What Are The HR Needs?

Operations:        One full time dedicated employee with at the very least a bachelor’s degree, general computer knowledge
                     (office or equivalent), preferably knowledgeable in the nonprofit organization’s purpose

Accounting:        A third party accountant / bookkeeper

Fund raising:       See operations. Alternatively, or in supplement, hiring a professional fundraiser

Governance:       Actual officers and directors who donate their work the first year

At The End Of The Day, Do The Nonprofit Organization’s Benefits Outweigh Its Costs?

The answer to this question is twofold:

1. Can one expect to make more than $ 138,500.00 the first year of operations?

2. Can the nonprofit organization promoters afford a cash drain of $ 10,000.00 per month for 9 months?

Need For Knowledgeable Individuals

- Accounting: having an accountant who is familiar with the world of nonprofit organizations is particularly useful. Indeed, the IRS works through a set of unpublished rules that only knowledgeable professionals have encountered and can therefore protect their clients.

- Operations: having a person who knows the field that is the focus of the nonprofit organization and is also trained in the nonprofit environment helps to better focus efforts and resources dramatically.

- Regulatory: there is a definite need for counsel or a knowledgeable advisor from conception through maturity.

Individuals knowledgeable about fundraising: Individuals who will cover the fundraising aspect of the nonprofit’s operations must know the field of activity, the potential donors, the right messaging, how to introduce requests for grants, the regulatory environment, as well as both the best practices and the best marketing processes.

If all ingredients for success exist, how do I link the nonprofit organization to the for-profit organization?

To avoid confusion, let's reiterate that the for-profit organization did not elect to switch status. Such choice has important consequences that must be studied with your own CPA and lawyer at the very least.

The hypothetical we use here is ABC desires to promote DEF to receive money from donors. If the entirety or most of the funds raised are funneled to ABC, the status of a public nonprofit corporation is likely to be changed into a foundation, which may have substantial tax consequences after a few years.

For a nonprofit organization to operate in accordance with IRS requirements, the nonprofit organization can allocate funds based on an objective criterion (e.g., monies distributed to all applicants who qualify for grants from the nonprofit organization, including ABC). Hyper-concentration to the benefit of ABC will raise the same issue as funds funneled only to ABC (disqualification and reclassification as foundation).

In conclusion, to provide quality SUD treatment, providers need to diversify their income stream by accessing networks of donors (both private and public).

Converting a for-profit organization into a nonprofit does not make economic sense for investors or founders.

Creating and operating a nonprofit organization can be costly.

Only if it is actively promoted and developed can a nonprofit organization benefit one or more beneficiaries.

Funneling funds from a nonprofit to only one for-profit entity may lead to disqualification of the nonprofit organization and reclassification as a private foundation, a switch that may be fiscally expensive.

Only a nonprofit organization operating within the bounds of the law can provide SUD operators with substantial resources coming from private and public donations.

Stay tuned to learn more about a model guaranteeing fair distributions in accordance with applicable laws and providers’ work.