cure for chordoma, and to improve the quality of life for those that it effects, our work focuses on solving the intermediate problems needed to reach that goal. These problems are not unique to chordoma so we are developing a model that can be applied to other cancers as well.
We started the foundation when we did, in February 2007, because in May we were to co-host the First International Chordoma Research Workshop. From this workshop emerged a research road map that was entrusted to the foundation to carry out. Since then we've been driving forward that plan, all the while raising money and building infrastructure to become increasingly effective.
Comment from Claire Grove, Stepping Onward:
Thank you so much, Josh, for that great answer and the description of Enhanced Serendipity :)
Question from Keri, Small Nonprofit:
What is the best way to connect with county- and/or state-run programs?
Marty Martin:
Keri, I'd suggest contacting your county manager's office for information on the programs in which you have an interest. Similarly, you may want to contact your Governor's office to direct you to the appropriate individuals and agencies in state government. These offices are in business to help serve you and generally are most helpful.
Question from Ray, DC Stop Modern Slavery:
We are a large grassroots organization applying for 501c3 status so we can raise funds to execute our mission. Generally, can an organization start raising funds while its 501c3 application is in progress? Our fund raising would consist of applying for grants and seeking grassroots donations.
Marty Martin:
Ray, you can raise funds while awaiting for the IRS determination of your tax exempt status. If you are determined to be tax exempt, then the status will relate back to your date of incorporation.
However, you cannot indicate or suggest in any fashion to prospective donors their contribution is tax deductible. You should be totally transparent and forthcoming about your status and include a written statement that you have not yet been recognized as tax exempt and have an application pending with the IRS in all of your fund raising communications.
Question from Kristopher:
I am contemplating starting a non-profit but am aware of a few organizations already in existence doing what I'd like to do. I am cautious about not overloading the field with new organizations. Do either of you have any general thoughts regarding starting new organizations or joining with already existing ones?
Josh Sommer:
It's good that you are aware of others operating in your space. I personally believe that there are too many similar/overlapping nonprofits, and that there needs to be consolidation in many sectors.
In general I think it's far better (and probably easier) to join an existing organization. For one, you'll save a lot of time in developing relationships and a donor base. Plus you can benefit from their infrastructure, reputation, and complementary expertise/capacity. Assuming that the organization you join or partner with is adequately funded, you could devote more time and energy to the mission as opposed to fundraising. I wish there had been an organization that we could have piggy-backed on to.
All that said, if you have a very innovative idea or approach that just isn't compatible with an existing organization, or if the specific issue you are trying to address is too narrow, and would get diluted by joining another organization, then I certainly wouldn't want to discourage you from starting your own organization. Just know it's an enormous commitment.
Before you make a decision map out the entire space, and contact all of the organizations who you could potentially partner with. Really do your homework and talk with the people in charge. Get a sense of their willingness to collaborate, whether they share your philosophy, and how financially sound they are.
Comment from Jim, considering forming an L3C org.:
Comment: Thank you Marty for answering my question, I truly believe that L3C orgs can help the nonprofits. From my research, you form one and you are able to operate nationwide.
Question from Kim S.:
We're interested in learning whether we can legally act as a nonprofit without the 501c status?
Marty Martin:
Kim, if you are seeking to be recognized as tax exempt, the better practice is to file your IRS 1023 application immediately after you incorporate under state law.
Question from Starting a new nonprofit:
I'm not sure how to get started. What would you recommend? Is there a guidebook with step-by-step instructions to start a nonprofit? Do I get the 501(c)3 first? Do I need a lawyer and an accountant first?
Josh Sommer:
Yes, there are lots of guidebooks. I think we bought a bag-full when we were starting, but didn't end up turning to them very much. You don't need to get 501(c)3 status to get started. You can incorporate and operate without a federal exempt status. I would definitely recommend incorporating with the help of a lawyer with nonprofit experience. There are nuances of nonprofit law that most other attorneys just aren't familiar with. I'd recommend finding an accountant as soon as possible, but you don't need one before you incorporate. Again, you need to find an accountant that specializes in nonprofits.
Question from Susie, charter school PTA:
I have obtained 501(c)(3) status for a newly formed parent teacher organization. The school we support is a separate tax exempt organization. How careful do we need to be about maintaining our separate status? Should we avoid placing school teachers and administrators as heads of our committees to avoid conflicts of interest? We are not classified as a supporting organization.
Marty Martin:
Susie, this is a key question for the founding board to consider as it will set precedent and the culture of your PTO. I'd suggest a well considered written policy on this issue to guide the founding and future boards.
In the absence of additional information, my inclination and bias may be to consider establishing and maintaining independence between the two entities by having a majority of board members and committee members who are not school employees.
Comment from Kristopher:
Thank you Josh...I agree that consolidation would be extremely beneficial. I am afraid that by starting my own, I, and the other similar organizations, won't be as successful as we could be because we'll have to compete too much for resources, etc...
Question from Bill:
Is it better for nonprofits to join other nonprofits during these economic times if they are on the same mission?
Josh Sommer:
Unless there are compelling reasons not to, I would favor joining another nonprofit regardless of the economic situation.
Question from Naomi C. Leapheart, Philadelphia nonprofit leader and independent consultant:
Hello!
This question is for Josh in particular: What three things would you say, looking back, were the most important to do during the first six months to one year of the Chordoma Foundation's existence? How did those things lay a strong foundation for the organization as you reflect three years later?
Josh Sommer:
1. Building relationships - many that were developed three years ago are paying off today.
2. Honing in on the mission.
3. Hiring administrative assistance.
4. creating a good looking Web site.
Other things I wish we had done earlier:
1. Found an accountant.
2. Implemented a CRM and donor database.
3. Asked for money.
4. Hired more people.
Question from Steve Brand, Ways & Means Productions:
Related to my previous question, what are the typical year-to-year maintenance cost categories involved with running a nonprofit? What might a start-up's costs look like over the first few years?
Marty Martin:
Steve, this will vary from nonprofit to nonprofit depending upon what you are doing.
As part of the IRS 1023 application, you are required to create a three-year, pro forma operating budget. This is where you will need to look closely at both the sources of your revenue as well as your operating expenditures and budget. I encourage you to be as specific as you can when you establish these numbers and then create a written plan with specifics on how you intend to achieve them.
Question from Allison, small nonprofit:
I know that there are surveys of nonprofit salary averages, can you point me to the best surveys and Web sites for this?
Marty Martin:
Allison, you may want to look at Guidestar and The Chronicle of Philanthropy as two quick sources that I believe will have salary information.
Peter Panepento (Moderator):
Our annual salary survey is available to Chronicle subscribers at: http://philanthropy.com/premium/stats/salary/
Question from Tricia, small nonprofit:
Given the number of nonprofits in the U.S. and the various missions they have, what factors go into the decision to start one of your own, verses becoming an executive at an established nonprofit?
Josh Sommer:
It depends why you want to join a nonprofit. In my case it was to solve a particular set of problems that I was very passionate about, and concluded that we could not realistically solve these problems without starting a new organization. If you are just looking for experience or to make a difference, I would strongly urge you to join an existing organization. It will probably be much much easier, and as I said before, I think the nonprofit space is already pretty crowded and redundant.
Question from Laurie, small non-profit:
Mr. Martin, yes, my small non-profit would like to join (long-term) an umbrella 501(c)(3) organization that would combine the administrative costs for all of its "programs." My board has agreed that the way this particular umbrella charity operates would be both cost and time effective. Do you have any guidance you can provide about umbrella or adoption organizations?
Marty Martin:
Laurie, you should take care in drafting the agreement that defines this relationship and in particular how costs and expenditures will be allocated, as well as any attendant risks. Likely I'd limit the time frame, particularly for the initial agreement, and then make certain your board and executive director monitor the relationship and expenditures closely as you grow and develop to make certain this still makes sense economically and otherwise.
Peter Panepento (Moderator):
We're keeping the discussion open for a little longer to get to some more questions. Thanks for all who have joined us today.
Question from Dana La Force:
What are the benefits and limitations for a faith based non-profit?
Marty Martin:
Dana, unfortunately your question is too broad a question for this format and any answer will be highly dependent upon what a group is seeking to do and why.
Peter Panepento (Moderator):
For those who are starting new groups, I hope you will turn to our live discussions series as a resource for your organization. We hold these discussions every Tuesday at noon Eastern time on a wide range of topics. You can also read free transcripts from previous discussions at http://philanthropy.com/live.
Question from Steve Brand, Ways & Means Productions:
I am an independent filmmaker working on social issue documentaries, primarily for public television and educational distribution. These projects can sometimes take seven years or so to complete. Up to this point I have worked with fiscal sponsors and been the project director but have been considering setting up a nonprofit, partly because the fiscal agent fee would then be able to be plowed directly into the work. But I am not sure how much of an undertaking this would be, how much administrative time, how many tax filings (and how cumbersome), how many people I would need to manage the nonporfit, etc. Any suggestions on what pluses and minuses to consider?
Marty Martin:
Steve, the key here is what works best for what you're doing. There are benefits and costs to either arrangement--some of which your question suggests. I'd encourage you to make a list of what you currently see as the pros and cons with a dollar and estimated time expenditure for each as a starting point.
Peter Panepento (Moderator):
We have reached the end of the line. Thank you to all of you who took the time to join us today. I hope you found the information useful. I'd also like to pass along a special thank you to our guests, Josh Sommer and Marty Martin. They offered some fantastic advice.
Peter Panepento (Moderator):
Please remember to visit http://philanthropy.com/live for information about upcoming live discussions and to access our archive. Please also note that we are playing host to a special series of discussions on recession issues along with experts from the Nonprofit Finance Fund in New York. The series begins this Thursday, May 14, at noon Eastern time. You can learn more here: http://philanthropy.com/live/recession_series/
Peter Panepento (Moderator):
Thanks again.
Source - www.philanthropy.com
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