Starting a Non-Profit... Where to start?
January 10, 2010 6:56 PM   Subscribe

Starting a Non-Profit... Where to start?

I've received nothing but the best advice on my previous questions, so here goes another one. I am attempting to start a non-profit in which the profits from our sales of items (HDMI cables) will be donated to charity. Every 6 months we will crowdsource another charity from Internet submissions and votes, then donate the previous 6 months profits to that charity. So... Where do I start? We already have a corporation here in California, but initial research has shown that we need to start fresh with a new corporation. Do you think I can approach an existing charity and ask for the services of their lawyer,accountant etc. in return for the first 6 months donation? Any ideas would be great. Our goal in 2010 is 1 million dollars donated to charity, which based on our outstanding 2009 is totally attainable. Thanks in advance for the help, --AW

P.S. If any able-bodied lawyer, graphic designer, web-designer, or anyone else wants to get involved with this great cause, please PM me and we can talk further.
posted by weiler63 to Law & Government (7 answers total) 4 users marked this as a favorite
I'm a little unclear on how this works.

- is this a project operating from within an existing for-profit corporation?
-in what way would this be different from simply making a financial donation to an existing charity? Do you definitely need a separate nonprofit entity to be making these sales to raise funds?
- what is the impetus for the project? Have you already been donating proceeds from the sale of certain items?

I am not sure I can give advice for this situation, but it would be helpful to understand a bit more about what you're thinking.
posted by Miko at 7:25 PM on January 10, 2010

I'm in Michigan...

In Michigan a non-profit needs to be registered with the state. We filed articles of incorporation as a non-profit, we applied for non-profit statis with the IRS. We established a volunteer, unpaid, board of directors that meets on a regular basis. We are audited annually (10k per year)...we have an independent entity do our books and payroll..

If you want to be legit, it is not an easy process.
posted by HuronBob at 7:56 PM on January 10, 2010

Response by poster: I never thought of it that way- running it from within our for-profit and just donating the proceeds from that division. I'll talk to my CPA about that as far as tax ramifications. If that works out, it should be easier to do it that way and avoid the extra fees associated with a non-profit. Thanks for the advice, if you have any more ideas, please keep them coming!!
posted by weiler63 at 8:10 PM on January 10, 2010

We are doing this at Animal Charms. We donate at least 10% of every sale to a random animal charity.. We actually started the company specifically to generate enough income to be able to donate more money to animal charities..

Its easier than trying to set up and run a NFP (we are considering setting up our own large animal rescue after we move)..
posted by SteveG at 8:50 PM on January 10, 2010

Seconding Miko. Make the money with your for-profit. Give the money away. This is how most corporations do it. I don't understand all the tax implications but I guess when a corporation gets crazy large it is sometimes in their best interest to establish their own nonprofit foundation or whatever -- but I really don't think that this applies to most corporations. FWIW: I work for a nonprofit and we get many donations directly from corporations.
posted by fieldtrip at 9:18 PM on January 10, 2010

Having spent significant time as the retail general manager for the sales-side of a large non profit, I can't think of any benefit to starting another org instead of just donating in place. Seems like a money laundering operation more than a charitable giving question. (I'm sure it's not, but that's what I get from it.)

It will absolutely benefit you more (from what you've posted) to simply "tithe" x% of your net by month/quarter/year. Any non-profit with a clue will be able to provide you with tax receipts that should be more than sufficient for tax purposes.
posted by TomMelee at 5:40 AM on January 11, 2010

I work for a large NGO, and we have numerous large and small companies donating to us in similar ways, and like other have said, very few have non-profit arms.
posted by kimdog at 7:55 AM on January 11, 2010

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