The Checklist for Starting or Expanding a Nonprofit Organization
This checklist is borrowed, in part, from the Vermont Small Business Development Center. It was developed as a helpful guide for businesses and has been adapted to be helpful for nonprofit organizations.
SMALL BUSINESS DEVELOPMENT: Contact the Vermont SBDC , the U.S. Small Business Administration , or SCORE counselor through your local economic development corporation. Business counselors are available for free one-on-one assistance on the process of researching, starting, operating, expanding, and closing a small business. SCORE stands for The Service Corps of Retired Executives, and they are volunteer business mentors.
REGISTRATION OF AN ASSUMED NAME: If you are going to do business under a name other than your corporate name, you need to register the trade name with the Secretary of State, using the trade name registration form . While you are waiting to register the name, it is often worthwhile to temporarily reserve the name with a name reservation form so that it is not accidentally or purposefully obtained by a competitor or unwitting third party. Get forms from the Vermont Secretary of State, 81 River Street, Montpelier, VT 05609. Phone: (802) 828-2386
HIRING EMPLOYEES: For information on the regulation of wages and hours, Vermont Occupational Safety and Health Act rules, Vermont Workers Compensation Program, and State Labor Relations Act Provisions, contact Vermont Department of Labor and Industry, National Life Building, Drawer 20, Montpelier, VT 05620-3401. Phone: (802) 828-2288. As a rule of thumb, nonprofits are treated in the same way as for-profit entities in regards to treatment of employees. For payroll and withholding information related to hiring, see VERMONT BUSINESS TAXES on this checklist.
UNEMPLOYMENT LIABILITY- For information on Unemployment Claimant (UC) compensation contact the Vermont Department of Employment & Training, 5 Green Mountain Drive, P.O. 488, Montpelier, VT 05601-0488; (802) 828-4000. All employers must report all gross wages paid to their employees during a calendar quarter. To obtain an unemployment tax account number, contact the Employer Services Unit at 802-828-4252. If your organization has had four or more employees for twenty weeks or more, it must establish liability by filing Form C-1. After 20 weeks with four or more employees, a payment selection is made. If your organization is not liable, you can still elect coverage voluntarily.
EMPLOYER'S TAX IDENTIFICATION NUMBER: Partnerships and corporations, with or without employees, must obtain an employer identification number. Complete and return Form SS-4 available from the Internal Revenue Service, 310 Lowell Street, Andover, MA 05501. Phone: (978) 474-5200
TOWN/CITY LICENSES, PERMITS, AND ZONING: Before buying a property or signing a lease, contact the city or town clerk where the business will be located to assure your plans conform to local restrictions and to obtain the necessary permits for buildings types and signs.
VERMONT BUSINESS TAXES: Register for a tax number with the Vermont Department of Taxes, 109 State Street, Montpelier, VT 05609. Phone: (802) 828-2505. Information on sales tax, withholding, payroll, or corporate taxes is also available. Ask for the booklet, A Guide to Vermont Business Taxes.
PROPERTY TAX EXEMPTION- Many nonprofit organizations are exempt from property taxes. See 32 V.S.A. §§ 3802 or contact the Vermont Department of Taxes with questions.
SIGNS: No outdoor advertising is permitted other than on-premise signs with a total area of not more than 150 square feet. An Official Business Directional Sign can be erected if you have a license from the Travel Information Council. Contact the Maintenance Division, Agency of Transportation, 133 State Street, Montpelier, VT 05602. Phone: (802) 828-2709.
STATE OCCUPATION LICENSES AND PERMITS: Depending on your business, you may need to apply for the privilege of engaging in a certain profession, business, or occupation with the Secretary of State , Redstone Building, 26 Terrace Street, Drawer 09, Montpelier, VT 05609-1101. Phone: (802) 828-2363.
OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION: Contact this agency to determine if there are regulations which apply to your business: Accident Prevention Division of the Worker's Compensation Board, Vermont Department of Labor and Industry , National Life Building, Drawer 20, Montpelier, VT 05620-3401. Phone: (802) 828-2286.
ACT 250: For construction of improvements for new or existing commercial and industrial facilities, or for the change in use of an existing facility, you should check with the District Environmental Coordinator to determine if a Land Use Permit (ACT 250) will be required.
OTHER STATE LICENSES, PERMITS, AND REGULATIONS: Contact the Vermont Agency of Natural Resources Permit Specialist for your region for information, to obtain a project review sheet, or to schedule an informational appointment. Use the " Locator" to find your specialist. Vermont Agency of Natural Resources, Environmental Assistance Division, Laundry Building, 103 Main Street, Waterbury, VT 05671-0411. Permit information is also found in the book, The Vermont Permit Handbook by the VT Agency of Natural Resources, which can be obtained from town clerk's offices, Vermont state libraries, Agency of Natural Resources, regional planning commissions, libraries, and SBDC offices.
ENVIRONMENTAL ASSISTANCE: The Vermont Environmental Assistance Partnership offers environmental assessments and information for all business types. Phone: (802) 728-1423. FAQs about Environmental Assistance.
ADVOCACY- Nonprofits wishing to preserve tax-exempt status need to be careful about how much advocacy they do. See 26 U.S.C. § 501(h) , consult an attorney, and visit the Independent Sector website for helpful hints. You may also find helpful information provided by the IRS. Lobbyists need to register using the Lobbying Forms. See also, A Short Guide to the Lobbyist Registration and Disclosure Law.
FUNDRAISING- Paid fundraisers and solicitors are required to register with the Office of the Vermont Attorney General, using the Paid Fundraiser Forms . The reason for this is made clear by a report, Where Have All the Dollars Gone? , which states, "Of the total contributions made to in-state charities, 71.4 percent went to the fundraisers and 28.6 percent to the charities." For general information visit the Charity Information page of the Attorney General's Office. You may also want to visit the Better Business Bureau to file a complaint, see charity reports, and advisories.
STATE & FEDERAL GRANTS & FUNDING- Different agencies and departments provide funding and grant opportunities to the nonprofit community. There is no comprehensive list of the money available. To get started, contact the Vermont Economic Development Authority, 58 East State Street, Suite 5, Montpelier, Vermont 05602. Phone: (802) 828-5627 Fax: (802) 828-5474. Email: info@veda.state.vt.us. For federal grant information see The Federal Commons or contact the U.S. Small Business Administration, Vermont District Office, 87 State Street, Room 205, PO Box 605, Montpelier, Vermont 05601; Phone: (802) 828-4422; Fax: (802) 828-4485.
GETTING ON THE BALLOT- The practice of going directly to the voters for agency funding has proliferated in the past ten years as federal and state funding has been reduced. As a result of the increase in demand for assistance, town officials have adopted a variety of policies and practices about when and how agencies may request financial support from the voters of the town. Because state law also provides agencies the right to petition to be placed on the ballot, confusion abounds. The goal of Getting on the Ballot: A Practical Guide for Social Service Agencies is to help clarify the law governing social service agency requests for appropriations.
POSTAGE- You may be aware that special nonprofit rates are available for some Periodicals and Standard Mail mailers, but you may not know who is eligible for those rates. Nonprofit postage rates are lower than regular rates, but not everyone can qualify. The following information will help you determine if your business or organization is eligible for nonprofit postage rates. See the U.S. Postal Service page " Special Rates for Nonprofit Mailers ."
LEGAL CONCERNS: You may need to consult an attorney regarding your form of business ownership, leases, contracts, patents, trademarks, copyright, and such.
ACCOUNTING CONCERNS: Consult an accountant regarding bookkeeping systems, income tax planning and payments, pay roll reports, withholding and related items. Remember that failure to withhold is one of the most common ways that nonprofits get tripped up.
ACCOUNTING CONCERNS: Consult an accountant regarding bookkeeping systems, income tax planning and payments, pay roll reports, withholding and related items. Remember that failure to withhold is one of the most common ways that nonprofits get tripped up.
INSURANCE CONCERNS: Consult an insurance agent about various forms of insurance: liability, fire, automobile, employee health and life, fidelity (insuring your business against employee theft), burglary and vandalism, business interruption, key-person insurance, and worker's compensation cost.
BANKING CONCERNS: Consult a banker about establishing a relationship for checking accounts, your future borrowing needs, credit card acceptance, and other concerns
TRADE ASSOCIATIONS: Research and contact trade associations for helpful information in starting your business, including market statistics and training opportunities. Consult the following directory source available at most business reference libraries: Encyclopedia of Associations, Vol. 1, National Organizations of the United States, Gale Research Co., Book Tower, Detroit, MI 48226, published annually. Includes lists, trade, business, professional, labor scientific, educational, fraternal, and social organizations in the US and historical data.
CHAMBER OF COMMERCE: Contact your local and state chambers regarding their helpful services for new businesses in your community. Vermont Chamber of Commerce , PO Box 37, Montpelier, VT 05601. Phone: (802) 223-3443
ECONOMIC DEVELOPMENT AGENCIES: Contact your city, county, and State of Vermont agencies for resources to assist you in starting a business. The Vermont Department of Economic Development publishes a useful booklet, "Doing Business in Vermont." Phone: (802) 828-3080. The Small Business Administration (SBA) is also a resource for new organizations.
OTHER RESOURCES: There are lots of issues to think about. If you don't find answers to your questions here, you might try The Internet Nonprofit Center's FAQ.