Passion Turned Profession · Book VIII · Law and compliance
Keeping Your Nonprofit’s 501c3 Status
You have been fundraising illegally in four states for two years. So has nearly everybody you know.
14 chapters · 128 pages
What it is
Very little in this book concerns wrongdoing. It concerns obligations that arrive without notice, are missed by competent people, and become expensive at a moment chosen by someone else.
Charitable solicitation registration, which few organizations complete correctly. Operating in a second state, which is rarely a decision: a volunteer moves, a partner opens a site, and the obligation follows. Insurance, and the coverage most small organizations lack while paying for coverage they do not need. And the agreements you will sign in the first five years, against the small number you will read.
Then lobbying and advocacy, where the belief that a charity cannot lobby has cost the sector more than the rule itself. The single prohibition with no permitted side. Unrelated business income. Conflicts of interest in practice, and the tax that attaches to them. The two policies organizations write only once they are needed. The personal information you hold, which is more sensitive than most businesses of comparable size hold and is usually stored without protection. Government funding and its conditions. Fiscal sponsorship in both directions. And the four situations in which counsel is not optional.
An obligation nobody enforces is still an obligation, and the year somebody looks is never the year you were ready. Book VIII · Keeping Your Nonprofit’s 501c3 Status
What this book assumes
That the organization is operating. It states no figure subject to change.
Every chapter
14 chapters, and what each one does.
Every chapter, with the sentence it opens on.
- 01
The Registration Almost Nobody Does Correctly
You have been fundraising illegally in four states for two years. So has nearly everybody you know.
- 02
When You Are Operating in Another State
Nobody decided to expand. A volunteer moved, and a partner opened a site, and now there are two states.
- 03
Insurance, and What You Are Being Upsold
You are underinsured in one specific way and overinsured in two others, and your broker has never asked what you actually do.
- 04
The Contracts You Will Sign
You will sign perhaps forty agreements in your first five years, and you will read three of them.
- 05
Lobbying, Advocacy, and the Line Between Them
You have been told your organization cannot lobby. Whoever told you that was wrong, and the belief has cost the sector more than the rule ever did.
- 06
The One Rule With Nothing on the Other Side of It
Everything else in this book is a matter of degree. This is not.
- 07
When Your Revenue Is Taxable
Tax-exempt does not mean tax-free, and the line is drawn somewhere most founders have never looked.
- 08
Conflicts of Interest, in Practice
Book Seven told you to disclose and step back. This chapter is what happens if you do not, and it has a tax attached.
- 09
The Two Policies Nobody Writes Until They Need Them
One of them protects the person who tells you something is wrong. The other decides what still exists when somebody asks.
- 10
The Information You Hold About People
You are holding more sensitive information than a business your size, you obtained it from people with less power than your donors, and it is on a shared drive.
- 11
Government Money, and What Comes With It
It is the largest cheque you will be offered and the only one that arrives with a rulebook attached.
- 12
Fiscal Sponsorship, Both Directions
Somebody is going to ask you to hold money for them. Before you say yes, understand that it becomes your money and your problem.
- 13
Your Name, Your Curriculum, Your Photographs
Three of the most valuable things your organization has were created by people who still own them.
- 14
When to Call a Lawyer, and What to Have Ready
You cannot afford to run everything past counsel. You also cannot afford the four situations in this chapter.
Two more lines from inside
From the manuscript.
A contract is not a description of the relationship you have. It is a description of what happens on the worst day of it.
Book VIII · Keeping Your Nonprofit’s 501c3 Status
The people whose data you hold most sensitively are the people with the least power to complain about how you hold it. That asymmetry is the entire reason to be careful.
Book VIII · Keeping Your Nonprofit’s 501c3 Status
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What this book assumes
That the organization is operating. It states no figure subject to change.
Each subject is treated once, in the book that owns it. Where an answer belongs elsewhere, you are given the chapter reference.
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