Creating and building a non-profit organization is not a simple exercise. There are more than 54,000 non-profit organizations in Illinois, and they come in all shapes and sizes. As one of Illinois top non-profit law firms, John C. Provenza & Associates, P.C. knows what successful non-profit organizations do to ensure that they are meeting their objectives. Here are five of the best practices that Illinois non-profits use to allow them to do the most good for our citizens.
1. Be sure that your nonprofit organization’s mission is clear
Whether you intend to educate Illinois citizens about a particular issue or you are looking to raise funds to support a cause, be sure that the mission of your organization is explicitly stated. The public good that your non-profit seeks to perform should be defined so that its goal is clear, even to the casual observer. Not having a clear focus for your organization can cost you support and detract from the value that you can add to the community. Whatever your non-profit’s mission is, it should be approved by the governing body—everyone should be on the same page.
In addition to having clarity of purpose, your non-profit organization should strive for transparency as well. Your non-profit should have a solid communications plan that adequately informs the public about your mission, work, and values. Additionally, requests for information from the public or press about your organization’s finances, policies, and activities should be answered quickly and in a forthright manner. All of these matters should be covered in a comprehensive set of by-laws and your non-profit’s articles of incorporation. Having an experienced Illinois non-profit law firm like John C. Provenza & Associates, P.C. to help you define your mission is critical to your non-profit being successful in its work.
2. Your nonprofit’s governing body should have clear roles, responsibilities, and tenure—and it needs to work effectively
Leadership begins at the top. The body that governs the activities of your non-profit organization should not be just a figurehead—it should be an actively involved part of your non-profit’s structure. The governing body sets your organization’s mission, values, and budget, and they should regularly assess the non-profit to ensure that the activities that are being performed are in line with well-defined goals. The success or failure of your non-profit depends on the quality of its governance; getting the advice of an experienced Illinois non-profit attorney like John C. Provenza will ensure that you build a leadership structure that works for you.
Since the role of your non-profit organization’s governing body is so crucial, it is essential that the members of that body are knowledgeable and diverse. While it is vital to make sure that each member of the governing body has the right mix of education and experience to help your organization to achieve its goals, having a diversity of viewpoints will help your group to remain receptive to new ideas and opportunities to serve the people of Illinois. Since running a non-profit organization involves multiple skillsets, having people on the governing body that possess different backgrounds—leadership, finance, data analysis, communication, technology, and more—will increase the effectiveness of your organization.
3. Know and follow all federal, state, and local laws and regulations. Make fiduciary responsibility and ethical behavior cultural value
There are plenty of rules and regulations that nonprofits need to follow in Illinois, and your organization will be accountable to the federal government as well. You can expect to have to file paperwork with the IRS, the Illinois Department of Revenue, and obtain business licenses or permits from local municipalities. If your non-profit organization intends to have paid employees, you’ll have to deal with U.S. Immigration and Customs Enforcement, the Illinois Department of Labor, and the Illinois Department of Employment Security. If this mishmash of regulatory bodies makes your head swim, you aren’t alone—running afoul of the rules is easy to do. Getting the right advice from a non-profit law firm like John C. Provenza & Associates, P.C. will help your governing body ensure that your organization operates legally.
It should be understood by your non-profit ’s governing body that they are entirely responsible for every element of the organization: Administrative expenditures, purchasing, accepting gifts, fundraising, endowments, and the work that is done—your governing body should have their finger on the pulse of it all.
4. Your nonprofit’s governing body should set financial policies for the organization, and actively ensure that resources are used appropriately.
Every year, your organization should have not only have a budget that is approved by your board of governors, but it should assess the previous year’s performance and budget accuracy as well. In addition to ensuring that the money being spent by your non-profit is both necessary and reasonable, it is crucial that your leadership creates policies that set forth the minimum sufficient monetary reserves for the organization. To accomplish any of this, you’ll need to ensure that your non-profit maintains accurate financial records, so make sure that procedures are in place to account for every dollar. Having an outside accounting firm or a law firm like John C. Provenza & Associates, P.C. check your accuracy can go a long way towards engendering public trust. Your organization will have to file accurate financial reporting forms and tax returns as well; this is another area where an Illinois non-profit attorney like John C. Provenza can help.
5. Your nonprofit should maintain fundraising and solicitation policies that advance your goals, reflect your values, and respect the law.
To do public good, your non-profit will most likely have to solicit donations and raise funds. The methods that you use to do so have to reflect your goals and values—and you’ll need to be sure that you provide training and guidance to your employees and volunteers about the rules you expect them to follow. In every case, your fundraising should not be coercive or intimidating, nor should the people you solicit be made to feel harassed. It is a good idea to ensure that your fundraising activities follow established professional standards—producing a simple “donor’s bill of rights” is an excellent way to increase the public’s level of comfort with your organization. If you make promises regarding how any funds raised will be used, make sure that your non-profit organization follows through on those promises. However you chose to raise cash for your organization’s work, be sure that your fundraising staff (internal or external) is not receiving compensation in the form of a commission or percentage of the funds that they raise.
Fundraising can create some interesting dilemmas involving the law, conflict of interest, and tax reporting requirements. These are all areas in which non-profits from around Illinois seek the advice of a leading law firm like John C. Provenza and Associates, P.C.
One more thing: Get the very best advice
Running an effective non-profit organization of any size is a complex undertaking that demands the highest degree of care. If you want to do the most good for your cause, make sure that you consult a leading Illinois non-profit attorney. John C. Provenza has years of experience navigating the complex legal landscape surrounding non-profit issues. Call our firm today at (847) 729-3939 or contact us via our website.
