Q: Are there other options for starting an animal shelter/rescue besides 501c3? I don’t have 3 unrelated board members
While 501(c)(3) status is a common and often preferred option for starting an animal shelter or rescue organization, there are other ways to establish a nonprofit entity in North Carolina. Here are a couple of alternative options:
(1) Fiscal Sponsorship: Another option is to seek fiscal sponsorship from an existing 501(c)(3) nonprofit organization. Under a fiscal sponsorship arrangement, the sponsoring organization agrees to provide administrative and financial support to the sponsored organization, which can help the sponsored organization to qualify for grants and other funding opportunities.
(2) Unincorporated Association: An unincorporated association is a group of individuals who come together for a common purpose, but do not establish a formal legal entity. While an unincorporated association does not have the same legal protections and benefits as a nonprofit corporation or 501(c)(3) organization, it can be a simple and flexible option for starting a small animal shelter or rescue.
It's important to note that each of these options has its own advantages and disadvantages, and you should carefully consider the legal and financial implications of each before making a decision. You may also want to consult with a lawyer or nonprofit expert to help you navigate the process of starting your animal shelter or rescue organization.
The requirement for three unrelated directors is not a hard and fast rule. It is true that the IRS's Technical Guidance (the internal document that IRS uses to guide its revenue agents if they find themselves auditing a 501(c)(3)) teaches their agents that a small board of related people might be a sign that a charity is not truly dedicated to a public benefit, but it is not a legal requirement. Your initial filing with the IRS (called a Form 1023) and your annual filings with the IRS (called a Form 990) will ask you to explain any relationships between directors, but the only thing that the IRS cares about is making sure that the organization is "organized and operated exclusively for" the public and charitable purposes of Section 501(c)(3). So, for the purposes of Section 501(c)(3) of the Revenue Code, there is nothing that prevents an animal rescue or shelter from obtaining 501(c)(3) status if it has a board of three related people, or a board of less than three people. In addition, North Carolina's nonprofit corporation act requires only requires that the board "shall consist of one or more" people.
That said, a board of directors that draws from more than just a few related people will often help the nonprofit to have a wider base of donors, a wider variety of insights and perspectives, and a wider impact when looking for volunteers or getting your message out. Balanced against that is the fact that large and unrelated board often makes founders of nonprofits worry about losing "control" of the organization that they built. That's a fair concern, and finding the right people to flesh out the board is as much an art as anything else.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.