It is important for non profit organizations, both those just starting out and those which are well established, to have a diversified stream of income. By diversifying where your revenue is coming from, your non profit organization will be less dependent on each revenue source. The more diverse your organization is the better it will be able to withstand changes in funding.

Grants, for example, are a great way for non profit organizations to generate the revenue which they need to operate. However, if an organization is relying too heavily on grants and their grant funding gets pulled or reduced, the organization may struggle trying to make up for that loss of funding in other ways. It is better to be prepared by having additional fundraising initiatives, and soliciting donations in addition to applying for grants.

The need for multiple sources of funding has become even more important with the recent decline in the American economy. As bank accounts continue to shrink; individuals, organizations and foundations are becoming more selective over which organizations they are making contributions to. This is creating more competition between organizations for the resources available. The organizations which are best equipped to deal with this competition are those which are the most diverse in their revenue sources and the least reliant on one single source.

Organizations should look at fundraising efforts also as a way of marketing and getting your name out into the community in addition to means of generating revenue for your organization. Fundraising events, while they may not always create a large amount of income for an organization, cannot always be measured by the amount of money they generate at that event. This is due to the possibility of future donations and contributions based on the relationship which may have been established at one of these events. Additionally, hiring a professional fundraiser can be a smart move for event the youngest of non profit organizations.  Not only does a professional fundraiser have experience working a variety of different events, a professional fundraiser knows how to make connections and secure sponsorships.

Even non profit organizations which have been successful over a period of time using one revenue source should consider working to find new untapped sources of income. This will strengthen any organization and all organizations will welcome more income; as more income allows the organization more freedom in working towards accomplishing their mission and fulfilling their goal.

Want to learn more about the do’s and don’t of fundraising effectively? Check out CharityNet USA’s short video “The 8 Truths of Fundraising” .

Have you ever dreamed of spreading your mission & helping others? You’re not alone!  Many people find themselves interested in starting their own non profit but are unsure where to begin.

Starting a non profit can be fulfilling and rewarding but requires a great deal of preparation.  There are many important decisions to make and many rules and procedures that must be addressed to build a solid foundation for growth.  Additionally, if your organization is interested in filing for the coveted 501c3 status, there are specific items that must be addressed before hand.

We invite you to spend some invaluable time with CharityNet USA and get familiar with the ABC’s that will help you plan, prepare, and manage your non profit organization.

Topics of Interest:

• Bylaws
• Articles of Incorporation
• Board Development
• Conflict’s of Interest

Learn how to prepare your non profit organization for success by attending either our seminar or webinar!

The event will take place on Thursday, April 15, 2010.

For all of you Florida residents near the Orlando area, a seminar will be hosted in our office from 10:00 a.m. – 11:30 a.m.  Our office is located at 2151 Consulate Dr. suite 5, Orlando, FL 32837

For the rest of you out there, we have a webinar version available that will run from 3:00 p.m. – 4:00 p.m. (EST)

Although the IRS does have very specific requirements for what can and what cannot be done. In regards to lobbying, these requirements should not deter your organization from applying for 501c3 tax exempt status if you believe that lobbying would further your mission and exempt purpose. A non profit organization with 501c3 status can engage in lobbying and in many instances, should engage in lobbying.  I am writing this article, not as an exhaustive discussion on 501c3 organizations and lobbying, but to help you decide if you should still apply for tax exempt status if you want to engage in lobbying.

Political activities and legislative activities (commonly referred to as lobbying) are two different things and are subject to two different sets of rules. But hopefully this will point you in the right direction:

Political activities are almost all prohibited by the IRS. These types of activities would include: directly or indirectly campaigning for (or against) a political candidate who is elected to public office, contributing to a political campaign, or making any type of statement for (or against) a political candidate. This type of activity can result in your 501c3 status being denied or revoked.

Legislative Activities* may also cause your 501c3 status to be denied or revoked if it makes up a substantial part of your activities. Your organization cannot be formed for the sole purpose of influencing legislation, but in many cases it may be critical to furthering the mission of your organization. If this is the case, you should not necessarily shy away from applying for 501c3 status, but you will need to be careful to follow IRS guidelines. The keyword above is “substantial.”

Now aside from involving your organization in issues of public policy through educational meetings and distributing educational materials relating to a current issue, which is allowed; how can your organization work with legislative bodies to accomplish your mission?

Well, let’s take a look at an example. One of my favorite non profit organizations, International Justice Mission (IJM), works to “secure justice for victims of slavery, sexual exploitation and other forms of violent oppression.” Now IJM’s main activity is to provide support to individuals who have been a victim of this type of injustice. However, IJM also organizes many Justice Campaigns with which they mobilize Americans to support U.S. policies to abolish sex trafficking and modern-day slavery. One of their current goals is to have Congress establish a trade policy to deny access to American markets for items that were produced by child or slave labor. IJM specifically targets policy-makers, aka legislators, to push for this reform. Staff from IJM meets with legislators and works to educate them along with voters. This activity is considered lobbying and it is being actively done by a 501c3 non profit organization.

This is just one of many organizations who participate in a form of lobbying to accomplish its mission. Now there are maximums that can be spent on lobbying by a 501c3 organization and your organization should file Form 5768 along with your initial 501c3 application. But if you are considering not applying for 501c3 status because you want to participate in lobbying, carefully look into the limitations, but remember it can be done. Remember, IJM’s goal through its lobbying activities is to influence policy-makers to “champion the rights of the poor and vulnerable,” which is their exempt purpose. Like in this example, if you feel lobbying is necessary to promote your exempt purpose, do not let that hinder your organization in applying for 501c3 tax exempt status.  Rather take a look at the specific rules and requirements and make an informed decision, you may be surprised at what you can do.

*Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive office), or by the public in referendum, ballot initiative, constitutional amendment, or similar procedure.  It does not include actions by executive, judicial, or administrative bodies. (IRS.gov)

It is important for non profit organizations, both those just starting out and those which are well established, to have a diversified stream of income. By diversifying where your revenue is coming from, your non profit organization will be less dependent on each revenue source. The more diverse your organization is the better it will be able to withstand changes in funding.

Grants, for example, are a great way for non profit organizations to generate the revenue which they need to operate. However, if an organization is relying too heavily on grants and their grant funding gets pulled or reduced, the organization may struggle trying to make up for that loss of funding in other ways. It is better to be prepared by having additional fundraising initiatives and soliciting donations in addition to applying for grants.

The need for multiple sources of funding has become even more important with the recent decline in the American economy. As bank accounts continue to shrink, individuals, organizations and foundations are becoming more selective over which organizations they are making contributions to. This is creating more competition between organizations for the resources available. The organizations which are best equipped to deal with this competition are those that are the most diverse in their revenue sources and the least reliant on one single source.

Organizations should look at fundraising efforts also as a way of marketing and getting your name out into the community in addition to generating revenue for your organization. Fundraising events, while they may not always create a large amount of income for an organization, cannot always be measured by the amount of money they generate at that event. This is due to the possibility of future donations and contributions based on the relationship which may have been established at one of these events. Additionally, hiring a professional fundraiser can be a smart move for even the youngest of non profit organizations.  Not only does a professional fundraiser have experience working a variety of different events, a professional fundraiser knows how to make connections and secure sponsorships.

Even non profit organizations which have been successful over a period of time using one revenue source should consider working to find new untapped sources of income. This will strengthen any organization and all organizations will welcome more income; as more income allows the organization more freedom in working towards accomplishing their mission and fulfilling their goal.

Want to learn more about the do’s and don’t of fundraising effectively? Check out CharityNet USA’s short video “The 8 Truths of Fundraising” .