Nonprofit or Not?

At some point, most rescuers give some thought to incorporating and applying for nonprofit. There are definite advantages, but considerable disadvantages as well. Many groups do fine and accomplish their goals completely unincorporated, and without formal organization paperwork and written operational rules. If you can continue to accomplish your nonprofit purposes and goals informally, you may be happier staying small.

• IRC501(c)(3) nonprofit corporations are eligible for state and federal exemptions from payment of income taxes.
• Your group would be eligible to receive both public and private grants.
• Seperate and ongoing legal existence. Since your corporation would be a separate legal entity from the people who manage and work for it, it continues to exist even with a change in management.
• Employee benefits. Principals can also be employees, and as such are eligible for benefits including sick pay, group life insurance, accident and health insurance, payment of medical expenses, etc.
• Formality and structure. Clear-cut delegations of authority and specific operating rules in the Articles and Bylaws, can contribute to the smooth operation of your group —particularly as it grows.
• Lower postal rates on third class bulk mailings.
• Many publications offer cheaper classified advertising rates to nonprofit organizations.
• Many Internet service providers offer discounted space to nonprofit organizations.
• Nonprofits are the exclusive beneficiaries of free radio and television public service announcements (PSAs) provided by local media outlets.
• Many stores (such as the Price Club) offer lower membership rates to nonprofit employees.

• Incorporation Costs and Fees. Not only is there the cost of incorporating and the federal tax exemption application fee, there are accountant and/or attorney fees involved.
• Time and Energy. Setting up and balancing books and bank accounts, depositing and reporting payroll taxes, in addition to the time and energy to incorporate in the first place all take time away from what you *really* want to do --take care of the birds.

WEBSITES:

Foundation Center - independent nonprofit organization established by foundations to increase public understanding of the foundation field.
Yahoo: Grant Making Foundations
Action Without Borders - includes a directory of thousands of nonprofit websites, an online library for nonprofits and a database of volunteer opportunities nationwide.
NonProfit Gateway - Federal government nonprofit resources.
U.S. Department of Education NonProfit Gateway
Grantseeker's Guide to the Internet
Funding Information Center - a free, self-service library of research materials on grants, fundraising, and nonprofit management.

RECOMMENDED BOOKS:

How to Form a Nonprofit Corporation (5th Ed) This book shows step-by-step how to form and operate a tax-exempt nonprofit corporation in all 50 states, and includes complete instructions for obtaining federal (501)(c)(3) tax exemption and for qualifying for public charity status with the IRS. ~ Usually ships in 24 hours. Anthony Mancuso / Paperback / Published 2002 $31.49

The California Nonprofit Corporation Handbook (10th Ed) ~ Usually ships in 24 hours. Anthony Mancuso, Barbara Kate Repa / Paperback / Published 2004 $31.49

The California Nonprofit Corporation Kit: Ringbound (California Nonprofit Corporation Kit, 4th Ed) ~ Usually ships in 24 hours. Anthony Mancuso / Ringbound / Published March 2004 $41.99

Financial & Strategic Management for Nonprofit Organizations ~ Usually ships within 2-3 days. Herrington J. Bryce / Hardcover / Published 1992 $62.65

Doing Good Better: How to be an Effective Board Member of a Nonprofit Organization ~Usually ships within 2-3 days. Edgar Stoesz, Chester Raber (Contributor) / Paperback / Published 1997 $9.95

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