Ask the Nonprofit Specialists

posted by Anne Byrne, Professional-in-Residence, ASU Lodestar Center

Question: I am starting a nonprofit organization, and I need to secure our 501(c)3 status. I don’t know how to fill Form 1023, the Application for Recognition of Exemption, from the IRS. Do I need an attorney to complete it? Can you help?

Questions about the application for 501(c)3 status or form 1023 are by far the most common I get in my role as a professional-in-residence at the ASU Lodestar Center. The instructions from the IRS are almost 40 pages and the form itself is 26 pages, so it is no wonder the task may feel overwhelming! Fortunately, there are resources available, and a clear perspective will help focus your efforts.

posted by Anne Byrne, Professional-in-Residence, ASU Lodestar Center

Question: My board of directors is not effective at raising funds to support our organization. Many members seem afraid of the issue and say things like “I will do anything but fundraise.” How do I get them involved?

Effectively engaging board members in fundraising is a very common challenge for nonprofit organizations. Many board members are unaware of their responsibilities to fundraise or feel inadequate in meeting the challenge. Others may have had bad experiences or have misconceptions about fundraising. While it can be difficult to engage board members in fundraising, there are a few steps that will help ease the way, build confidence and improve effectiveness.

posted by Anne Byrne, Professional-in-Residence, ASU Lodestar Center

The most frequent question posed on the ASU Lodestar Center's "Ask the Nonprofit Specialists" service is about how to start a nonprofit organization. Recent research by Civic Ventures suggests that there is strong interest and intention among "boomers" (individuals in their 40s, 50s, and 60s) to create jobs for themselves and others as entrepreneurs, making a positive social impact. More than 12 million aspiring entrepreneurs want to be "encore entrepreneurs," by starting a nonprofit or socially oriented business. There is also a growing trend of new nonprofits run by college students. According to Crain's New York Business, "The flood of 'postmillennials' creating their own nonprofits stems from two trends, experts say: a generational desire to do something meaningful and the quest for individualism."

"In a sea of bad economic news, it's heartening that millions of people with experience want to take matters in their own hands and launch their own ventures to meet social needs in their communities," said Marc Freedman, founder and CEO of Civic Ventures.

Mark Rosenman, in a blog post titled, "Calling All Boomers: Don't Start More Nonprofits," disagrees with the idea of creating new nonprofits, instead suggesting that "baby boomers shift their social commitment from an ill-advised and self-centered ambition to start a plethora of new enterprises and instead work together, and with others, to build the social, political and economic movement required today."