Small Business Questions & Answers


Filed under Start Up

Ask About Not-For-Profits

by Doing Good | May 25, 2012

Subject :Business Entities and Not-for-Profits

Dear Toolkit,

I was recently appointed to a not-for-profit organization leadership post, and I want to run this group in a businesslike manner. Can you offer any tips?

Doing Good

Dear Doing Good,

Yours is but one of several recent requests for helpful hints for non-profiteers. For fundraising info, go to the National Society of Fund Raising Executives (NSFRE) at 1101 King St., Alexandria, VA 22314, or call them at 783-684-0410. This venerable institution is now known as the Association of Fundraising Professionals (AFP).

Books on every imaginable NFP topic can be found by simply going to and scrolling down their inventory list. Amazon can put you on a list to receive periodic notice of new publications on this topic, too.

Non-profit veteran Joan Sage (who has run both a product-oriented NFP, such as a community theater, and a service-oriented NFP, such as a Chamber of Commerce) strongly recommends the following book titles as being of great value:

  • Giving USA (Published annually by American Assn. of Fund Raising Council)
  • The Grass Roots Fundraising Book (Contemporary Books)
  • Corporate Giving Yellow Pages (Taft)
  • The Foundation Directory (from the Foundation Center)
  • Bibliography: Resources for Prospect Development 1996-97 (Bentz, Whaley, Flessner.)

And you may find that the Philanthropy Journal Online is also a wealth of interesting information.

Whether you operate by selling a product to the public such as theater tickets, or generate revenue by collecting dues for your services such as a Chamber of Commerce, maintaining a funding stream is essential. Outside sources are more often than not needed to supplement what you're able to generate internally.

Are you a wannabee NFP? If you've got a great cause and can assemble a dedicated and talented board of directors, go to your state government and find out what it takes to incorporate your group into a legal NFP entity.

Then tackle the federal requirements for becoming a tax-deductible entity, an animal fondly known as a 501(c)3. This unromantic designation doesn't sound like much, but since your potential donors will be able to deduct from their taxes whatever they may donate to you, your income stream will benefit in the long run. It's not easy to accomplish and you may need some lawyerly help, but it'll be well worth the effort.

I hope this bouquet of resources will help you to remain competitive, for NFPs certainly compete for dollars just the same as for-profit businesses. And I hope they will give you one or two ideas that will further your cause and increase the professionalism of your organization.