start the future: understanding 501(c)(3)

a photo of a canal in a neighborhood in Venice, California. the canal is in the middle third of the picture, stretching vertically from the bottom to the center of the photo. the blue sky with streaks of clouds is reflected in the still surface of the water. a few palm trees and hedge rows line the right side of the canal. on the left is an apartment building separated from the water by a medium-sized tree. small boats are moored to the sidewalk in the distance. you can barely see a metal bridge just beyond that. it’s nice that there are so many different ways to get to the same place.

Organizations built in systems of racism are difficult to transform into something anti-racist. It’s so easy to remain stuck in what’s come before. Some systems are so dysfunctional that they won’t reform without dedication and resources. The ideal organization might not exist yet. Chances are that I won’t be able to create one, either. I carry with me all the lessons I’ve learned throughout my life and career. The same would be true for all my colleagues, co-founders, advisors. That awareness can help us spot easy patterns and avoid them whenever possible.

With all that in mind, I want to try creating a new organization that serves a public good. I can be intentional about my goals and work with people who align with these intentions. I’ll start by researching different organization types in the united states. Each type I’ll review ostensibly exists to serve the public good.

Caveat: I’m doing the research but I’m not a lawyer (my first draft misspelled “lawyer”). This is a post about starting a 501(c)(3) written by someone who has never started one. It’s important to me to state this caveat up front.

my organization goals

Here are a few thoughts I have about the type of organization I want to create.

  • I want the organization to be worker-led or employee owned
  • I want the organization to exist within the community it wants to support
  • We’ll use many Teal Organization principles at startup. We’ll be free to adapt our approaches considering a pretty basic “do no harm” principle
  • I want the people or teams to function in cooperation or collaboration
  • The organization will run without a hierarchy. This does not mean flat or directionless! Everyone has distributed decision-making authority within their area of work. We’d discuss larger decisions as a collective and choose a person to make the decision.
  • We’ll use the advice process for all decisions. That means anyone can identify a problem and come together with others to solve it. Consensus is not necessary
  • The organization will be explicitly anti-racist

That’s a good start for now.

501(c)(3)—what is it?

Most organizations in the united states that serve the public good do so as a non-profit. The IRS designated these organizations as a 501(c)(3) in their tax code. Most 501(c)(3)s operate as a public charity or private foundation. There are a handful of other options that don’t apply to this exercise.

Charities with a religious affiliation are exempt from filing here. The same goes for charities that receive less than $5K per year.

how do you do it?

Starting a 501(c)(3) means completing IRS form 1023, plus related paperwork. The steps below come from that massive form and from a page on donorbox.

1. Organize – establish as a corporation. Register with the secretary of state as a non-profit. File the IRS paperwork. Establish a board of directors. Create bylaws for how the board will operate. Write a narrative of the activities the 501(c)(3) will perform.

During the process of incorporation, these sources recommend a few other steps. These steps are not required at first but will be good to document. Define the organization’s mission and purpose. How will you generate revenue?

2. Operate – once you’re up and running. You can’t intervene for or against a referendum, initiative, or political candidate. Routine reviews and audits could happen throughout the life of the non-profit. This depends on the size of the organization, the activities, and any financials.

what’s good

The 501(c)(3) is a common approach to a non-governmental organization. The startup costs are nominal and the application is 28 pages long. The most common sources of revenue for a 501(c)(3) are grants and donors. Solving a well-understood problem or doing good work can help drive donors to you. There are plenty of grants offered by the government, foundations, or other non-profits. Grant funding usually requires a skilled grant writer or prior connections to the funder.

what’s good to avoid

Non-profit organizations are a capitalist approach to good works. Even though profit isn’t their goal, they need large and recurring sums of money to operate. This can create an unhealthy relationship between the 501(c)(3) and their donor class. Philanthropists can hide their money in a pet project instead of paying taxes.

Non-profits often replace functions that the government should be doing. This phenomenon is sometimes called the non-profit industrial complex. In the world of food access, food banks and SNAP perform similar roles. But even with multi-billion dollar food bank networks, SNAP helps 9 times as many people. It’s also much more convenient. With more funding, a system that people already use could be made more useful. I’ve heard of legislators try to pass SNAP cuts by sending some of the cuts to food banks. They might pose at a food bank to pretend they aren’t heartless.

Conventional wisdom on good governance means recruiting board members from related for-profit industries. Their guidance may not apply, but they fit the goal of running a non-profit “like a business.”

Another area of criticism is the outdated focus on overhead. These are costs like staffing, supplies, and other resources. Intuit recommends a 501(c)(3) spend less than 10% of their revenue on overhead and no more than 35% of their receipts. Donors shopping for a good cause might find themselves comparing charities. They may assume our high overhead means we spend their donations on bloated salaries. Community-Centric fundraising described this in a recent article that I liked.

Finally, 501(c)(3)s can’t advocate for or against a referendum,  initiative, or political candidate. Doing so could jeopardize their tax status and make all donations non-tax deductible. This seems easy enough to follow, but support for people with low or no income is now a political issue. I don’t want to limit strong positions as a policy briefing or neutral press release.

closing thoughts

When most people think of public service, they’re thinking of a non-profit 501(c)(3). The donor and board centered approaches I described are pretty common. This is especially true among well-established or long-running organizations. It will be easy to happen into those traps.

As I get started I will have to custom-build every policy and approach. When the organization grows, we may hire workers from other non-profits. That means they might infuse outdated practices or approaches from white-dominant culture into this new system. We would need to create strong foundations and clear values to nudge staff away from these practices.

just stay alive

a photo of a woman ziplining across a canyon outside Salta, Argentina. the woman's sweatshirt is all white, pants are a tan color. she is wearing a yellow helmet that long dark hair is laying out of. her right hand is in a heavy glove, holding a thick metal cable. her left hand is holding the harness and pulley wheel contraption that connects her to the cable. she is hundreds of feet above a placid river, with steep mountains on either side. scrub grass and bushes speckle the brown desert floor below.
a photo of a woman ziplining across a canyon outside Salta, Argentina. the woman’s sweatshirt is all white, pants are a tan color. she is wearing a yellow helmet that long dark hair is laying out of. her right hand is in a heavy glove, holding a thick metal cable. her left hand is holding the harness and pulley wheel contraption that connects her to the cable. she is hundreds of feet above a placid river, with steep mountains on either side. scrub grass and bushes speckle the brown desert floor below. i know it looks high up. it was! but the scariest moment is when you’re the furthest from both sides.

I had a great chat with my friend Clara recently. She and her friend Melo are the hosts of a podcast, Intersectionality in the Diaspora. We talked for a while about our experiences surviving predominantly white institutions (PWIs). We discussed the harms that they can visit on BIPOCs existing in all parts of society. It was a satisfying conversation! If you would like to listen, it’ll link to it once the podcast goes live.

Preparing for the podcast helped me clarify my thoughts on survival. I’ve talked about the webinar series I took hosted by artEquity: BIPOCs surviving PWIs. Over the course of five sessions, the speakers and participants shared many of their own experiences at a PWI. Their perspectives led to a single unblinking message: get out!! Prepare the resources and the network you will need to survive without them. Leave your PWI while you still can.

I struggled with the idea that a series on surviving PWIs was telling me there is no survival. But their arguments were persuasive. For many BIPOCs, staying in a PWI means a career of feeling undervalued, tokenized, or othered. We in PWIs recognize that we may spend a lifetime performing work that we aren’t paid for. Dr. Adia Harvey Wingfield writes about the “racial tasks” that companies ask of workers of color. These tasks reinforce racial hierarchies, maintain the status quo, and limit the impacts of revolution. This stress creates a debt that compounds and is never repaid in full.

These truths have been turning over in my mind for weeks now. I’ve written a handful of essays on this site where I process my thoughts. I started out rejecting those ideas. Why should we abandon all these systems and structures of power? How can they make the progress we need without us? And the money! They have immense networks of donors that may not be available to a person of color just starting out. How are we supposed to pay rent? Even as I processed this, I knew on some level they were right. I also knew that the other side’s grass is a hypersaturated green. It can’t be that good. Right? With all that in mind, I wanted to make a case for both worlds.

for those who stay in a PWI

Predominantly white institutions are all around us. They are the beneficiaries of centuries of unequal power and outsize influence. No matter how good we are, they won’t all implode this year. So how can we live with them?

why you’d want to

For some people, staying in a PWI can feel like seizing the means of production. Here we have a sturdy institution that we know can move. Organizations are people, people are malleable. If we know that all organization must adapt or die, then adapting to a racially just world is in both our interests. There are places to find common ground. For the people who are willing to teach, there are leaders in PWIs who are ready to learn.

what you need to remember

With all that said, you have to remember what you are signing up for. The progress will be slow. There will be months or years where the best you can hope is to be pleasantly surprised. There are leaders out there who’ve never considered these things. And in an instant, they can change their deep-seated beliefs. I’ve worked with groups that one day realized their complicity with white supremacy. For the BIPOCs in their world, this must have felt like some kind of liberation. But those stories are also rare.

Staying at a PWI demands patience and understanding. It’s well-documented that we are changed when we navigate worlds that aren’t made for us. For those of us who dream of a new world, our goals won’t always align with theirs.

With all that said, I have to be really honest here. The longer we work in the systems that were built to oppress us, the longer it will take before we’re free. I grew up internalizing the “twice as good” rule. What I’ve learned is that even after a decade doing what I do, I am still setting my own performance expectations that high to be seen as worthy. And it is still not enough to bend the perspectives of the people holding the keys.

Existing in this structure my whole life still has me believing that I can smile and paint a positive outlook on this approach. I can’t. The people who can will retire at 85 still waiting for someone to save them. I created this website under the belief that the real savior, like a movie with a time travel loop, has to be us (those movies are incidentally my favorite).

No matter where you are or how entrenched you feel, you need to get out. PWIs will eat you alive before they realize you’re even there.

while we’re here, we can:

  • work to understand and refine our goals and intentions
  • radicalize our coworkers and employees
  • speak up! using whatever voice we have
  • support unionization and efforts that create a collective consciousness among staff
  • create a bubble of safety and support and invite fellow BIPOCs in

why you might reconsider

If you can do this, do it for a long as you can. Know that if you do leave, your habits and instincts will carry with you the lessons of your PWI. But also know that leaving is not a failure. Know that any progress you have made is its own success.

for those who leave

Everyone knows the Audre Lorde quote! The place we want to go, we can’t get there from here. PWIs that fear change will survive the longest by maintaining the status quo. No matter how hard we try, it’s too tempting to undervalue workers. This creates its own trauma. If we want real liberation, we will have to do it ourselves.

why you’d want to

The clearest path to liberation is to reject the status quo and make something new. It might not be perfect. There are other donors out there. There are other people who are looking for better things. Reject the low valuation of your worth, and help others find their own future.

You don’t have to start your own organization to get out. BIPOC-led or BIPOC-centered institutions are out there. The jobs may be more scarce because they’re more in demand. And they aren’t always as large, but they still have impact. Many of our colleagues start out as single-person consulting firms and grow from there. You have the power to create something that has a real impact within your community. Your work has the potential to grow, and to go far.

At a PWI, you may be spreading messages you don’t agree with, while trying to get slivers of your ideas into them. Leaving that PWI means you can spread the messages and ideas that hold value with a new audience. Rather than grinding yourself to dust, you could help create authentic, satisfying outcomes.

what you need to remember

Working on your own is not easy. Don’t set out without preparation, because our racist and capitalist society has a specific type of intolerance for BIPOC failure. Know that it is difficult, but remember that it’s necessary. Right now, I don’t know if I’m ready for the hustle or ingratiation required of a full-salary consulting gig. One person in the Surviving PWIs session shared that she was grateful to be on her own and out of the education PWI she used to work at. But now, as a consultant, she works with the same people she was happy to escape.

Even if you leave a PWI, there will always be people who can’t. People who are more junior in their careers. People who need the stability of a steady paycheck from well-established donors. Leaving a PWI doesn’t mean leaving the BIPOCs who are in them. Work with and support each other. Know that they may feel trapped even though they can see you’ve wriggled free.

while we’re here, we can:

  • mentor people at PWIs, and show them what’s possible
  • help people see that the water isn’t as deep as they might fear
  • educate your clients on concepts they couldn’t hear when their BIPOC employees first said them
  • share and refine your ideas with like-minded folks
  • grow your organization and hire in all the ways you wish PWIs would

why you might reconsider

For some people who leave, liberation at first might mean sleeping on a friend’s couch. If that works for you, do it. Not everyone can make that choice yet. It’s horrible that we live in a world where we can’t strike out on our own without connections or a trust fund. No matter where we are right now, we share a common goal.

just stay alive

I oscillate between wanting to be in both of these camps. I’ve seen and felt the impact that I’ve had in PWIs. These accomplishments might not have been possible if I was standing on the outside. I also know that the longer I’m in, small victories feel enormous. I look at my career and feel the changes I’ve made for the causes I believe in. But wouldn’t it also be amazing to work for those causes full-time?

The victories I’ve had in PWIs are also in some ways half-measures. They came with compromises, costs, and delays. By the time we get the nation to a $15/hour minimum wage, the minimum wage adjusted for inflation should be $22/hour.

No matter where we are, we have to do our part to reject white dominant culture. That culture indoctrinates us to believe there is only one right way. We know this is false. There are as many solutions to a problem as there are paths to justice. For as long as someone is trapped in a PWI, there is still work to be done. For people who have gotten out, the work is different but the same. No matter where we are or who we report to, we must keep walking forward.