Non-Governmental
Organizations (NGOs)


An organization that is NOT
administered by federal, state, or
local government.
Most have a membership base
Recreation-related NGOs



Recreation clubs for members
Volunteer groups for museums, nature
centers, parks, etc... (e.g., “Friends
groups”)
Other membership-based groups (e.g.,
TNC, Audubon Society)
Formational meeting: benefits vs. costs
Bylaws
Incorporate?
YES: Certificate of
Incorporation
No: Charter
Employer Identification Number
Federal income tax exemption
State sales tax exemption
Benefits of NGOs




Provide community services not provided by
government
Provide a unified voice
Provide a mechanism to accomplish similar
goals of members
Distribute association-related information
quickly
Costs of NGOs




Difficult for members to volunteer
time
Volunteer burn-out
Conflicts between personal and
organizational goals
Costs of membership (e.g., dues,
travel to meetings)
Formational meeting: benefits vs. costs
Bylaws
Incorporate?
YES: Certificate of
Incorporation
No: Charter
Employer Identification Number
Federal income tax exemption
State sales tax exemption
Bylaws


Written, detailed set of internal laws
that govern the activities and
procedures of an organization.
Identify NGO as “not-for-profit”
What is a “not-for-profit”
NGO?
An organization whose members
receive no monetary profit.
Formational meeting: benefits vs. costs
Bylaws
Incorporate?
YES: Certificate of
Incorporation
No: Charter
Employer Identification Number
Federal income tax exemption
State sales tax exemption
Certificate of Incorporation


A written document that identifies the
name, purpose, and duration of the
corporation.
Filed in each state that organization
offices are located in (DOS)

Usually filed by an attorney

Processing takes about 1 year
Charter

A written document that:



states what the organization’s and
board’s powers are
shows (through signatures) that the
members agree to the association.
Necessary for obtaining “tax exempt”
status
Why incorporate?




Liability
Status as a legal entity
Organizational permanency
Buying/selling property
Formational meeting: benefits vs. costs
Bylaws
Incorporate?
YES: Certificate of
Incorporation
No: Charter
Employer Identification Number
Federal income tax exemption
State sales tax exemption
Formational meeting: benefits vs. costs
Bylaws
Incorporate?
YES: Certificate of
Incorporation
No: Charter
Employer Identification Number
Federal income tax exemption
State sales tax exemption
Two types of federal tax
exempt organizations
1. Internal Revenue Code 501(c)(3)
status

charitable, religious, scientific,
educational, literary, and amateur athletic
organizations
2. IRC 501(c) status

business and trade organizations, and
recreation clubs
Why is tax exemption
important?





Applying for grants
Bulk-mailing benefits
Some lobbying permitted (<5% budget)
No taxes on income
No sales tax
Summary:
Choices for NGOs

Corporations



For-profit
Not-for-profit
Not-for-profit taxexempt:


501(c)(3)
501(c)

Charter
organizations


Not-for-profit
Not-for-profit taxexempt:


501(c)(3)
501(c)