Please help my non-profit art shool navigate tax exemption, funding, and get off on the right foot.
February 16, 2012 12:16 PM   Subscribe

I'm an artist, and I help run a non-profit studio-school. Our studio is about to file for 501(c)(3) exemption and seek funding, and we've reached the limit of our collective knowledge. Please point me in the right direction(s). Length and details inside.

First of all, thank you for any help, and for taking the time to read this. I apologize in advance if this is too long.

Some info about me:
I am a representational artist living in Philadelphia. I have a BA from Penn State in drawing and painting. I have some training from some big-name, non-accredited realist art schools in Philly and New York City. I am also a former US Marine, if that matters (maybe there's some wacky program for veteran artists, or vets who start non-profits, or something, you never know).

Some info about my school:
I co-founded a small studio school in Philly with three partners, and we opened this past September after nine months of getting things rolling. We teach a very high level of realist drawing, painting and sculpture. We are attracting students locally and from around the country, and our reputation is on the rise, but our income from tuition currently only covers about half our costs. We incorporated in PA as a non-profit and will be filing the 501(c)(3) paperwork with the IRS very shortly. So far I am pretty sure we have done everything we should have.

The four of us perform every task necessary for the operation of the studio, as volunteers. We do not expect to earn income from the school; even if tuition covers expenses we will continue to work for free, with the exception of paying our instructors as much as possible (up to a rate comparable with a like institution). It would be very, very nice if each of us didn't have to shell out so much dough each month. I'm aware that startups run in the red for a while, but that doesn't mean that we shouldn't do everything we can to claw our way into the black and keep the school self-sufficient and financially stable.

Since we do everything ourselves, and none of us have a strong business or non-profit background, we are now running into the limitations of our collective knowledge on matters like grant writing, funding, tax strategy and planning, marketing, etc. I do most of the administration and bookkeeping, and am learning all of this on the fly.

I suspect there are organizations out there that specialize in helping small non-profits get off on the right foot, so if anyone knows of something national, or local to PA, we could probably get a lot of answers from them.

I don't expect legal advice or anything, just some pointers. I am generally able to figure anything out once I know where to start, but I am so time-poor that I can't really take the time to start learning every single subject from scratch. Any help any help from MeFites will be very greatly appreciated and will be a huge help on our end, even if it's just letting me know who could help me out with this stuff.

So, here's my laundry list...

Grants and Funding:
What grants / fellowships should I apply for as an individual?

What grants should my school apply for?

Does anyone have any general advice for writing successful grants?

Are there any other ways to get funding, either personally or for the school, that I am missing?

Tax / Compliance/ Small business help:
Are there any institutions that we should contact for anything (free help with compliance, tax strategy, business planning, grant writing, free material or supplies, etc.)? Or any institutions that we should seek membership, partnership, or sponsorship with?


What are some common pitfalls for a 501(c)(3) application to be delayed? Any general tips on working through this document? (I am almost done. What a beast).

Are donations made to the school during 2011 tax deductible for the donors, even though we are not a real 501(c)(3) yet? We will gain retroactive status when we are approved, so can donors deduct their contributions for their 2011 filings, or will they have to re-file once we get the status?

And lastly: as a school, we are required to publish our non-discrimination policy in a local paper that is likely to be read by a very diverse audience. I am assuming it would be the Philly Inquirer or the Philadelphia Weekly, but I'm not sure. Also, how can we go about his in the most cost-effective manner possible? We don't have hundreds of dollars to burn just to publish that we're not racists, in order to satisfy this very outdated requirement.

I think that's it. I apologize again for the wall of text, and thank you all in advance for your help!
posted by amcm to Grab Bag (10 answers total) 3 users marked this as a favorite
Just call the Philadelphia Volunteer Lawyers for the Arts; it's a clearinghouse for pro bono matters. They'll let their membership know that there's an entity looking to file a 501(c)(3) exemption request and someone will help you.
posted by Admiral Haddock at 12:30 PM on February 16, 2012

I don't know the answers to your questions, but I know where you should start. Talk to the Pennsylvania Association of Nonprofit Organizations. I work in the same office as the Maryland version of this organization, and it looks like PANO also offers technical assistance of just the sort you're looking for.
posted by postel's law at 12:31 PM on February 16, 2012

You could check with your local SCORE chapter. Lots of the nonprofits around here got their starts with help from SCORE workshops. Even in a wee city like mine they have free clinics for various nonprofit issues including startup and 501(c)(3) stuff, I'd be surprised if they didn't have far greater resources in a city the size of Philadelphia.

You can also schedule free counseling with them for specific issues, some of the volunteer counselors have amazing backgrounds and they try to pair counseling with specific needs so you'd probably end up with free help from someone with hands-on nonprofit experience.
posted by mullicious at 12:34 PM on February 16, 2012

The Foundation Center has resources on grant writing and foundations to give you some general information about how that works. Their headquarters in NYC has classes but they probably have a cooperating collection near you - usually a public library that has some of their resource materials. It would probably be a bit hard for people here to tell you where to apply for specific grants and funding. Finding someone local to be a fundraising consultant / volunteer would probably work best. These needs are good to keep in mind too if you are looking for board members.
posted by oneear at 1:03 PM on February 16, 2012

The Foundation Center cooperating collection in Philadelphia is the Regional Foundation Center at the Philadelphia Free Library. Their collection looks really solid and oneear's right, you can always go into the NYC Foundation Center location for workshops there.

On an individual note, I would also check out NYFA Source - despite the name/origin, it's a nationwide free database of funding opportunities for artists from the New York Foundation for the Arts.
posted by clerestory at 2:20 PM on February 16, 2012

Lot of good advice here. I'd add - talk to your local non-profits. I'm the board chair of a young arts non-profit and we've gotten several grants from our local Community Foundation. There are likely to be other local funders you should talk to - your local Rotary, Kiwanis, schools, and businesses may support you. We've had donations of materials from a local lumber yard, our local brew-pub has thrown fundraisers for us where they both let us host a silent auction and donated a chunk of the evening's take to us. We get a lot of support from the school system in our community - we run our kids classes in the schools after school for a very nominal cost.

Do you have a board? You want to expand your board beyond the 4 of you to both tap additional donors and additional expertise. For example both of the arts non-profits whose boards I'm on have accountants as their treasurers. A good board will expand your organization's reach and will help you raise money. Your local universities are likely to run some non-profit training for board members. I've been to free sessions at the University of Michigan's Business School which talked about board member responsibilities and gave enormously useful advice about fund-raising. Also - by-laws - look at other similar non-profits near you and ask if you can see their by-laws. You need to have them and it's better to not reinvent the wheel.

Re grant writing - you're telling a story and selling a product. It is crucial to follow the granter's instructions carefully. I've reviewed grants where the key questions the funder wanted answered weren't. Make it easy for reviewers to read your proposal and understand what you want to do, how you want to do it, how it fits in with their mission and how their funding will be used.

Hope this is useful! Good luck!
posted by leslies at 5:05 PM on February 16, 2012

Check in with the Small Business Administration - they can help with a lot of your questions, and they have volunteers who will partner with you in almost every kind of business. I got superior leads on grants and a lot of very valuable accounting advice from them.

They exist mainly to help people create jobs, which it sounds like you are doing. Check them out. Good luck with your business!
posted by halfbuckaroo at 4:33 AM on February 17, 2012

Go to they have a lot of advice on this and have software and videos and stuff for non profits. You could even get 4 copies of photoshop for your school for free.
posted by majortom1981 at 4:47 AM on February 17, 2012 [1 favorite]

First I'd suggest the Greater Philadelphia Cultural Alliance. It seems very much like an organization that I've had some involvement with here in Cleveland (Community Partnership for Arts and Culture) and something like CPAC is exactly what you're looking for - they provide help in locating and applying for funding (including grant-writing), info and seminars on how to make an arts organization financially stable, connections to various legal, accounting & bookkeeping resources, connections to other arts non-profits in the area, etc etc etc.

You should also look into the Pennsylvania Council On The Arts which seems to be a similar organization on a statewide scale.

As far as actual funding, possibly the Philadelphia Cultural Fund and the Philly branch of the Knight Foundation.
posted by soundguy99 at 5:44 AM on February 17, 2012

Response by poster: Thank you all so much! You've all given me a lot to go on. I found some help for my specific questions, and I'll be working on this list for a while.

The answers and general level of helpfulness have been very impressive.

Thank you all so much!
posted by amcm at 2:05 PM on March 3, 2012

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