Chapter 3: Fundraising

To Non-Profit Or Not
The skatepark advocacy group might consider becoming a non-profit organization. This is no small task and requires some familiarity with small-business management. As a non-profit, your organization will be legally responsible to abide by laws that many advocates may not be aware of. For example, donating services to a non-profit organization is generally not tax-deductible, but donating cash or goods is. What’s the difference between goods and a service? Sometimes it can become unclear where the line is drawn. An illustrator, for example, executes a concept rendering (service) and delivers that drawing (product). Is the illustration a service or a product? When one forms a non-profit organization, questions like this cannot be avoided.

NON-PROFIT OR NOT NON-PROFIT?
The decision to incorporate as a non-profit organization, or 501(c)3, is a decision not to be taken lightly. Read here about the structure and non-profits to see if it's right for your group.

Another challenge is the accounting, bookkeeping, and legal filings required of all non-profit organizations. Non-profits are legally obligated to produce records of their finances. The format of these records is consistent with the type of non-profit one belongs to. Failure to file accurately and on-time can result in fines, a denial of the non-profit status, or expensive and time-consuming revisions to the organization. Managing a non-profit is not easy and will require discipline from all of the main advocates within the group. Large-scale failures, like faulty bookkeeping (which may be perceived rightly or wrongly as embezzlement) can even lead to legal action.

If the subtleties and bureaucracy of becoming a non-profit do not dissuade you, it may be a good idea to organize as one. The legitimacy it carries among a community is much greater than being simply an organization with the non-profit activities being managed by another entity (a community foundation or the Parks Department, for example).