Non-profit organizations fulfill a variety of state and national needs. Several noteworthy organizations are known for raising funds for charitable causes, helping others both domestically and abroad, raising public awareness and education, and promoting civic participation in local and national matters. Federal and state governments work hard to provide non-profit organizations with the resources they need to be successful in accomplishing their missions. It is our goal to help point your organization towards the available resources and to assist you throughout the process of registration and incorporation.
Maryland non-profits alone employ almost 240,000 people and account for almost ten percent of state employment. Those registered as Charitable Organizations may solicit donations from the general public, or they may be private grant making foundations that provide funding to other public organizations. Non-profits are often granted tax-exempt status by their state or federal government, and donations to public Charitable Organizations can also be tax-deductible for the donor.
What is a non-profit?
A non-profit organization (also called a not-for-profit or an NPO) is a group without ownership that uses its profits towards the cause of the organization. In the U.S. a common type of non-profit is the Charitable Organization, although not all non-profits fall under that category.
What are the types of Charitable Organizations?
By default, most tax-exempt Charitable Organizations are classified as “private” for tax purposes unless they take steps to prove otherwise. The funding for a private organization typically comes from a single source (such as a family or a corporation). “Grant makers” are private organizations that dedicate a considerable amount of their funds towards other organizations (often public) that further their cause.
A public Charitable Organization receives its funding from multiple sources including the government, individuals, and private organizations (“grant makers”).
What are the Standards of Excellence for non-profit organizations?
Maryland Nonprofits has compiled the “Standards for Excellence Code” list explaining codes of conduct and appropriate business behavior for strong, resourceful non-profit organizations. Although it was published by a Maryland organization, its code of conduct has become standard for non-profit organizations throughout the United States. It is broken down into several categories, but here some of the most significant:
- Long-term and short-term planning activities
- Policies for effective management
- Assess and approve the annual budget
- Hire the executive director and assess annual performance
- Regularly assess compensation arrangements
- Establish expectations with all personnel
- Meet as regularly as needed, at least four times per year
- Publish policies concerning board attendance and participation
- Maintain written minutes detailing each meeting
Conflict of Interest Policy
- The organization ought to have a written conflict of interest policy
- The Policy must be accessible to all board members, staff, and prominent volunteers
- The policy should include a summarizing statement
- The statement must be signed by board members, staff, and volunteers
- The organization must have an annual report detailing its mission, activities, and audited financial information
- At least one employee must ensure the public has access to information regarding the organization
- Fundraising should equal approximately three times fundraising activity expenses
- Solicitation must be accurate and open
- Non-profits must honor all claims about how contributions will be used
- Non-profits must honor any specific contribution intentions by a particular donor
- All donors must have the opportunity to remain anonymous
- Donor anonymity must be respected and ensured
- The organization should have policy regarding gift acceptance
Public Affairs and Policy
- Public policy advocates must have a written policy outlining how the organization determines a policy stance
- All public education must be accurate and up-to-date, and provide all necessary context
- Those non-profits that promote public participation must make their best efforts to remain nonpartisan
Contact Us today to discuss your non-profit legal questions.