Starting a Nonprofit: What You Need to Know

Want to start a nonprofit organization? Want to operate your organization more effectively?

In the spring of 2005, the students in the Law of Nonprofit Organizations class at the University of Richmond created a manual on how to start a nonprofit organization. One of the goals in creating the manual was to make it available to individuals interested in starting nonprofits or in learning about the legal issues relating to nonprofit organizations. It is our hope that this manual will assist individuals in establishing nonprofit organizations to address important societal needs and in operating those organizations most effectively. We welcome comments or suggestions on the manual and its utility.

The class professors were Ann C. Hodges, professor of law, and Phyllis C. Katz, adjunct professor of law. The manual was written by the students whose names are set forth at the beginning of the full document and edited by two of the students, Kristi Cahoon and Rebecca Adams.

The manual is divided into five chapters. You can access each chapter directly or you can access the entire manual via the links at right. At the beginning of each chapter is a checklist which will be useful to users of the chapter. There is also a very short form version of the manual for those who need a quick overview of the significant issues. The manual also contains an appendix with sample forms and examples of the concepts discussed in the text. For example, the appendix contains sample bylaws and a sample needs assessment. The prototype used for the appendix examples was creation of a nonprofit organization in Roanoke, Virginia to assist cancer patients with the non-medical burdens that accompany a cancer diagnosis. The appendix can be accessed separately in whole or using links in the chapters. To the extent that state law is involved, the manual utilizes Virginia law. If you are operating in a different state, the law may be different. Before using any portion of the manual, please read the disclaimer. The manual is not intended to provide or substitute for legal advice and we do not guarantee its accuracy.

The Pension Protection Act of 2006 contains several provisions relating to charitable organizations which every nonprofit should be aware of. The Chicago law firm of Mosher & Associates, which represents many nonprofit organizations, has written about these new provisions in its newsletter. University of Richmond School of Law alumnus, Ryan Oberly, is an attorney at the firm. To access the newsletter, click here. The relevant article is at page 2.

Download the entire manual in PDF format or select individual chapters below.

Table of Contents

Chapter 1: BEFORE YOU BEGIN

  • Before you Begin: Needs Assessment and Market Analysis
  • Researching the community, discovering the community's needs, and making sure the community will sustain your organization.
Chapter 2: FORMING THE ORGANIZATION
  • Forming the Organization: The By-Laws and the Board
  • Determining your organization's structure
Chapter 3: 501(c)(3) STATUS AND FUNDRAISING ISSUES
  • Tax, Lobbying and Fundraising: Non-Profit Status and Start-up Funding
  • Applying for tax-exempt status and getting your organization off the ground.
Chapter 4: EMPLOYEES AND VOLUNTEERS
  • Operating the Organization: Staff, Employees and Volunteers
  • Running your non-profit: personnel issues.
Chapter 5: OPERATIONS AND GOVERNANCE
  • Organizational Governance: Organizational Actors and Legal Duties
  • Recognizing the legal obligations and duties of the non-profit's members
Appendices
  • Forming a Non-Profit, Applied Step-by-step analysis: Forming non-profit legal services agency for cancer patients and their families in Roanoke, Virginia.

Manual © 2006, Ann Hodges et al. These works are licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 2.5 License. To view a copy of this license, visit creativecommons.org/licenses/by-nc-nd/2.5/ or send a letter to Creative Commons, 543 Howard Street, 5th Floor, San Francisco, California, 94105, USA.

Faculty Initiatives
Disclaimer
The information contained in this manual is for general guidance on matters pertaining to the start-up and running of a nonprofit organization. The application and impact of laws can vary widely based on the specific states and situations involved. For the purposes of this manual, we have relied on the law of Virginia, so it is important to consider that other states may have different regulations or guidelines. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this manual.
The information in this manual is provided with the understanding that the authors are not responsible for rendering legal, accounting, tax, or other professional advice or services and there is no warranty or guarantee, either express or implied, regarding the completeness, accuracy, or currency of this information, nor its suitability for any particular purpose. As such, it should not be used as a substitute for consultation with professional legal, accounting, tax or other advisers. Before making any decision or taking any action, you should consult a legal professional.

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