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George E. Constantine, III, Esq.

Doing Business 2.0—Starting and Operating a Nonprofit in DC George E. Constantine, III, Esq., Partner Venable, LLP, Washington, DC (202) 344-4790 geconstantine@venable.com. George E. Constantine, III, Esq.

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George E. Constantine, III, Esq.

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  1. Doing Business 2.0—Starting and Operating a Nonprofit in DCGeorge E. Constantine, III, Esq., PartnerVenable, LLP, Washington, DC(202) 344-4790geconstantine@venable.com

  2. George E. Constantine, III, Esq. • Counsel to tax-exempt charities, trade associations, professional societies, labor organizations • Former Staff Counsel for the American Society of Association Executives • Concentrates practice on tax-exemption matters, contracts, election law, corporate governance and other issues affecting tax-exempt, nonprofit corporations.

  3. Forming a Nonprofit—Preliminary Steps • Establish mission and goals • Survey the landscape—are there other organizations pursuing similar mission and goals? • Assess likelihood of funding, dedicated volunteer resources, etc.

  4. Forming a Nonprofit—Legal Requirements • Articles of Incorporation • Name (doesn’t need an “Inc.” or similar signifier in DC) • Purposes • Name and street address of incorporators • Members or not? Classes? • List of initial directors (at least 3, optional to list them) • Designated body?

  5. Forming a Nonprofit—Legal Requirements • Articles of Incorporation (continued) • Registered agent in DC • 501(c)(3) dissolution and purposes language • Indemnifying directors and limitations of liability

  6. Forming a Nonprofit—Legal Requirements • File Articles with DCRA (one incorporator, notary not needed) • Draft Bylaws • More detailed than Articles of Incorporation • Should include discussion of Board of Directors, Committees (if applicable), Members (if applicable), indemnification, etc. • Organizational resolutions—approving Bylaws, authorizing establishment of bank accounts, naming corporate officers (at least a President, Secretary and Treasurer), approving policies

  7. Forming a Nonprofit—Legal Requirements • Tax Forms • Federal Exemption application—Form 1023 for 501(c)(3); Form 1024 for most other types of exempt organizations • DC Exemption—Form 164 • 501(c)(3) organizations can obtain exemption recognition for franchise (income) tax, sales and use tax, personal property tax • Applicable as of date of IRS recognition

  8. Charitable Solicitation • Charitable Solicitation License • Occupancy certification • Good standing as a corporation • Tax registration FR500 • Clean Hands certification • Basic Business License Application • Articles of Incorporation, Bylaws, Uniform Registration Statement, other documents

  9. Other Considerations • Operating, fundraising in other states? • Trademark registration • URL reservation • Lobbying registration • Affiliated entities? • Insurance coverage (note minimum levels of $200K for individual claim and $500K for total claims in order to benefit from volunteer immunity provisions)

  10. Basics on Nonprofit Corporation Legal Issues • Hierarchy of Authority • State Nonprofit Corporation Law (statute and common law) • Articles of Incorporation • Bylaws • Board Policies and Procedures • Unwritten Common Practices

  11. Basics on Nonprofit Corporation Legal Issues • Governance Structure • Board of directors • Executive committee • Other committees of the board (nominating, finance) • Members • Other committees • Staff

  12. Corporate Governance • Fiduciary Duties • Care • Loyalty • Obedience

  13. 501(C)(3) Issues • Public benefit requirement—charitable, educational, advancement of health, etc. • No substantial private benefit • No private inurement • Political activities • Lobbying • UBIT

  14. 501(C)(3) Issues • Form 990 • Once a year (May 15 deadline for calendar year filers) • 990-N—even very small organizations have to do it • Automatic revocation • Publicly available information

  15. Questions? • http://www.venable.com/associations/publications

  16. Contact Information George E. Constantine, III Partner Venable LLP 575 7th Street, NW Washington, DC 20004-1601 Phone: 202-344-4790 Fax: 202-344-8300 Email: geconstantine@venable.com

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