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finkelitis's avatar

Should I form a nonprofit?

Asked by finkelitis (1907points) April 20th, 2011

I have a sole proprietorship, but my motivating goal isn’t really profit; it’s to create a certain kind of educational and cultural influence. I’m thinking about incorporating in to a nonprofit, but I don’t really understand the pros and cons, besides affecting perception of my intent. I can still charge speaking/teaching fees as a nonprofit, though (right?), and I’m not sure I actually want to deal with applying for grants. Are there other issues involved here I should know about?

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2 Answers

marinelife's avatar

You really have to look at your goals. If you are a non-profit, all of the proceeds that you take in minus expenses should go back into your endeavor. Also, being a non-profit requires certain auditing and accounting practices that are subject to review by the state (rules vary from state to state). You might have to have a board, etc.

If you have, for example, an S corporation, you (and any partners) would split all of the proceeds after expenses.

auntydeb's avatar

Hi @finkelitis – I don’t know much about forming such a company in the US, if that’s where you are. Here in the UK, there are many such ventures. I used to be a director with a small ‘not-for-profit’ enterprise, involved in ecology and education. There were no profits anyway! But it was a deeply satisfying venture and although I have not been with the company for several years, the legacy of the work they have done lives on as a library of environmental information and access to ideas for sustainable living.

It sounds as though you need to do some intensive research. Do some googling, look into other enterprises and see what they have done. Any business takes energy to run, if you have it and are really keen to share your expertise in this way, I must applaud your intent.

Be assured, ‘non-profit’ or ‘not-for-profit’, does not mean ‘without means’! You can be paid, properly, at the going rate for your position and others you employ must be too. Take a look around, see if anyone trading near to you runs their business this way. You can’t beat personal experience. I won’t put web links, as my only knowledge is UK based, but there are plenty of resources out there. Good Luck!

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