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| Re: incubating new non profits - fees for host organiz
Posted by Tony Poderis  on 12/9/2007, 11:06 am, in reply to "incubating new non profits - fees for host organiz"
VIP Poster
Holly: Non-profit organizational complexities are not what I know how to explain with ease or with assurance. But, I do think it’s always best to consult with a non-profit-skilled attorney, in conjunction with strict adherence to your Mission Statement and to ensure you keep true to your Articles of Incorporation as you seek to give money to other organizations.
And as you may be moving into being a granting foundation, there are unique and applicable laws to observe than when you give your money directly to clients/users to fill a defined and justified public need.
--- Foundation Center
Foundations Tutorial: What is a foundation?
http://foundationcenter.org/getstarted/tutorials/ft_tutorial/what.html
When you plan to give money to organizations which are not yet non-profit, would it be best for you to be a “Fiscal Sponsor?” LIke organizations, not having non-profit status, work well under such “umbrellas” as yours could be---providing that the respective missions are similar. Contracts, fees, administrative work, etc., can perhaps be learned from existing, experienced, Fiscal Sponsors and Fiscal Sponsor resources:
http://foundationcenter.org/getstarted/tutorials/fiscal/
http://www.cfnpe.org/site.cfm/fiscal-sponsorship.cfm
http://www.ctaconline.org/fiscal.asp
Considering the organizations you wish to support in the ways described, would you think that the best service you could provide would be in the form of “Technical Assistance” grants to established non-profits? That way, the organizations, using your funds, could themselves hire competent, experienced, and capable consultants for the particular skills they could offer to support any component inherent in a “Capacity Building” program. The advantages of you giving money in that way are far greater and much more efficient for you. You need only to monitor the consultant/non-profit association.
Plus, maybe just a bit of semantics at work, but your subject line referred to being an "Incubator." I could be wrong, but I have seen many such non-profit Incubator organizations, and none of them gave money. They provided training, instruction, and encouragement to businesses to get them up and running.
Still, in my cautious, though inexperienced way, I would want to be absolutely certain that, in this situation, your organization:
--- does not stray from its Mission or Articles of Incorporation as it funds/supports what other organizations do.
--- meets the rules and regulations of your state and those of the IRS.
--- takes care that the organizations springing up, perhaps encouraged by your possible grants, will not be duplicating efforts, with the result you have a number of organizations doing the same things in the same service area.
--- that your own donors, expecting their money to be spent directly on the services you provide, will know of, and accept, that you are giving away their money to other organizations---especially organizations unknown to them. It’s possible that this one could give you real problems.
Just a few of my random and instinctive reactions to your noble effort. Good, well-intentioned acts, can sometimes lead to serious conflicts. Take care that you do not jeopardize your own non-profit status.
Consult with a non-profit-experiened attorney. Speaking for me, of course, you should not take away what may be unintended organizational legal advice from a non-profit fund-raising discussion board.
Regards,
Tony
Tony Poderis
http://www.raise-funds.com
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