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Nonprofit Education

Hiring a Nonprofit Consultant vs. Attorney to Help Start Your 501c(3)

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This article provides a comprehensive overview and explanation of nonprofit consulting services to help you understand the differences between using a lawyer vs. a consultant for starting your nonprofit.

What is a Nonprofit Consultant?

A nonprofit business consultant is a person or organization that specializes in helping nonprofits by advising, guiding, training, or assisting on a variety of different topics. A nonprofit consulting service may assist nonprofits, including incorporation, 501(C)(3) tax-exempt status, fundraising, strategic planning, and budgeting.

What is a Nonprofit Attorney?

Not to be confused with a pro-bono attorney, a nonprofit attorney is a lawyer who provides legal services to nonprofits. Typically, they will help with incorporation, the 501(c)(3) application, creating nonprofit bylaws, and advising on specific legal matters related to the nonprofit.

Why Does a Nonprofit Need Help with Incorporation or Formation Requirements?

According to the National Center for Charitable Statistics (NCCS), almost 70% of nonprofit organizations have total annual revenues of less than $500,000. This data suggests that most nonprofits operate like small, independent businesses and share similar challenges experienced by those in the for-profit sector. 

Common reasons for engaging a nonprofit consultant include a lack of time due to operating with a small staff or a scarcity of in-house resources or expertise. Since most nonprofit consulting services specialize in specific areas, nonprofits should define their needs and understand the differences between using a lawyer vs. a consultant when determining what skill sets are needed to get the work done correctly.

Common Reasons for Choosing a Nonprofit Consultant to Setup Your 501c(3)

Lack of Time

BryteBridge is a nonprofit consulting service that helps over 4,000 nonprofits each year establish their incorporation requirements and achieve tax-exempt status. In addition to obtaining our expertise, many nonprofits outsource to make better use of their time to focus on their mission, build programs, and recruit volunteers.

Lack of In-House Resources

Even for nonprofits who have time, if they lack the staffing power or know-how, they will likely face obstacles in structuring the nonprofit and effectively accomplishing the appropriate steps. That’s a good reason to outsource: an outside expert can help teach your current staff the skills they need or handle specialized requirements such as accounting, tax preparation and tax filing, payroll, or generating annual reports.

Expertise

When you’re making significant decisions that will affect your nonprofit’s future, such as incorporating correctly and achieving 501(C)(3) status, a nonprofit consultant, attorney, or CPA can give you some valuable advice. As a result of working in partnership with an experienced professional, you have the reassurance your nonprofit is set up correctly with the IRS, as well as state and municipal authorities. In addition, if you make a mistake on the 501(C)(3) application, the processes start over and can delay your status an additional 4-6 months. At BryteBridge Nonprofit Solutions, we guarantee a quick and smooth 501(C)(3) application approval when you hire us to help start your nonprofit.

Hiring a nonprofit consulting service that understands the nuances of setting up a nonprofit while helping you get 501(C)(3) tax exemption can save you both time and money in the long run. All our nonprofit consultants have years of experience. By working with us, we will make sure your nonprofit is set up correctly – and we’ll stand by your side if the state or IRS requires clarification or follow-up inquiries.

A Lawyer vs. a Consultant. Which is Better?

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Whether you elect to hire a nonprofit consultant or a lawyer, you are hiring them for their advice, guidance, research, and technical proficiency. As part of your research, make sure they specialize in helping nonprofits. Additionally, you should request a flat or fixed rate for the provided services. We recommend a fixed price because if they specialize, they should have confidence in the total time and resources required to establish your nonprofit.

Because BryteBridge is a well-respected nonprofit consulting service, we’ve heard stories of newer, smaller nonprofits paying anywhere from $10,000 to $30,000 for a 501(c)(3) setup when going directly through an attorney. We cringe when we learn of the high costs, especially when most new nonprofits don’t have the budget to spend that much on start-up costs!

Our current premium-level services for working with a nonprofit consultant start at $1,500, and we guarantee our work. In addition, you should know standard hourly rates if you choose to hire an attorney. According to the Florida Bar Association (BryteBridge is based in Florida), the average hourly rate for an attorney in Florida is $300 per hour. Our research indicates most states range between $100 and $400, but maybe as high as $2,000+ depending on the experience level and type of law. For attorneys who charge a flat fee, the fee should be in the $1,500-$5,000 range (with, of course, some exceptions based on overall complexity). Anything greater than this should be earmarked for very complex or unique setup challenges, where the nonprofit is attempting to navigate specific legal challenges such as conflicts of interest concerns, political organizations, large corporate or family foundations, and other non 501(c)(3) types of nonprofits.

Lawyer vs. Consultant for Start-Up Help

Committed to Nonprofit and Professional Experience

While anyone can brand themselves as a nonprofit consultant, there are many different ways for nonprofit entrepreneurs to distinguish between true, experienced professionals and those who talk a good game but have never walked a mile in your not-for-profit shoes. 

As a nonprofit consulting service, BryteBridge believes in hiring the best. Our team members have, on average, 8+ years of experience working for or with nonprofit organizations. In addition, many team members hold graduate-level degrees in Nonprofit Management, Public Administration, and Organizational Development and Leadership. Our team is one you’ll trust and enjoy working with – guaranteed.

You Do Not Need Lawyers and Nonprofit Consultants for Setting Up a Nonprofit

While we have spent much of this post educating on the difference between hiring a nonprofit consultant versus an attorney to help start your nonprofit, the truth is outsourcing isn’t for everyone. We want to make that knowledge transparent.

The process of acquiring your 501(c)(3) classification can be intimidating and complicated, and we certainly understand the need to find someone willing to assist with such a significant responsibility. Most individuals (and even most lawyers) have never filed Form 1023. In contrast, the team at BryteBridge completes over 1,500 of these IRS forms every year as part of our commitment to helping nonprofit entrepreneurs launch their community-driven projects. 

Not every nonprofit founder needs the assistance of a nonprofit consulting service. For those who feel ready to take the plunge, we offer a start-up guide to ensure you have a complete understanding of everything necessary to form your nonprofit.

If you have questions or need additional support, don’t hesitate to reach out and speak to our experienced nonprofit consultants for valuable information on incorporation or fundraising to build a new nonprofit venture from scratch. Reach out today and be part of the growing 35,000 people we’ve served!

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