Advantages to Incorporating a Non-Profit Organization

Non-profit organizations run the gamut when it comes to size and cause. Depending on the service or services provided, many non-profits make some kind of profit. Even though that profit is directed back towards the operation and services of the organization, it will be taxed unless the organization is 501 (c)(3) exempt or is a non-profit corporation. There are several areas of operation and services where incorporating can bring down costs and provide security.

Public and Private Grant Money

Grants are allocated sums of money that must be applied to a specific cause. By having tax-exempt status an organization is much more likely to qualify for either a public or private grant. While the non-profit could just be an association instead of a corporation, applying for tax exemption is more difficult as a non-profit association. In the same vein of tax exemption for the non-profit, incorporating allows the organization to solicit donations that donors can write off on their personal income taxes.

Unwanted Lawsuits

Non-profits typically engage in a limited amount of political advocacy, but some advocacy efforts could bring on an unwanted lawsuit. Incorporated non-profits can support their directors and officers in both defending the lawsuit as well as protecting them from personal liability. This protection from personal liability is crucial so that the members and directors do not have to fear for their own money and property being on the line.

Speak with an Austin Business Lawyer Today

If you are the director of a non-profit organization and are considering incorporating your organization, the support and guidance of an experienced law firm could make the process easier and more beneficial. Contact the Austin business lawyers of Slater, Kennon, & Jameson, LLP at 512.472.2431 to speak with an attorney who knows business.