Can we handle the non-profit incorporation process ourselves?
October 12, 2013 1:26 PM   Subscribe

We're creating a national non-profit based in New York City. We're new and poor and considering tackling the process of incorporation ourselves. Is this a bad idea? Do we really need to lawyer up? If not, any advice as we embark on this?

The details:

- We're a national network/community dedicated to promoting and progressing an art form. Our team is based around the country, as is the community we serve.

- We're about six months old, with very few financial resources, and no official staff yet. We're in the early stages of figuring out the fundraising process. We have a strong, dedicated team of volunteers and a nice network of contacts but no fundraising experience, so we're expecting it to take some time.

- We don't have a lawyer on the team. We're hoping we can ultimately find one who might be willing to help or hire one once we have the resources -- but, again, we expect this to take some time.

- Our priority is incorporating as a 501c3 and the then applying for the tax status. We're in no immediate rush to get the tax status right away. (We understand that we can begin fundraising while it's "pending" with a fiscal sponsor.)

The questions:

1. Are we being pound foolish by handling this ourselves?

2. Is there anything we should know before jumping in? What are the challenges or difficulties we might face?

3. How long will the process take given our lack of experience? 10 hours? 100 hours?

4. Any other thoughts or advice about this process, especially with regard to an association or a community?

5. Are you a lawyer? Any chance you want to help the world while connecting yourself to the nicest, smartest, most physically capable group of people in America?

Seriously, though, any thoughts would be great. Thanks all!
posted by vecchio to Law & Government (14 answers total) 1 user marked this as a favorite
 
Go talk to Volunteer Lawyers for the Arts.

They offer all kinds of legal services for all sorts of artists including workshops on setting up a non-profit.
posted by brookeb at 1:30 PM on October 12, 2013 [1 favorite]


you're not being foolish but with so many lawyers in the market why not seek out pro bono help? the major goal in mind is ASK THOSE WITH A PREDISPOSED UNDERSTANDING OF YOUR PREMISE and not your friends or family to be on the board. Your friends can write a grant with you but should not be in the position to fire you, only people experienced of your field should be able to do that.
posted by parmanparman at 1:33 PM on October 12, 2013 [1 favorite]


Other thing, if you're not feeling up for non profit status you could seek fiscal sponsorship from an established charity like Atlantic Philanthropies
posted by parmanparman at 1:34 PM on October 12, 2013


Yes! Volunteer Lawyers for the Arts! I know the NJ one routinely refers for pro-bono incorporations and 501(3)cs all the time (my dad is the board president.) VLA is a great organisation that does, among other things, exactly what you need.
posted by DarlingBri at 1:36 PM on October 12, 2013


My experience:

I incorporated a 501(c)(12) (mutual or cooperative company) and we got to file the somewhat-simpler form 1024 instead of the form 1023 required for 501(c)(3) organizations. I handled the state incorporation and tax-exempt status myself. The federal one took me three weeks, I got it wrong, and I wound up throwing in the towel and paying someone else to help.
posted by fireoyster at 1:41 PM on October 12, 2013


Response by poster: Thanks all. We considered Volunteer Lawyer for the Arts, but we've heard it can take a long time since they're swamped with demand. Maybe not the case?
posted by vecchio at 2:21 PM on October 12, 2013


approach law schools directly, they have employment boards that will be useful.
posted by parmanparman at 2:43 PM on October 12, 2013


You have no money and no contacts; I don't think you're in a position to be dismissing free options without trying them as a port of first call.
posted by DarlingBri at 3:09 PM on October 12, 2013


I think if you need a lawyer to take on a case then there might be a wait, but VLA regularly runs "how to set up a 501c3" workshops and I don't think there's a huge wait or wait list to get that kind of assistance.
posted by brookeb at 3:26 PM on October 12, 2013


I did the 501(c)3 process myself and it went fine, but I think it depends on how comfortable you are with legal forms and accounting. The IRS website has details and help for each question as you fill it out, so I found it more tedious than challenging. If I had been based in NYC I definitely would have at least tried to get pro bono help so that I could focus on running my nonprofit instead of doing paperwork.
posted by treehorn+bunny at 4:00 PM on October 12, 2013


I would say it took me maybe 10 hours to do or less (but 10 painful hours). Took longer because we had existed for 7 years with an umbrella organization and had a lot more financial history than you would have. Incorporation didn't take nearly as long as that, for my organization the trickiest part was deciding which state to incorporate in, and it sounds like you have an obvious home base.

Once I filed, it took an extremely long time for the status to be granted. I want to say it was around 6 to 8 months.
posted by treehorn+bunny at 4:03 PM on October 12, 2013


Brooklyn Law has a clinic for NFPs. they may help. FWIW, I don't think the process is that bad. I'm a lawyer, so that helps, but there are self help resources all over the place (NY AG has a nice packet on the incorporation process, and the IRS 1023 isn't all that bad.)

if you ever want general info, feel free to memail me.
posted by jpe at 6:06 PM on October 12, 2013


I did the 1023 and state paperwork (IL) for my small arts org and it went fine.

Having the notes from another founding members attendance at a Lawyers for the Creative Arts workshop on incorporation paperwork was helpful, and before I filled everything out I spend a lot of time reading the instructions for the 1023 and writing down questions, which I then called the IRS to ask about. (They were quite helpful, but be prepared to wait on hold!)

If you want advice on specifics or would like to take a look at our filing paperwork, memail me!
posted by bubukaba at 9:02 PM on October 12, 2013


Response by poster: Hey all, thanks for the advice! I'll drop some memails...
posted by vecchio at 2:51 PM on October 13, 2013


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