Organization structure

Step 4 of 5

I would like to :

Start an ‘unincorporated’ nonprofit organization.

Start an ‘incorporated’ nonprofit organization.

What is the difference between the two ?

Very simply put,

An Unincorporated organization does not register itself with the state authorities and is not liable to comply with the reporting requirements of the state.

An Incorporated nonprofit organization is formally registered with the state authorities and is generally required to submit annual report in prescribed format to the state authorities. An incorporated organization enjoys greater credibility with funding agencies because of transparency in reporting.

Which one is right for me ?

You should consider starting an Incorporated nonprofit organization if –

a) The expected annual budget for the organization in years to come exceeds USD20000. (Just a thumb rule)

b) The organization is expected to continue its activities in the foreseeable future.

You might decide to start an unincorporated non profit organization if –

a) This is a temporary project that you wish to undertake

b) The annual budget is less than USD 20,000. (Again a thumb rule)

Proceed to Step 5 of 5

Start all over again

Additional reading

Starting an unincorporated organization

Should you incorporate your nonprofit ?