3 Things Every Startup Non-Profit Organization Should Know - Copy 1

Dec 10, 2013 | By: John La'Gere

Of course there are numerous things involved in starting and running a non-profit or not-for-profit organization (NPO). Here are 3 that should be kept at the top of your list.

1. Type of entity

There are several ways to operate your organization and projects. If you are just setting up shop, consider working under a parent organization that is already exempt from income tax under IRC 501(c)(3) or other provisions. You simply answer to them at least once a year and thereby avoid all the cost and hassle of setting up a completely new entity. You may even find their oversight very helpful. You could initiate a similar arrangement if there is a new project that is outside of your normal programs and is either temporary or matches well with another NPO.

2. Governance

We at Johnson, Glaze & Co. strongly recommend you have an independent Board. You need the resources of smart people and the confidence a Board brings to your contributors. Many of us hesitate when we get to the word "Accountability", but it makes for a stronger NPO. Get some friends, colleagues and professionals on your Board. Do not ask your spouse or family members to join the Board. They can serve in other capacities.

3. Financial stewardship

CPAs and attorneys are the first to warn every Board member of their responsibilities when it comes to the money. Get at least one financially astute person on the Board and ask them to look at your internal controls, sometimes called "checks and balances." You are taking people's money and have a fiduciary responsibility to them and others for how wise you are with those funds.

If all of this makes you cringe, a for-profit business may be a better venture. There are many ways to achieve objectives and not all of them are as complicated as running a Charitable Activity. I would like to hear your thoughts on the subject. Give me a call at 503.390.7880.

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