Start a non-profit, but what happens when we're done?

D

danielburns

New member
Through research on the internet, it looks like many documentarians start a non-profit company for their film. Why is that? I assume it is for getting grants, yes?

And what happens when they are done with the film and want to sell it? Are they limited in any way under a 501(c)3?

Thanks!
 
Starting a non-profit is a massive pain in the ass and can take quite a long time for the actual incorporation to be final.

The best alternative that we have found is to form as a Limited Liability Corporation, which is much easier and faster to set up, then get an established non-profit to act as your fiscal sponsor. This allows you to apply for non-profit only grants and allows individual donors to write their contributions off as tax deductible, but you don't have the hassle and red tape of forming and maintaining your own non-profit.

The one draw back is that the non-profit fiscal sponsor must administer all of the funds received from non-profit grants, meaning that the grant will actually be awarded to them and they will distribute the funds to you, and will usually keep a small percentage of any funds received as an administrative fee.

None of this should be a big problem as long as you partner with an organization that has a lot of experience acting as a fiscal sponsor and, ideally, is well versed in the needs and practices of filmmakers or other artists. Look into the organization in your area and find out which ones are available to act as fiscal sponsors.
 
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