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All About Logistics: 5 Things to Think About After Forming a New Organization


By Erin McClarty

I'm in the throes of preparation for the Social Enterprise Alliance (SEA) National Summit in April, and while brainstorming I got to thinking about just how universal all organizations are.

We spend alot of time differentiating between exempt organizations, social enterprises, hybrids, traditional for-profits and the like. When in reality, the number of similarities is staggering. Similarities in challenges. similarities in concerns. Similarities in exposure. And to me, the biggest similarity is that feeling of "What am I not thinking about?" that all founders inevitably encounter after start-up.

Not too long ago I wrote a post about the top five things nonprofits should think about before forming. But I want to take it a step further and highlight a few things that all founders should be thinking about shortly after creating an entity. Be it a church, association, social enterprise, hybrid or for-profit corporation.

1. Taxes

The moment an organization forms it becomes subject to taxes. Aside from federal income or employment taxes, there are also state and local taxes such as property taxes, use taxes, franchise taxes, etc. Your best friend will be the IRS site (trust me, it's actually a pretty good site) and the sites for your state and local tax authority (ties).

Use the IRS site to guide the setup logistics in a way that maximizes deductions. If there are local tax exemptions you fall under, find and apply for these as soon as possible. Otherwise, you'll end up paying for taxes that could have been avoided. Oftentimes, there are also local initiatives (community rebuilding, organic gardening, etc.) where you may be able to get tax breaks. I also find it beneficial to create a tax calendar detailing when certain taxes are due.  Especially since I doubt the first thing you'll wake up thinking is, "Hmmm, what taxes am I responsible for today?"

2. Permitting

So impactful, but always an afterthought. You may be surprised how many permits the things you want to do might require. Occupying certain buildings, working out of certain areas, making certain services mobile, cooking in or for the public, selling, handling and disposing of certain items...these all could require different licenses, permits or filings. Many cities (Houston is one) have an office that educates businesses on what types of licenses or permits to think about and how to go get them. After all, I would hate for you to invest in snazzy promotions and send something to all your Facebook friends only to be shut down.


You have Skype, Google Chat, Dropbox , Twitter, Androids, iPhones, yada, yada--all of which make it easier for teams to work together. But the problem becomes policing. What happens if an important document is needed, but it's on your ex-partner’s personal computer...the partner that you made mad six months ago and no longer talks to you? How many times have we read about employees losing computers that end up getting hacked?

It's important to set ground rules from the start. First, decide whether there is a preference for the devices used. If work devices are issued, make it clear to everyone that there is no expectation of privacy. Have a document retention or destruction policy drafted that outlines things like where documents must be saved, how and with what titles. If applications or accounts are opened, require passwords be centrally kept. Lastly, rotate out the responsibility for social media accounts to avoid losing an awesome Twitter feed due to questionable ownership.

4. Volunteers and interns

There are a few laws in place to protect organizations from volunteer liability where they are formally created (for example a corporation) and exempt in nature. The picture becomes a bit hazier when you start talking about social enterprises. And since insurance policies have started to resemble ancient manuscripts taking a "let insurance handle it" attitude, it could be dangerous.

The best line of defense will be identifying and managing the risks. If you operate in incredibly dangerous areas, or do incredibly dangerous work, why not leave some of that up to employees? Mrs. Weatherston wanting to deliver rations to a military zone in a developing country is noble. But she can be just as helpful assisting staff administratively.

Put policies in place detailing how volunteers are recruited, trained, used, disciplined and removed. Nowadays, organizations like VolunteerHouston will also help run background checks on volunteers.  If volunteers or interns will be around money, rotate them out and train them. And if you've somehow missed the THOUSANDS of articles about the dangers of using interns, read up on JDSupra and the IRS website. There are ways to appropriately set up and manage the arrangement that help you avoid getting sued.

5. General ops

Think about the risks in what you do as bread-and-butter. If delivering some type of energy or medical supplies, your supply chain is key. If a vendor screws up a delivery, your customers aren't coming after them. They're coming after you. Do you have the appropriate diligence in place for new vendors? What do your contracts say? I assume you, in fact, have contracts in place. If you don't, then just imagine me glaring at you right now.

How are your logistics set up? Are they done in a way that puts you at risk for losses or damage that isn't your fault? Do you have protocols in place that avoid you procuring items from sanctioned countries or people? Organizations don't realize how incredibly easy it is to slip up.

These of course are just the tip of the iceberg. Lucky for you, identifying and managing these things is what my presentation will be on at the Social Enterprise Alliance Summit in April. So now you have that much more incentive to go. But in the end, I always tell people the point is to identify as many exposures as possible and come up with resourceful ways to monitor. The key is awareness.

Erin McClarty  is Legal Counsel for a Fortune 300 company by day and a nonprofit advocate by night. You can read more about trending legal issues, her work and upcoming speaking events on her blog www.notationsonnonprofits.com, or hear her speak in person at the upcoming Social Enterprise Alliance Summit ‘14.

3p Contributor

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