Why You Shouldn’t Have Multiple Nonprofits Within an Umbrella Nonprofit
Having multiple nonprofits under an umbrella nonprofit may seem like a good idea. This is because the parent organization, or the umbrella, may provide resources to the smaller organizations.
Many people ask if they could have multiple nonprofits under an umbrella nonprofit. Let me answer this frequently asked question about starting your nonprofit. Have you ever heard the adage, “Don’t put all of your eggs in one basket?” Well, the same holds true in the nonprofit sector. You will want to set up different nonprofits for each nonprofit organization. You should do this as soon as you can afford to.
Why? Because if all of your nonprofits are under the same organization, then someone that want to sue you based on one aspect of your nonprofit (e.g., food pantry) will have access to your assets from the other nonprofit organizations (e.g., mentoring and tutoring, etc.) if they are all under the same nonprofit.
As convenient as it may seem to have one “umbrella” nonprofit, major foundations and industry professionals almost always form separate entities to minimize the chances of someone being able to sue them and taking everything.
Starting a nonprofit is not a simple task. You need the right team with the right expertise to help you on this journey. Our team has helped thousands of people start and grow nonprofits that impact the world. If you want the best for your nonprofit, look no further than Chisholm Law Firm. We have a 100% success rate for our clients.
You can rest assured that your nonprofit is in the best hands and that we’ll get everything done right the first time. Call us today, or schedule your free consultation online.
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