Overview of the Types of Non-Profits

Overview Of The Types Of Nonprofits By The Startup Garage
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Now that you have decided to start a non-profit organization, you must consider which legal structure you wish to use.  The most common form of non-profit is the non-profit corporation, and later in this blog series I will explain how you can file for incorporation if you wish to do so.  If you don’t want to go through the incorporation process, you can consider structuring your non-profit as either an unincorporated association or a trust.

Before you decide which structure is the best for you, consider the differences in choosing between the legal structures.  The main reason that a non-profit chooses to incorporate is to protect the management from personal liability from lawsuits or debt.  Depending on the type of work your organization will be doing, and the type of assets the organization will be buying or owning, chances are that you will want the legal protection of a corporation.  A corporation is a separate legal entity that has the capacity to sue and be sued, to own property and to make contracts.  But if the corporation cannot meet its financial obligations, the personal bank accounts of the people in charge of the organization will be protected.  Another option for your non-profit is to form a limited liability company (LLC).  A LLC offers legal protection similar to that of a corporation but is easier to form and manage.

Once you have engaged in a risk-assessment analysis for your organization’s activities and you have an idea as to how much liability you will be exposed to, you can narrow your entity choice options.  If you find that there is some exposure to risk, but perhaps not enough to justify the effort and expense necessary to file for incorporation, you can also consider investing in liability insurance.  Other options for minimizing liability include using waivers or operating under an umbrella group that has its own insurance policy.  Or you can try to eliminate the risky activities.


Whether you have a question about the Types of Non-Profits, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!
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About Tyler Jensen

I work with entrepreneurs who are looking to attract investment and get out of the "Garage". I am passionate about helping entrepreneurs start companies that matter. I helped launch over 100 Companies, Non-Profits and Social Enterprises. I consider myself a serial entrepreneur, startup coach & trusted advisor. * Launching New Companies (For Profit, Non-Profit and Social Enterprise) * Expert Business Plan Writer * Extensive Network of Business Relationships focused on Launch & Rapid Growth of New Companies * Startup, Growth, Marketing, Technology, Web, Business Systems * Trusted Advisor to CEO’s & Entrepreneurs * Capital Raising Strategy Development * Startup Team Development The first company I started and sold is VAVi Sport & Social Club which grew to over 25,000 members in six years, was recognized as San Diego’s 30th fastest growing private company in 2006 by the San Diego Business Journal and 32nd fastest in 2007, and sold for over 25X the capital investment.