Starting a Nonprofit in Virginia

photo credit: https://bbnwrs.org/

The Back Bay NWR Society is a 501(c)(3), which is the general organization for most nonprofit groups. For my penultimate assignment for my Biodiversity Stewardship class, I was asked to detail the process for forming a nonprofit in my state, in this case Virginia. However, before I get into the process, I wanted to share some insights from my interview with Richard Dyer, the former president of the Back Bay NWR Society. We had a long phone conversation over the weekend; he was interviewing me for a Society Member Spotlight in the Back Bay monthly newsletter. 

We chatted about a wide variety of subjects, but I wanted to know what it was like forming a Friends Society in Virginia. He told me that the process involves a lot of paperwork, planning, meetings, and a significant amount of personal investment. He estimated that he spent hundreds of hours working toward founding the Society, starting in 2018. He worked diligently for two years going through the lengthy legal paperwork and funding channels until he made the Society a reality in 2020. Obviously, 2020 was one of the absolutely WORST times to start up an organization that relies heavily on donations and volunteers.

Before founding the Society, Richard worked for the Back Bay Restoration Foundation. He had a sense of what it would take to create a Friends group, and Back Bay was in dire need (see my previous post for the definition of a Friends group). The Back Bay Restoration Foundation acts as kind of an umbrella for Back Bay, representing the Refuge in legal battles and spearheading major projects. However, Back Bay needed boots on the ground. The Refuge needed public engagement, strong hands to pull invasive plant species out of the ground, outreach activities on-site to foster the love of wildlife, and volunteers to maintain the trails and gardens. A Friends group would also be able to bolster the activities of the Restoration Foundation while serving as an added layer of protection for this beautiful but vulnerable area. The work was rewarding, but exhausting. 

When I first spoke to Richard in mid 2021, I could hear the strain in his voice. Nonprofits are weighty undertakings that rely on the wisdom, experience, and passion of their leaders. With the Society, there were a lot of "one step forward, two steps back" experiences. I imagine this is common to most nonprofits, but the Society was founded during the global pandemic. The wild boar population, which had been more or less held in check, started to rise again when False Cape State Park was closed to hunting. There was a dearth of volunteers, and most of the project planning that had started years before ground to a halt. It was a trying time, and luckily the Society weathered the storm.

I write about this because it's important to note the great personal sacrifices that are needed to start a nonprofit. This is not meant to discourage anyone from following their dreams, but to serve as a cautionary tale. Nonprofits are a marathon, not a sprint; the legal, social, and financial obstacles can be staggering even in the best of times.

When I spoke to Richard this past weekend, he had taken a spontaneous trip and was unprepared for a formal interview. I was glad for this; formality is not my strong suit anyway. I'd rather settle in for a chat and see where it goes. A year and a half after our first conversation, Richard's voice was different; he sounded more relaxed and less burdened than before. I was not surprised to learn that he has since resigned as President of the Back Bay NWR Society, though he is still very active in the organization. He is a Friend to Back Bay always, and he's a friend to me as well.

So...You Wanna Start a 501(c)(3)?

• Step 1: Choose your directors
• In Virginia, all nonprofits must have a Board of Directors. Directors are the governing body of the nonprofit
• Step 2: Choose a name
• This can be trickier than it sounds, because your organization must have a unique name that is not already in the business name database
• There is an application form (of course) and a $10 filing fee. Once the form is submitted, the name can be reserved for 120 days
• The Virginia State Corporation Commission is responsible for granting and tracking organization names
• Step 3: Appoint a registered agent
• Sometimes the director serves as the agent initially. This is acceptable for nonprofits but NOT for LLC's or corporations, which must employ a 3rd party agent
• Registered agents handle all of the official paperwork
• The registered agent can be any adult (no special license required) but they MUST be a Virginia resident 
• Step 4: Create articles of incorporation
• So...much...paperwork
• Articles of incorporation establish the nonprofit's purpose, members, election processes, dissolution protocols, names and addresses, limitations, etc.
• A template can be found on the Virginia State Corporation Commission's website
• Articles of incorporation are necessary for forming a nonprofit, but there are additional requirements to apply for the 501(c)(3) tax exempt status 
• There is a $75 fee to file the paperwork for the articles of incorporation 
• Step 5: Establish bylaws 
• Bylaws for a framework for how the organization will be run. 
• The board holds a meeting to decide how members will be elected, the length of the fiscal year, funding/banking information, etc.
• Each meeting should have documented minutes that act as permanent records 
• Step 6: Obtain an employee information number (EIN)
• Yet another IRS form
• No fee for this one
• Step 7: Obtain a business license if necessary
• Filed at the clerk's office in the city or county in which the nonprofit is founded
• Requirement depends on the scope of the nonprofit's activities 
• Step 8: Annual report
• Required annually (hence the name)
• Involves filling out another form from the Virginia State Corporation Commission
• Step 9: File for federal tax exemptions
• Use IRS form 1023 or 1023-EZ (misleading name) depending on amount of revenue and assets per year 
• Both forms require detailed information
• Step 10: File for state tax exemptions
• Too many forms (Opinion)
• Forms are found on Virginia Dept. of Taxation website
• Step 11: Additional paperwork
• Encompasses permits required for fundraising activities
• Forms related to nonprofit registration may also be required in certain areas 

Phew. It hurt my brain writing all of that. Timelines vary, but like I said, from the planning stages to inception, it took two years for the Back Back NWR Society to become an official nonprofit. Richard Dyer also had experience and networking capabilities that many nonprofits may not have at first. Again, this is not to discourage anyone, but hoo boy, it's not a small task to undertake. I'd rather get three Master's degrees than go through all of federal and state red tape, but that's why I'm a contributing member and not on the Board. Hats off to anyone who has founded a nonprofit; we need you! 

For further reading, this is the website that I used to get the information above. There are a lot of hyperlinks that provide further information and definitions, as well as links to the abovementioned forms.