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Nonprofit Formation & Governance
Standing up an organization that can hold money, hire people, and survive a change of board.
What This Work Covers
Forming the entity, obtaining and keeping tax-exempt status, and building governance that actually functions once the founding energy wears off.
Nonprofits get into serious trouble for governance reasons far more often than for mission reasons. A board that does not meet. Minutes nobody keeps. Restricted gifts spent on general operations because they were in the same account. A founder the bylaws make impossible to replace. None of these look urgent until the day they are the only thing anyone is talking about.
Grant funding adds a second layer, because funder obligations, reporting, and eligibility requirements outlast the award itself. When governance failures become a dispute rather than a problem, that is litigation, and it is handled in the Nonprofit & Church Litigation.
What We Handle
Formation and incorporation
Articles, bylaws, and the initial board, structured for the organization you intend to become rather than only the one you are starting.
Tax-exempt status
Federal exemption applications, state exemptions, and the ongoing filings that keep the status once it is granted.
Bylaws and governance policies
Conflict of interest, whistleblower, document retention, and the other policies the Form 990 asks about by name.
Board development and training
The duties of care, loyalty, and obedience explained in language a volunteer board can actually apply in a meeting.
Restricted funds and donor intent
Gift agreements, written restrictions, and the accounting discipline that keeps restricted money restricted.
Grant compliance
Funder obligations, reporting, subrecipient monitoring, and eligibility requirements that carry on past the award date.
Employment and volunteer matters
Staff, contractors, and volunteers, and getting clear about which category each person is actually in.
Mergers, affiliations, and dissolution
Combining, affiliating, or winding down without stranding assets or breaking donor restrictions.
Sound familiar?
Where Nonprofits Get Into Trouble
Governance that exists only on paper
Bylaws nobody has read, a board that does not meet, and minutes reconstructed afterward. Every one of those becomes evidence if the decisions are ever challenged.
Restricted money spent generally
Donor restrictions travel with the gift. Spending restricted funds on operations is the most common serious problem we see, and it is almost always unintentional.
A founder nobody can remove
Structures built around one indispensable person work right up until that person has to be replaced, and then they do not work at all.
Who Does This Work
Terri Sharpley Reynolds
Nonprofit governance, fiscal accountability, grants, and board advisory work across Alabama, from Montgomery and Birmingham.
Robert J. Riccio
Tax-exempt organizations and the tax side, with an LL.M. in taxation and a CPA qualification behind the accounting questions.
Jordan W Gerheim
Entity structure, contracts, and coordination where a nonprofit sits alongside a for-profit business or a family's giving.
Before Your Next Board Meeting
Can you produce current, signed bylaws?
Today, without searching. If the answer involves someone's old laptop, that is the answer.
Are there minutes for every meeting?
For the last two years, approved and retained. Minutes written after a dispute starts carry very little weight.
Has every board member signed a conflict disclosure this year?
Annually, not once at appointment. The Form 990 asks whether you do this.
Do you know every restricted fund balance?
Without asking the bookkeeper. If restricted and operating money share an account, the answer is usually no.
Did the board review the Form 990 before filing?
The return asks whether it was provided to the governing body, and the honest answer matters more than the convenient one.
Who has signature authority if the director leaves?
Named, documented, and known to the bank before you need it.
How This Work Is Billed
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Related Services
Frequently Asked Questions
How long does it take to get tax-exempt status?
It depends on which application the organization is eligible to file and on IRS processing times, which move around. Smaller organizations that qualify for the streamlined application are generally determined much faster than those that must file the full application, which can run several months or longer. We will give you a current expectation when we look at your facts, and we would rather set that expectation accurately than optimistically.
Do we need a lawyer to incorporate a nonprofit?
No, and plenty of organizations file the paperwork themselves. What we most often get called in to fix is not the incorporation but the bylaws underneath it: purpose clauses that do not match the exemption applied for, board terms with no removal mechanism, and quorum rules that make action impossible once volunteers drift away. Those are cheap to write correctly and expensive to change later.
Can board members be paid?
Compensation to directors and officers is possible but is governed by conflict-of-interest rules, reasonableness requirements, and disclosure obligations, and it is one of the areas where getting it wrong carries personal consequences for the people who approved it. It needs a documented process, not a hallway agreement. Bring us the specific arrangement and we will tell you what it requires.
What if we already spent restricted funds by mistake?
Tell someone early. This is usually fixable, and it is far more fixable before an auditor, a funder, or a donor finds it than afterward. The path generally involves documenting what happened, restoring the funds where that is possible, and dealing with the funder directly. What turns it into a serious problem is the months spent hoping nobody notices.
Do you work with churches and faith-based organizations?
Yes, on formation, governance, property, and employment matters. Courts decline to decide questions of doctrine or religious governance, which shapes what can and cannot be resolved through a legal process, and that boundary is worth understanding before a dispute rather than during one. See Nonprofit & Church Litigation.
Build It So It Survives the Founder
Book a Risk-Free Strategy Session. Bring your bylaws, your last set of minutes, and your most recent grant agreement, and we will tell you where the exposure actually is.