Should we make our future educational organic farm a non-profit?

October 30, 2009 5:11 AM

Should we make our future educational organic farm a non-profit? If so, how?

I inherited some old family land out in the country (about 50 acres), and my partner and I are planning to build a rammed earth passive solar house and organic permaculture farm there. Since it is in rural north Georgia, it will be one of the first (if not THE first) of its kind. For instance, we already found out that we'd be the first to hook up solar panels to the power grid in the tri-county area that the local EMC serves.

We want it to be an educational "living lab" that 4-H, FFA, Scouts, students, and other groups can visit and learn from. We also plan to have workshops on permaculture, natural building, organic gardening, etc. There are two high schools within 10 miles, the University of Georgia is 40 miles, and Atlanta is 80 miles, so we think this is a definite possibility.

Our goal is to have it be an educational outreach for the community, where people can come learn practical skills and knowledge to better themselves and the planet. We think this is especially important in rural Georgia, where (it seems from my growing up there) people aren't often challenged (or given the opportunity) to seek alternatives.

I've heard of other educational farms incorporating themselves as 501(c)(3) non-profits. My questions are:

1) Judging from the goals I outlined above, is this a good idea? (If not, why not?)

2) Can it be done for an entity that is still in the planning stages?

3) What is the best website or other guide that details the process?

posted by bengarland to law & government (11 comments total)

I personally don't believe a non-profit is the way to go.

I believe enterprise is what drives this country and makes it a great place to live. In creating a profitable enterprise, you directly contribute to the health state of the economy on the local and regional levels. As your business grows, so does it's influence on external economies. It translates into jobs, commerce, knowledge, and wealth which, in turn, spawns more of the same. The result is a successful and stable society.

With respects to #2, I'd say yes - why not? Unless I misinterpret your meaning - be prepared to contribute ample hours of additional planning with respects to compliance and reporting. The compliance process alone kills most budding 501(c) and unless you have a core following that can float your administrative expenses which will be fixed.

Determine if your business model is sustainable.

"Are there enough qualified students to enroll in my classes to cover my expenses?"
"What are the costs associated with communicating with those students / school districts?"
"What are the legalities and security issues when dealing with students?"
"What type of insurance will I need and how much will it cost?"

I personally found www.sba.gov a good resource during my start-up but there is absolutely no substitute for networking with people who have done something similar to your plan.

It'll be fair to mention that non-profits that educate citizens are eligible for grant / loan assistance from the Federal Government. Info on that is also available at sba.gov.

In the end, it's about what you want to accomplish and what that accomplishment is worth to you.
posted by Aegean at 5:26 AM on October 30

I don't know anything about the legal issues, but I think making it a non-profit educational organization is a great idea!
posted by mareli at 6:49 AM on October 30

1) Judging from the goals I outlined above, is this a good idea? (If not, why not?)

It's an excellent idea. Here are some reasons.

Having 501(c)3 status makes you available for a very wide variety of grants from federal and state sources as well as from private foundations.

It makes you eligible to start a membership program and take tax-deductible donations from people who support your farm.

It often means that if you bring in presenters - chefs, speakers, workshop leaders - they will offer you a more reasonable rate because you're a nonprofit.

You'll be required to establish a board with fiduciary responsibility for your organization, which connects it to the state and is responsible for seeing that your tax exemption is used for the public good. Such a board can be an amazingly wonderful structure for bringing (free) expertise into your organization - lawyers, finance people, educators, agriculture folks. They will volunteer their time, contacts, and knowhow to improve your organization.

I believe enterprise is what drives this country and makes it a great place to live. In creating a profitable enterprise, you directly contribute to the health state of the economy on the local and regional levels. As your business grows, so does it's influence on external economies. It translates into jobs, commerce, knowledge, and wealth which, in turn, spawns more of the same. The result is a successful and stable society.

I want to point out that all this is true of nonprofits as well. Nonprofits are enterprises and have significant positive impact on local economies. They create millions of jobs nationwide and stimulate local economic activity in both direct and ancillary ways. There is nothing about setting this business up as a nonprofit that detracts from any of these desired impacts.

I'm a little bit familiar with the farm/agriculture/permaculture/environmental-education world, and I can't think of a single such entity that is surviving on program fees or product sales alone. The economic climate is not favorable for that. Nonprofit models enable these institutions to qualify for funding, build membership, and subsidize operations, and in addition they build outreach and education into the organization's DNA which helps keep the mission clear. I heartily recommend. You might want to look at some models, like the Farm Institute, Stonewall Farm, Stone Barns Center, and others. It would even be fine to contact some of these places directly to discuss your organizational plan.

2) Can it be done for an entity that is still in the planning stages?

Absolutely - now is a good time to do it. It's not expensive. it's understood that organizations grow and change, and as long as you are still serving the central purpose stated in your charter, your organization will not need to limit itself. Getting nonprofit status now might enable you to begin doing fundraisers, applying for grants, and finding other startup funds earlier.

3) What is the best website or other guide that details the process?

That depends a little bit. To start with, your state should have an agency for nonprofits, often called a Center for Nonprofits or something like that. Ah yes, here's Georgia's. Bless their hearts, they even have a start-up packet for people like yourselves. I am big fan of BoardSource for board-related issues, and they have some good free resources, including some startup info. Foundation Center is another excellent resource, especially when you're looking for fundraising leads, but it also has a startup page. The National Council of Nonprofits is of help too.

I suggest you spend some time studying these nonprofit resources first, to get your minds around what's involved. The next step would be to sit down and craft a potential mission and vision statement and a possible organizational structure (who's on staff, how/what would they get paid, how big a board, composition of board, bylaws, meeting frequency and structure, etc). Then try to think in terms of a three- to five-year plan, and outline what you'd like to accomplish in what areas given that time frame. From those goals you can drill down to the specific tasks you need to do in each area, and that can guide your activities. At this same time you should begin preparing a budget, to the best of your ability, so that you can determine your financial needs and assets.

Sounds awesome. Good luck!
posted by Miko at 7:10 AM on October 30 [3 favorites]

You might also want to check out the possibility of doing Community Supported Agriculture.
posted by mareli at 7:37 AM on October 30

Also, after you do some of this research, don't be afraid to reach out to people who have started innovative organic farms, educational programs, and anything else related to your mission. You don't have to totally reinvent the wheel!

The more enterprises like this that exist successfully, the better for everyone involved. Network with your colleagues.
posted by desuetude at 8:25 AM on October 30

We went to the Georgia Organics conference last year which was fantastic. We're planning to go again every year hence. We also recently joined our local Slow Food chapter (Athens, GA) and are looking forward to getting involved. Our next step is to network with some Permaculture folks in Georgia. We've already been working with the Ashevillage Institute in Asheville, NC and love what those guys are doing.

If you have any ideas for other groups we should be working with that are close to us, let me know. We're in Toccoa, GA, 30577.

It's been a long process for us to figure out what we want to do (we're still trying...), but we started a blog a year ago. If anyone wants to check it out, send me a MeMail. I don't want to put the link here and be accused of self-promotion.
posted by bengarland at 9:04 AM on October 30

Bengardland, you should put the link to your blog in your profile. There is no problem with doing that I believe. Good luck, this sounds like an exciting project!
posted by meta87 at 9:44 AM on October 30

Hi there,

I've thought about this in connection with some (very vague) project ideas I turn over in my mind sometimes. The main drawback I can think of is that I *think* that nonprofits must have a board to steer them. Not only do you have to find people to serve on the board, but theoretically they could vote to replace you as chief executive later. This could be a good thing if you get crazy when you're 65, but I doubt you'd enjoy it....

Also, finding board members who actually can spend time on your enterprise can be tricky. It sounds like you have a fabulous concept, but you'll have to be good at finding and befriending people and communicating your ideas. If you do find a proactive board, you'll have to be careful that you don't communicate only part of your ideas, and have your board go in a direction that doesn't seem to conflict with your mission statement but that does conflict with some unspoken assumption you've been harboring about the right way to do things.

In short, it means you'll be doing more work on communicating, but potentially less work on boring administrative stuff.

All that said. there's a lot to recommend being a nonprofit. This is just the one objection I could think of.

Some people love the idea of getting "investors" and someday "going public", but this has all of the disadvantages I listed above, and really doesn't seem that great. It would potentially cut you off from a steroid-like means of expansion (an influx of cash from people hoping to profit from your ideas and initiative), but it doesn't sound like that's where your interests lie.

Good luck. I'm from Georgia, and I wish you well. Don't forget about Georgia Tech; you might find some interested folks there.
posted by amtho at 9:48 AM on October 30

Put blog link in profile for those who are interested.
posted by bengarland at 9:54 AM on October 30

theoretically they could vote to replace you as chief executive later. This could be a good thing if you get crazy when you're 65, but I doubt you'd enjoy it....

It's possible to compose your board in such a way that this cannot happen.
posted by Miko at 11:07 AM on October 30

Some other resources:

American Farmland Trust
Business Alliance for Local Living Economies
Local Harvest
USDA's list of Sustainable Agriculture Organizations
SARE - Sustainable Agriculture Research and Education

One idea to help build a local constituency is to offer programming through the adult education programs of local school districts. My Slow Food chapter did this and brought in a number of farms and food producers. The Adult Ed people are always looking for free or low-cost presenters, and doing this introduces you to a pool of interested learners who you can then add to your mailing list for farm programs. It also may introduce you to potential partners.

An excellent way to draw grant money and serve lots of kids is to develop multiple-visit partnerships with area schools, who may come to you several times a year. This is often much more supportable than single-visit field trip-type programs.

Also look to your local/state social services agencies for possible partnerships. Who would benefit from learning about/working on the farm? Could there be therapeutic programming? Stuff for seniors or adjudicated youth? Social services programs are great because they come with their own staff support; you just provide the content and environment.

Develop a media mailing list so that, as you offer public programming, you can send press releases and program announcements to food and lifestyle magazines, newspapers, blogs, travel sites, state information centers, etc.
posted by Miko at 11:18 AM on October 30