Start a New Charity or Not?

According to the National Center for Charitable Statistics, as of May 2015, there were 1,529,762 tax-exempt organizations and 1,059,150 public charities in the United States.

Over the years, individuals have approached me asking for my counsel on starting a new charity. The first question I always ask “Does a charity already exist that is doing work in the area that you have an interest?” If so, I advise them to work with that charity. Do your research, look for a charity already doing what you want to do and support the existing charity.

Establishing and running a charity involves a great deal of effort. Filing articles of incorporation, submitting an application to the IRS for 501(c)(3) status review and (hopefully) approval, annual reporting requirements to the IRS, reporting to the charity's donors and sponsors how their donations were used (transparency, stewardship and accountability), just to name a few, are some of the things a non-profit must do to maintain charity status and continue as a viable charity.

Redundancy of effort, duplication of overhead and administrative costs by charities with similar missions, is a real issue in the “charitable world.”