Should you start a nonprofit?

A nonprofit organization is generally begun by individuals who have noble interests and wish to benefit the community as a whole. But you need to have a drive and ambition to start a nonprofit, because it is an institute working for the advantage of others and you don’t get to earn anything from it for yourself.

Even seasoned business executives sometimes can’t seem to run nonprofits well. This is simply because there are different dynamics for operating a nonprofit than a for-profit. In fact if you are thinking that starting a nonprofit will be easier and simpler than you should rethink starting a nonprofit. They are subject to far more laws, more ethical obligations, and a much higher degree of scrutiny that other types of organizations. Record keeping must be more complete and organized. Additionally, managing volunteers has a different set of challenges then managing paid employees.

Nonetheless, this isn’t to deter you in any way from starting something with a good cause and we are here to discuss the pros and cons of starting a nonprofit.

A good nonprofit lawyer will help you work out the finer details of starting a nonprofit so that you don’t make the common mistakes that most people commit whenever they are starting their nonprofit.

If you don’t know which kind of nonprofit you want to start, let’s delve into which ones you can get yourself involved in. Once you have decided on a type of nonprofit, whether it is one of the types listed below or something completely unique then it is time to narrow your mission, vision, and goals. Make sure there is a real need in the community you plan to serve. Then book an appointment with a qualified and experienced attorney to strategize the legal formation of your nonprofit. Please keep in mind an accountant is NOT an attorney. While, we strongly recommend our clients work with a CPA, a CPA should not be giving you legal advice on how to set up and implement best practices for your organization. They should definitely not be drafting your legal documents like your bylaws. You’ve been warned.

  1. Healthcare Based Nonprofits

These are some of the most important nonprofit organizations or charities that can be made. They range from the most debilitating common diseases to rare health issues, with the aim that more money can be invested in the research of the disease. Some examples include cancer and its different types (breast cancer, leukemia, bone cancer etc), tumors, blindness, Hodgkin’s Lymphoma etc. These nonprofits also work for people with disabilities or even mental health issues that can lead to suicide.

Without these charity foundations, there wouldn’t be any awareness among the masses. These nonprofits not only work towards research but also towards providing treatment for those in need, and offer support for people who have lost their loved ones in the process. If you are interested in this field be aware that there are many different regulations that govern the healthcare field and if you are operating in this space your nonprofit will be subject to these regulations and requirements.

  1. Environmental nonprofits

These days, everyone is aware of the importance of green living. The climate change issue has been discussed on a global level and leaders from all countries are taking steps to reduce their carbon footprint.

Nonprofits that focus on environmental issues are involved in raising funds for creating more parks and greenery in the community, raising awareness in schools and organizations, conserving energy and reducing waste. Environmental regulations, waste disposal rules, and various types of permitting and zoning regulations can come into play with these organizations.

Many times environmental nonprofits are also seeking to conserve habitats or certain species. Being familiar with the laws in these fields is imperative.

  1. Animal care nonprofits

Many charity organizations are being operated solely for animal rights and their protection. Different animal welfare organizations cater to different types of animals. Some nonprofits are for the protection of endangered species while others help in the rescue and healing of tortured animals, like those used in circuses and public shows. Others just seek to set up shelters or homes for senior citizen pets, who have nowhere to go or are looking for good homes.

So if you are thinking about running a charity foundation for animals, then researching existing nonprofit organizations for animals is be a good place to start. Permits at the city and municipal level that deal with pets, livestock, and wild animals are important to familiarize yourself with. Any nonprofits dealing with animals on Federal or State lands will need to be aware of special regulations and may want to reach out to work in concert with local enforcement agencies.

  1. International nonprofits

These nonprofits are for handling important issues on an international level. There are many problems plaguing developing countries such as poor healthcare, lack of clean water, trauma from war etc. International nonprofits have a much broader scale in terms of operation. They can cover anywhere from health issues to educational concerns for people in other countries. Some include child sponsorship and adoption, human rights and trafficking issues and disaster relief etc. This is where having someone who is not only familiar with nonprofits, but also familiar with working with organizations in several countries is essential. Our attorneys are experienced in working with international organizations.

  1. Educational nonprofits

Education is an important issue, even in developed countries like America, so the vast number of educational nonprofits is no surprise. Education is one of the most innovative and rapidly changing fields right now.  Such organizations cater to every age range and can be varied in purposes. For e.g. a nonprofit could be for children with dyslexia, ADHD or any other learning disability. Others could be for bright children from impoverished backgrounds so that their college tuition can be funded.  Some charities are for the development of the school and its facilities so that they can be at par with the other good schools. This is a field that is growing fast.

  1. Nonprofits for arts, culture, heritage and entertainment

There are many charities that run solely for the preservation of cultural heritage, old monuments and historical buildings, while there are many others to promote and create awareness for arts and entertainment. These types of nonprofits often are often set up to be Museums or Foundations to benefit the public.

So, we have covered many types of nonprofits that you can start and we have also discussed how important it is to speak with qualified experienced lawyer specializing in nonprofits. Now we will discuss the special benefits of having a nonprofit and the invaluable role they play in our society:

Helping our communities

As we mentioned earlier, a nonprofit venture is not for everybody, but for those who do it, they get a high level of personal satisfaction, because they are giving back to the community or society in some way or the other. You have altruistic motives rather than personal ambitions and their communities are benefited in return.

When people are helped by one another, it creates a chain reaction of harmony and positive human potential in the community or society as a whole. Helping others gives a feeling of selflessness. It shows that you have the capacity to assist others in need.

Increases credibility

Let’s say you have a business running in Plano but you also want to start your very own nonprofit. This will in turn, give your existing business credibility in front of others because it shows that you value your Corporate Social Responsibility (CSR) and are even going out of the way to create an organization that is solely responsible for giving back to the community.

Over time, if it becomes one of the best nonprofits in Texas, your name in the business community would be well respected as well. Note, if you plan on having a nonprofit that partners with or is associated with a for-profit these are lots of ethical issues that need to be considered. These types of relationships need to be set of with care and careful consideration. We highly recommend working with a nonprofit attorney and CPA, who have both had experience in setting up and working with entities that are set up to work in partnership.

Tax benefits

Most people will tell you that applying for and getting an IRS tax exemption is one of the huge benefits of setting up a nonprofit. You can retain most of the donations and plan your budget accordingly. Not only that but there are minimal taxes on contributions and donations to your nonprofit so it is a win-win situation. Be careful. Many nonprofits get themselves into trouble by not providing accurate information regarding how much a particular donation is really tax deductible and, how much is not. Just because it is a donation does not mean it is fully deductible. Some types of revenue your organization may raise may specifically be taxable.  Additionally, nonprofits are companies set up to benefit the public. Stay away from anything that may even look like private enrichment to an individual or group of individuals. Also, stay away from investors. You should not be enticing people to invest in your nonprofit in exchange for a return. These types of ethical issues will but your nonprofit status at risk and may have real legal consequences.

You just have to ensure that you are running the organization in the most transparent way possible so that the IRS doesn’t create any problems in the future.

Creating an impact and legacy

Everything creates an impact in the world, even at the microscopic level. Therefore, don’t doubt yourself just because your nonprofit doesn’t have an immediate huge impact. You can create impact in the world just by rescuing stray puppies one puppy at a time or providing charity for kids’ education one kid at a time. Within time, these acts often create a snowball effect and you might just see the fruits of your labor in ways you never expected.

If starting a nonprofit is your calling, then the best route to go forward is by researching and then handling the legal issues first. For that, you will always need the help from qualified and experienced professional that specialize in nonprofit work. The Law Offices of LaSusa & Deb PLLC are the right law firm to handle such cases for you.