Deborah had a passion for helping people. Her heart went out to whomever she saw in need. Her natural inclination was to rush in with an offer and hand of help. But often, or nearly always, she felt helpless to actually make any difference when she saw someone who needed help. Deborah didn’t feel as if she had any particular program, resource, or skill that might make a difference in the lives of others. She wanted a talent, program, purpose, or personal gift but didn’t seem to have one. Then one day, she realized that her gift might be in her willingness to help rather than in any talent, vision, or skill. Maybe willingness was exactly what she needed to form and lead a 501(c)(3) organization.

Purpose

To qualify for 501(c)(3) tax-exempt status, charitable organizations must have a charitable purpose. More detail about that subject appears in the following chapters. But your 501(c)(3) organization must have something that looks, smells, or tastes like a charitable mission, or the IRS examiners who review your 501(c)(3) application may just say no, you don’t get the tax-exempt status because they can’t tell anything reasonably specific about the charity you intend to do. IRS examiners look closely at your organization’s purpose clause to determine whether your organization qualifies for the advantages of tax exemption. Your organization needs a purpose that suggests if not outright shouts charity.

Clarity

It’s not just the IRS who needs to know your charitable purpose. It’s also your donors, volunteers, staff members, the needful patrons whom you hope to serve, and you. You and everyone else connected with your charitable dream need to know, with reasonable specificity, what you plan to do. Without clarity around your charitable purpose, you’re unlikely to attract donors. Donors give to charitable causes for the good things that the charities plan to do, not to make friends or influence people. Your organization’s purpose needs to connect with the hearts of donors. It also needs to connect with the needs of your organization’s patrons, those whom your organization hopes to serve. Otherwise, you won’t find any patrons to serve. They won’t know what you can do for them and why they should contact and trust you. The same is true for your organization’s volunteers and staff members. They, too, need to know their purpose in working with you. And if you don’t know your charitable mission, well, then you won’t know what to do.

Tragedy

How, then, do you discover your charitable purpose? Many of the clients whom my pro bono service and student volunteer project helped form 501(c)(3) organizations, and qualify them as tax exempt, knew exactly what they wanted to do. Their charitable visions often arose out of a personal experience. Sometimes that experience was a personal tragedy where they had a sudden great need for help. As previously mentioned, I’ve helped quadriplegics form 501(c)(3) organizations to help other suddenly severely disabled individuals. I’ve also helped a parent of a mysteriously severely ill child form a 501(c)(3) organization to help other parents of children with severe undiagnosed illnesses. I’ve likewise helped abused women, recovering alcoholics, men recovering from pornography addictions, and (as previously mentioned) homeless individuals form 501(c)(3) organizations to help others struggling with their same or similar problems. Personal tragedy can be a strong and clear inspiration. Consider drawing on your challenges for your charitable purpose.

Inspiration

Other times, though, inspiration for a charitable organization can come from a personal gift, talent, or inspiration. Some of the clients whom my students and I helped had obvious personal gifts. They were dynamic speakers and visionary thinkers in their fields, with a crystal-clear vision for how to help people with what they knew and could do. Others had a special resource, like a plot of land for a charitable activity, empty building to house a charitable service, or windfall nest egg to fund a charitable cause. Others already had special relationships with the disadvantaged population whom they hoped to serve with their new charity. They were nurses caring for vulnerable patients or instructors teaching minority students through their day jobs. They simply had a good idea for how a charitable service could help their charges and wards even more. Consider drawing on your talents, gifts, and resources as inspirations for your charitable purpose.

Populations

As the prior paragraph suggests, your charitable purpose might also focus on helping a disadvantaged population. Identifying that population can be the key to achieving clarity in your charitable purpose. Whom are you trying to help? Answer that one question, and you may have the core of your charitable purpose. Clients whom I have helped form 501(c)(3) organizations did so to help populations like unwed pregnant teens, inner-city kids without fathers, and families with severely disabled children. The needful population whom you hope to serve can be broad, like single parents or the elderly homebound. Or your population can be narrow, like middle-school children needing academic remediation, homemakers without budgeting skills, or wheelchair-bound youth with an interest in hunting. Your population can even be as specific as drunk bar patrons needing a ride home at closing time. I’ve helped clients form charities serving all those populations and many others. Be sure that you can picture the people whom you hope to help. The better you know them, the clearer your purpose and the greater your likelihood of success.

Needs

Your charitable purpose, though, shouldn’t be to just help any population with which you have an affinity. Generally, 501(c)(3) charitable organizations serve populations that have unmet needs, referring to needs for which commercial, for-profit businesses are not offering products, services, or solutions. From the policy standpoint, filling unmet needs is the essential purpose of a charitable organization. Congress grants charities special tax relief because charities fill one of the several functions of government, to provide critical or beneficial gap services and safety nets where the business sector can’t or won’t do so. Indeed, charities often lead the way in showing businesses how to serve emerging new needs. Once charities show how to do it, businesses can step in, adopting, refining, and improving the charitable goods or services and their efficient delivery. So, to clarify your charitable purpose, think of the unmet need your organization will fill.

Disadvantages

Charities also often serve populations that have relative disadvantages. Look at the example populations just given above. They all have some large or small challenge or disadvantage that distinguishes them from the general population. Pregnant teens, kids without fathers, families with severely disabled children, single parents, the elderly homebound, wheelchair-bound youth, and even drunk bar patrons at closing time in the middle of the night are all in some form of precarious or challenged position, where a charity could step in to help. The disadvantage doesn’t have to be frank or rank oppression. Genteel societies bringing literary diversions to bored wealthy patrons, or youth soccer groups increasing recreational opportunities for pampered suburban youth, can be appropriate charitable populations. Yet when clarifying your new organization’s charitable purpose, think of your population’s disadvantage. 

Markets

The prior points suggest something about which you may not yet have thought. In commercial, business, for-profit endeavors, entrepreneurs research markets before starting out. Entrepreneurs research the identity, size, needs, and location of the customer or client demographic for their new product or service, and how to deliver that product or service in the right package at the right price. That market research can go a long way toward testing and proving their likelihood of success, before they even launch their new business. Charitable organizations aren’t businesses or commercial entities. Charitable organizations do not generally compete with for-profit businesses for market share, or at least they are supposed not to do so. Instead, they exist to fill gaps in markets, where a competitive market does not yet exist. But you can still clarify your charitable purpose by something very much like market research. 

Research

As just suggested, research around your organization’s charitable purpose can help you refine and clarify it. Once you identify the population you hope to help, try to find government or other reliable information on the population’s size, location, age, household income, and other relevant characteristics. Once you determine the unmet need you hope to fulfill, try to find information on the percentage of your organization’s service population that has that need. Research how the population is already filling that need in part or trying to do so. Find out who else is already trying to meet that need, even if it is other charitable organizations. Summarize and analyze your research in a written document that you can share with the donors, volunteers, and staff members you hope to recruit. Use your research to refine your organization’s charitable purpose.

Possibility

Another good question to ask about your organization’s proposed charitable purpose is whether meeting it is even possible. Some of us dream strange dreams and have strange visions, ones that are very unlikely to come to fulfillment or fruition. Don’t chase after windmills. In my pro bono (free) legal service to clients interested in starting a 501(c)(3) organization, I met with individuals whose ideas I knew to be preposterous, so much so that I wondered whether they truly believed in the ideas or whether their proposals were a veil for planned charitable fraud. Yes, people use charity scams and schemes to defraud donors. An uneducated, unsophisticated, homeless individual who wants a new 501(c)(3) organization to develop a nationwide network of hydrogen pumps for clean vehicles or become a next-generation telecommunications provider, either venture requiring billions in start-up capital, is probably chasing an impossible dream or may be pursuing a fraud. Make sure that your charitable mission is at least remotely possible. I’m not going to throw cold water on anyone’s dream. But I’m also not going to help a fool chase after windmills or a scammer perpetrate a fraud.

Sensibility

Another good question to ask is if your organization’s proposed charitable mission is sensible. Helping disadvantaged populations with their unmet needs can take real ingenuity. It can take new and insightful plans. But don’t get too crazy with your plans. Your plans to provide helpful goods or services to a needful population should at least make basic sense. Not every charitable dreamer has that basic sense. I’ve had pro bono clients consult me about some frankly wild charitable plans, plans that might well have been achievable but still just looked like they made no real sense. My memory may be poor or my imagination may be florid on that subject, but I recall one client proposing to sell boxes of cigarettes smuggled across state lines, to fund a charitable smoking-cessation program. Does that make sense to you? Me, neither. But still, I’m not one to throw cold water on sound, if also creative, plans. One client who wanted to take wheelchair-bound kids out in the woods hunting and out on boats fishing, and another client who wanted to take inner-city kids up in airplanes to stimulate interest in aviation careers, both seemed to have pretty far-fetched plans. I helped them anyway, and their 501(c)(3) organizations were both incredible hits. Go figure. Make a sensible plan, but also pursue your charitable dream.

Challenge

The prior stories suggest another good guide for choosing or refining your organization’s charitable purpose, and that is to make it suitably challenging. Don’t do something that anyone can do. And don’t do something just because it’s easy. Instead, do something that only you can do. And do something reasonably difficult, hard, or even dramatically and inspiringly challenging. Don’t glide; instead, soar. Don’t drift down a lazy river; instead pull hard against the current. Choose a purpose and pursue a story that inspires you, your organization’s donors and volunteers, and those whom your organization serves. Be a beacon of hope, imagination, courage, grit, perseverance, and creativity. Inspire your friends and family members, improve your community, and leave a rich legacy of charitable service. The goals, ambitions, clarity, and purpose of the many clients I’ve had the privilege of helping form 501(c)(3) organizations continues to stun, hearten, and inspire me. Their charitable successes do even more so. Your charitable success is out there somewhere. Define and clarify your purpose diligently, to increase your likelihood of reaching it.

Key Points

• Your 501(c)(3) organization must have a charitable purpose.

• Clarity in your charitable purpose helps donors, volunteers, and you.

• Your charitable purpose may arise out of your personal experiences.

• Your purpose should name the population you intend to help.

• Your purpose should also identify the need you intend to meet.

• Research your population’s demographics and needs.

• Discover how other charities may be trying to meet the same needs.

• Make sure your charitable purpose is sensible and possible to fulfill.

• Choose a purpose inspiring to donors, volunteers, and you.

Read Chapter 4.