Expert: John Varghese - 9/1/2009

Question
Hello,
I have a question. I have been thinking of starting a non profit organization here in my home town of Los Angeles. I see the huge need for legal assistance and that has driven me to start a non profit. I am not an attorney but I am a paralegal and I have 2 lawyers who are willing to volunteer for me.  I have 2 questions? 1. can i start a non profit as an individual person with no board of directors only volunteers?
and
2. instead of soliciting grants and funds can we charge lets say a minimal fee for our services.  

Your answers are greatly appreciated.  Thank You


Answer
Dear Yasenia,

n the United States, nonprofits can operate as unincorporated associations, charitable trusts, or corporations. There are fewer government reporting requirements for unincorporated associations, but they will find it more difficult to be recognized as tax-exempt, and they cannot receive grants from most foundations and corporations. Charitable trusts can be recognized as tax-exempt, but they do not offer their trustees the same protections from personal liability as those enjoyed by directors of not-for-profit corporations.
For charitable trusts, you just need a trust deed settling a trust, and making either yourself or any other person/organisation a trustee and some specified class of people the beneficiaries. This can be started by individual person as well as a private trust. Hope this answers your first question.
There is no legal ban in charging a fee from the services/a commission on the products, but that should not be for the purpose of earning a profit, but for financing the running of the organisation.The fees is better structured as a membership fees in which case the surplus can be used for funding future programmes.

Hope this clarifies.
Regards

John Varghese