Nonprofits come in a wide range of types—educational, religious, animal rescue/welfare, housing development, social services agencies, among others. Each organization has a specific group they serve that isn’t being helped elsewhere. What they all have in common is the desire to help others for the betterment of the community.
In addition to offering a unique community service, any nonprofit organization has a myriad of administrative and legal work that must be taken care of in order for it to function legally in Illinois.
What A Nonprofit Attorney Does
Much like a business attorney for small to large businesses, a nonprofit attorney handles many of the same issues that are specific to nonprofits. A nonprofit attorney can help when you’re just starting, including filing the necessary paperwork, filing annual tax returns, getting the organization’s tax exemption, or handle any litigation.
Nonprofits in Illinois have their own requirements to deal with that business attorneys may not be familiar with. Attorneys who handle nonprofits know and understand the rules and regulations, and can make sure that the organization runs well.
Nonprofit Legal Matters
Starting a 501(c)(3) nonprofit is a challenge with a lot of moving parts. It’s highly complicated, and it’s easy to make a mistake that can cause legal problems before the doors even open.
Unfortunately, the conundrum is that most individuals who have the desire to start an Illinois nonprofit do not have the legal and business expertise to take care of the necessary tasks. Matters such as annual state and federal filings, tax returns, as well as filing forms for nonprofit tax-exempt status are important to keep the nonprofit in line with the law.
Failing to file any of these important forms—or filing them incorrectly—can cause serious problems for everyone involved. Having a nonprofit attorney on board ensures that the nonprofit gets off on the right foot and avoids noncompliance.
Working With A Nonprofit Attorney
Having an attorney to guide your nonprofit can help your organization with issues such as:
- Tax exemptions: real estate, income and sales tax
- Board of directors
- Structure and formation
- Branding protection—the name, logo and marketing of the nonprofit
- Contract negotiations
- Employees—hiring and firing
- Revenue creation and funding sources
- Closing the nonprofit
You’ll be able to make sure your nonprofit will run smoothly with few obstacles.
Mistakes Many Nonprofit Startups Make
If you’re still in the planning stages of a nonprofit, here are some things you can avoid to make sure your startup works well:
- Bad planning and research. In the enthusiasm to start giving back to the community, many founders fail to realize that a nonprofit is still a business. A business plan should include the types of services that will be offered and the target market, funding sources, an assessment of need, and an assessment of the competitive environment.
- No funding plan. Most founders don’t realize what it takes and costs to get started, nor do they understand where to find funding sources. A funding plan is right behind a business plan in terms of importance. Deciding what to charge, who to charge, and a good system for financial records are the start of the financial knowledge needed to not only start the nonprofit but to keep it running.
- Assuming that starting a nonprofit is easy. It isn’t, and a desire to help simply isn’t enough. The nonprofit incorporates on the state level, and then applies for IRS tax-exempt status. Both of these have a number of steps involved. Founders must be realistic when beginning a nonprofit and must be in it for the long haul.
- Not taking the board seriously. This is one area where your nonprofit could soar or sink. An effective board should have contacts, believe in your mission, and have the influence to sell it to others. Board members should also have resources and influence, and be able to help the nonprofit thrive.
A nonprofit attorney can guide your startup through the necessary steps of incorporating the nonprofit and stay in legal compliance.
Get Help With Your Nonprofit’s Filings And Other Necessary Legal Matters
We have over 20 years of experience helping nonprofit startups in the Chicago area with all of their legal matters. Along with comprehensive knowledge of Illinois nonprofit law as well as best practices for growing nonprofits, Attorney James C. Provenza can ensure that all of your legal requirements are done correctly. Contact our office at (847) 729-3939 today, or use our online contact form. We look forward to helping ensure that your organization is successful.