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What do you wish you had known before starting a non-profit?

I've been accepted into a graduate program where I will learn how to start a non-profit arts company. I would love some advice from people who have started their non-profit, whether it's in the arts or another field. nonprofits performing-arts fine-arts art

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Eva’s Answer

There are many steps in setting up a non-profit organization. You need to register the non-profit with the IRS as well as with your state government. In NY state, it is the Charities Bureau in the Attorney General's office. Getting your organization's not-for-profit status can take up to two years. So, give yourself plenty of time. During the period in which you are waiting for your IRS tax-exempt status number and paper, you cannot provide donors with a tax-deductible contribution with their gift. And, many foundations and government agencies want to see that your not-for-profit organization has been operating and producing services/programs for a couple of years before they'll take a risk on funding you - need to see your track record.

The set-up a not-for-profit you need to establish a board of directors (usually it's a minimum of 3 people but the number is set by the charities bureau in your state and the organizational by-laws and "Articles of Incorporation" you create. Most small arts organizations have boards in the range of 8-10 members. But the more board members you have, the more people to work on giving donations to you and soliciting other people (their friends and colleagues) to donate to your cause. At the same time, a board of directors sets policy and oversees the organization's executive director, so they have a lot of say in how the organization is run. And they are fiscally responsible for the organization, which means that they can be sued personally if the organization doesn't pay it's taxes or if someone gets hurt on your property and sues.

The best way to learn all of the benefits and pitfalls of setting up a not-for-profit is to use the resources of The Foundation Center. They have an extensive library of information for not-for-profits and it is free of charge (although a few of their extremely valuable workshops are a nominal charge). There are "Foundation Center"s in most of the major cities across the country. And, it is the place to do funding research, too, as they have the largest database of foundations and corporations giving to charity in the country.

I've set up a few not-for-profit arts organizations, and have worked in the not-for-profit arts field for 40 years - and I can say it is greatly rewarding. Hard work, but rewarding. Set it up correctly from the start, pull together a really good board of directors who have resources to donate and have a circle of friends who also have resources to donate, and you'll be on your way!



Eva recommends the following next steps:

Look up The Foundation Center and visit them, becoming familiar with all of their resources including books, articles, workshops, etc.
Look up the charities bureau in your state and become familiar with what they require. You will need a state charities registration number as a not-for-profit.
Look up the IRS website's charities/not-for-profit (nonprofit) rules and regulations, and instructions on how to register as a not for profit and secure your IRS tax exempt status letter and registration number (usually called the "EIN number").
Interview some medium-sized not for profit organizations in the field you are interested in (the arts, environment, social services, etc.) - meet with their Executive Director in an "informational interview" to learn about how they started their organization, what lessons they've learned over the past few years that would be good to know in setting up your not for profit and running it, etc.
Identify a good tax attorney to help with the paperwork these agencies will need from you - and for using this attorney for future matters. You could put one on your board, if he/she is willing, so they wouldn't charge you for the work and can be there to govern through the first few years.
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Laura Rose’s Answer

I don't know much about the art world, but you should know that a large portion of your time will be spent raising money!! No matter how small your organization is, it's important to have one employee who's sole responsibility is fundraising. Unless of course, you have some way (one) to endow your organization for the future... Non-profits are hard work. Good luck!

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