Continuing our series on nonprofit formation… we know why we are starting a nonprofit; we thought through whether we needed a new nonprofit, we decided how to structure the relationship to our for-profit entity; now... we form it.

This post will tackle the Articles of Incorporation, specifically for a California nonprofit public benefit corporation, using our new entity for organizations targeted for their DEI work as an example.  A document that is usually no longer than a page or so, many people do not realize that they are making a number of important choices when they file their Articles of Incorporation.  Choices that are not always easily unwound.

Let's walk through those together.

Continuing our blog’s series walking through how to launch a non-profit, we have already talked about what activated us to want to start a nonprofit  and whether it actually makes sense to start one – now, we’re going to start… with a detour (yes, this series is going to take a long time).

Like many people that come to us to form a nonprofit, we are not starting our plan from a blank canvas.  We have a for-profit law firm whose work could potentially overlap in personnel and subject matter with the 501(c)(3) nonprofit’s plan to provide legal and educational support to progressive charities targeted for their DEI efforts and social justice work.  We have a 501(c)(4) nonprofit that we use to carry out the charitable and advocacy missions of our employees – and the 501(c)(4) is allowed to do things that a 501(c)(3) is not. 

How do we make sure the 501(c)(3) nonprofit remains compliant and operates without integrity, while still leveraging support from our existing structure?

If you have or have considered a for-profit/non-profit affiliate relationship, this post is intended to illustrate how we work that question with clients (and ourselves). 

Following up on our last post, and with our firm continuing to feel frustrated about how we’re supposed to help, we started kicking around an idea.  If we think nonprofits should be open and defiant about their support of diversity, equity, and inclusion and if we think philanthropy should be putting up their resources to defend those that do, why not set up a nonprofit to gather and provide that support?   Provide our own expertise in terms of defending the exempt status of progressive organizations that are targeted, gather volunteers or use donations to hire experts to help with the things we have no business doing ourselves (immigration, civil rights litigation, criminal defense), and educate organizations in a way that pushes back on the fear campaign.

As transactional attorneys, we are not as useful as we’d sometimes like to be when it comes to times like these.  No one makes movies about tax lawyers, and they really shouldn’t.  The lawyers doing the most important work right now, and always, are the ones trying to keep people safe and out of cages.   

So, we’ll just have to settle for one of the handful of things we know how to do, which is set up a nonprofit.  And maybe we can help make it a little more meaningful by making it an educational exercise – using this blog to discuss and share documents for each step in the process in case people want to try it themselves.

Before committing to actually setting it up though, let’s ask the question that we try to get all of our prospective-charity-founder clients to ask:  is a new charity actually necessary?