Committing time, money and effort towards a larger mission and purpose are among the most honorable efforts people can make. To care about something bigger than themselves, and working to make good change in the world is awesome. I bet anyone reading this is one of those people. You care and are willing to back that up with tangible determination.
In the US, our society acknowledges that effort with a special status, that of being a nonprofit; in other words, not having to pay taxes on the money raised and providing a tax deduction to donors. But there is some hard reality that goes along with this recognition of a nonprofit status.
One: The Reality of Paperwork and Filing of Paperwork
No matter how noble your cause, the IRS, your state Attorney General and local franchise tax board want to see details about what you raise and how you spend it. The IRS application, the 1023, is a small monster of detail all by itself, and once you have jumped through those hoops, more reporting will be expected.
This reporting includes payroll tax information, insurance policies, state registrations, donation acknowledgements, the 990, and the list goes on. As attractive as it may be to ignore or put off these tasks as less urgent than delivering your mission, avoiding them will provide heartache sooner or later.
A solution is to organize and calendar when each of these requirements will be due on a master annual calendar so no one is caught off guard at the last minute. Annual audits and reviews will require preparation; policy premiums will have to be calculated into accounts payable as will dues and subscriptions.
Failure to address these requirements may seem little at first, but can come back and wallop you. Failure to pay sales or payroll taxes can come with a nasty penalty, and ignoring informational filings can cost the business its license to operate.
Two: You ALWAYS need to Fundraise
There seems to be an irony to those who want to DO so much find themselves always looking for funding. Of course I would rather teach a child to read, or clean a river or feed the hungry, but without the funds to obtain the book, collect the trash or distribute food, nothing can happen.
Informing people about what you do, and who you are doing it for requires time, material and some expertise. None of this is free. Even with an all-volunteer staff, operating expenses exist and growth and success require financial investments. Many donors are reluctant to support operating expenses, but without them, nothing will be accomplished.
Set up year round development programs, and multiple streams for income. Budget thoroughly and realistically, and stay on top of the actual versus planned budget. Don’t come to rely on a regular generous donor, or end of the year holiday letter.
Resource development must be on the radar at all times and in all departments. No, you don’t have to see yourselves as a money-making machine and I am reluctant to invoke the ‘culture of philanthropy’ phrase ( the poor thing has been so misused) but it is true.
BUT! these realities don’t have to be ugly. Knowing that the 20% of time you get to do the work you love and care about will more than make up for the 80% you do stuff you don’t like is a huge help. This is the kind of work that Lauren Assoc does happily and well, let us help you love your work a little more.