Reply to Interest in a 270 Corridor youth Lacrosse Program

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[quote=Anonymous]Don't do it. There is zero reason to form a non-profit in your current situation.

You can't easily "own" or cash out: No equity, no selling the business for personal gain. Assets stay with the mission if you dissolve it.
Heavy oversight and restrictions: Strict rules on private benefit (no inurement to you or insiders), political activity limits, and "reasonable compensation." Excessive salary or perks can jeopardize tax-exempt status.
Administrative burden: Ongoing compliance (Form 990 filings, board meetings, conflict-of-interest policies, record-keeping) is more complex and expensive than a solo LLC or sole prop. Many small nonprofits struggle with this.
Board requirement: Even if you start solo, you need independent board members for governance. Running it truly alone risks "founder's syndrome" issues or IRS pushback. Good board members are hard to recruit and keep if they feel like rubber stamps.
Funding reality: Grants sound great, but they're competitive, often restricted, and don't replace earned revenue. If your "business" relies on selling products/services for profit, a nonprofit model may limit scalability and innovation.
Cost and time: Filing fees, legal help for articles/bylaws, IRS Form 1023 (or 1023-EZ), and state requirements add up. Many solo founders regret the hassle if they're not truly mission-driven with donation/grant potential.

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