3 things more expensive than getting your own 501(c)3 - Generocity Philly

Funding

Aug. 29, 2016 3:01 pm

3 things more expensive than getting your own 501(c)3

The price of nonprofit incorporation just dropped. You should make the most of it.

There's an omelette out there that costs a grand — more than double what it costs to incorporate.

(Photo by Flickr user Great British Chefs Team used via a Creative Commons license)

Tivoni Devor’s “Getting Good Done” column focuses on new models of enacting impact.


It just got even cheaper to get your own 501(c)3.

It just got so cheap that everybody should probably get one. The cost to file a 1023-EZ — the federal form needed to get 501(c)3 tax-deductible status — just dropped from $400 to $275. Incorporating in the state of Pennsylvania is $125, according to the Department of State’s Bureau of Corporations and Charitable Organizations.

So, in Philly, $400 gets you a fully legit incorporated 501(c)3.

More Expensive Thing 1.) This intense Lord of the Rings collection costs $800.

It practically makes getting a 501(c)3 near disposable. That’s kinda great. Now, I’ve personally written a lot about how there are too many nonprofits out there, but at this price point, I’m tossing that out the window. 

For $400, just about anybody could buy a keg of beer, throw a house party and raise enough money to get their own 501(c)3. It opens up the ability for anyone with any idea to try it out.  Maybe you have a wacky impact idea and your ED doesn’t want you to do it under the existing 501(c)3. Maybe there is a niche problem in your neighborhood and no one else is doing anything about it. Now you can, via “legit” means, do something about it.

More Expensive Thing 2.) AMOREPACIFIC’s “Time Response” skin renewal cream sells for $450 at Nordstrom.

I predict this price drop will launch a wave of micro-nonprofits — organizations that can maybe raise a few hundred dollars a year to fund cleanups and block parties. If your nonprofit generates less than $50,000, you don’t need an audit, you don’t need to file the full 990 and there are almost no other required functional administrative expenses. You could and probably should buy directors and officers insurance, but it’s not required.

From our Partners

More Expensive Thing 3.) Some restaurant in New York has a lobster-and-caviar-filled omelette for $1,000.

Because of this price drop, we’ll be overrun with new nonprofits which will make funding even more competitive. But these cheap and EZ nonprofits are not going to start pulling in huge grants because most major foundations won’t give to startup orgs at this size and scale, which are capped at $50,000 in revenue a year (see page 11 of the IRS’s instructions form), won’t be able to provide three years of audited financials (because audits aren’t required of them) and won’t really be able to support more than a single full-time employee.

So, again, to incorporate, you need this $125 form from Pennsylvania, this $275 form from the IRS and an EIN number you can get free over the phone.

What are you waiting for?

Want more richly researched and deeply sourced community reporting?  Become a Generocity member for $10 per month -30-
LEAVE A COMMENT

From our Partners

If your small-but-mighty nonprofit needs to grow, consider pitching

These are Philadelphia’s 25 biggest nonprofits by income

9 takeaways from the Chamber’s speed pitching for nonprofits event

SPONSORED

Generocity Philly

During Tech in Action Day, all the participants teach and learn

Philadelphia, Pennsylvania

Arch Street Meeting House Preservation Trust

Executive Director

Apply Now
Philadelphia

CORA Services

Drug and Alcohol Counselor

Apply Now
2000 Hamilton Street, Suite 301, Philadelphia, PA 19130

Good Shepherd Mediation Program

Mediation Coordinator

Apply Now

Today is #GivingTuesday! Here are 60 local nonprofit campaigns for you to support

Who are you calling ‘vulnerable’?

Creating space for this vibrant, passionate community: A Q&A with Sandra Baldino

SPONSORED

Generocity Philly

ECS has been tackling Philly’s social issues for nearly 150 years. Now, its new focus is intergenerational poverty

Philadelphia, PA

United Way of Greater Philadelphia & Southern New Jersey

Private Philanthropy Officer, Leadership Giving & Women United

Apply Now

Sign-up for daily news updates from Generocity