Some advantages and disadvantages of becoming a non-profit organization:
- You would be a fiscal entity--have your own bank accounts, etc.
- You would obtain limited liability for the board of directors, trustees, officers and technical teams, as creditors can only reach as far as the corporate assets, not into the personal assets of the board members.
- You would be eligible for financial support from a broader group of grantors such as private foundations.
- The public could receive tax deductions for their contributions to you if you were a non-profit organization.
- It would be easier to work with some partners.
- Accounting would fall to the organization
- Several major reports are due to the IRS and the State annually.
- It will cost approximately $1500 to hire an attorney to help with the process. [Note: one parent group was able to save money by using the legal services of a university.]
- A non-profit cannot be politically active.
- There would be liability insurance expenses.
- Members who work for Federal agencies might have to abstain from votes or from being on the Board of Directors.
- Your original Bylaws will have to be changed to reflect the new type of organization.
- There will be decisions about how you will look that will need to be made in the future.
[Thanks to the Middle Fork Willamette Watershed Council, Oregon.]
N.B.: This is provided to you for informational purposes only, and is not intended to be legal advice. Please consult an attorney for legal matters.
Guide to Illinois Law: How to form nonprofits
Link to examples: http://www.theoec.org/WaterTrainingSupport.htm