Doing Business in DC | Starting a Nonprofit | Starting and Operating a Nonprofit in DC


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June 13th, 2012: WDCEP hosted its monthly DoingBusiness2.0 speaker series. This edition focused on starting a nonprofit in DC. George Constantine, a partner at Venable LLP that counsels tax-exempt charities, trade associations, professional societies, and labor organizations, lays the groundwork to starting a nonprofit in DC.

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Doing Business in DC | Starting a Nonprofit | Starting and Operating a Nonprofit in DC

  1. 1. Doing Business 2.0—Starting and Operatinga Nonprofit in DCGeorge E. Constantine, III, Esq., PartnerVenable, LLP, Washington, DC(202)
  2. 2. George E. Constantine, III, Esq. Counsel to tax-exempt charities, trade associations, professional societies, labor organizations Former Staff Counsel for the American Society of Association Executives Concentrates practice on tax-exemption matters, contracts, election law, corporate governance and other issues affecting tax- exempt, nonprofit corporations.
  3. 3. Forming a Nonprofit—PreliminarySteps Establish mission and goals Survey the landscape—are there other organizations pursuing similar mission and goals? Assess likelihood of funding, dedicated volunteer resources, etc.
  4. 4. Forming a Nonprofit—Legal Requirements Articles of Incorporation  Name (doesn’t need an “Inc.” or similar signifier in DC)  Purposes  Name and street address of incorporators  Members or not? Classes?  List of initial directors (at least 3, can get by without listing them)  Designated body?
  5. 5. Forming a Nonprofit—Legal Requirements Articles of Incorporation (continued)  Registered office and registered agent in DC  501(c)(3) dissolution and purposes language  Indemnifying directors and limitations of liability
  6. 6. Forming a Nonprofit—Legal Requirements File Articles with DCRA (three incorporators, notarized signatures) Draft Bylaws  More detailed than Articles of Incorporation  Should include discussion of Board of Directors, Committees (if applicable), Members (if applicable), indemnification, etc. Organizational resolutions—approving Bylaws, authorizing establishment of bank accounts, naming corporate officers (at least a President, Secretary and Treasurer)
  7. 7. Forming a Nonprofit—Legal Requirements Tax Forms  Federal Exemption application—Form 1023 for 501(c)(3); Form 1024 for most other types of exempt organizations  DC Exemption—Form 164  501(c)(3) organizations can obtain exemption recognition for franchise (income) tax, sales and use tax, personal property tax  Applicable as of date of IRS recognition
  8. 8. Charitable Solicitation Charitable Solicitation License  Occupancy certification  Good standing as a corporation  Tax registration FR500  Clean Hands certification  Basic Business License Application  Articles of Incorporation, Bylaws, Uniform Registration Statement, other documents
  9. 9. Other Considerations Operating, fundraising in other states? Trademark registration URL reservation Lobbying registration Affiliated entities? Insurance coverage (note minimum levels of $200K for individual claim and $500K for total claims in order to benefit from volunteer immunity provisions)
  10. 10. Basics on Nonprofit CorporationLegal Issues Hierarchy of Authority  State Nonprofit Corporation Law (statute and common law)  Articles of Incorporation  Bylaws  Board Policies and Procedures  Unwritten Common Practices
  11. 11. Basics on Nonprofit CorporationLegal Issues Governance Structure  Board of directors  Executive committee  Other committees of the board (nominating, finance)  Members  Other committees  Staff
  12. 12. Corporate Governance Fiduciary Duties  Care  Loyalty  Obedience
  13. 13. 501(C)(3) Issues Public benefit requirement—charitable, educational, advancement of health, etc.  No substantial private benefit  No private inurement Political activities Lobbying UBIT
  14. 14. 501(C)(3) Issues Form 990  Once a year (May 15 deadline for calendar year filers)  990-N—even very small organizations have to do it  Automatic revocation Publicly available information
  15. 15. Questions?
  16. 16. Contact InformationGeorge E. Constantine, IIIPartnerVenable LLP575 7th Street, NWWashington, DC 20004-1601Phone: 202-344-4790Fax: 202-344-8300Email: