Most groups are incorporated as 501(c)(3) non profit corporations and obtain tax-exempt status at the state and federal level, allowing donors to claim tax deductions for their contributions.
Many, but not all groups use the term "Friends of..." in their corporate name, e.g. The Yosemite Fund, The Statue of Liberty-Ellis Island Foundation, Rosie the Riveter Trust, Golden Gate National Parks Conservancy.
Friends Groups are generally defined as nonprofit, 501(c)(3) tax-exempt organizations established primarily to support a specific park area or a group of parks. While these groups vary in size, structure, and priorities, they all operate in partnership with parks under a formal written agreement. Friends Groups benefit parks in various ways, such as conducting fundraising efforts, providing volunteer services, assisting with resource management and preservation, and publicizing important issues. While some Friends Groups also function as Cooperating Associations, the two terms are not interchangeable as only Cooperating Associations have the legal authority to operate park bookstores. One reason many of these hybrid organizations are created is that a success factor for nonprofits is to be able to attract both earned and contributed income. Cooperating agencies have earned income streams from park sales of interpretive publications and products while Friends Groups are limited to offsite sales.
While there may be a multitude of organizations named “Friends of” a national park, to be considered a bonafide Park Friends Group, a Friends Group Agreement or at minimum a project specific relationship agreement must be in place between the NPS and the friends organization. This agreement is the tool used to authorize the public association of the group with the park it supports in a way that assures donors, members, and the public that their support of the organization supports the work of the NPS.
This discussion is intended to serve as a frame of reference and guide for establishing and working with successful Park Friends Groups.
The difference between success and dysfunction in relationships between Parks and Friends Groups is largely determined by clarity of need, leadership, alignment and mutual respect and support. The Park staff and Friends Group Board need to be prepared to invest in creating and sustaining a productive relationship.
Birth of a Friends Group: Friends Groups can grow out of a community perception of a need or their creation can be triggered by conversations between a park superintendent and community leaders. In either case the very first question the community champion and the park liaison must answer is "What do we want the Friends Group to do to support the park?"
The second question to answer is "Who should be on the Friends Board to make the right things happen and how can we enlist their participation?"
The third question is "Is the Park leadership and staff willing to invest the time up-front, and for the duration,that it will take to ensure success in getting the Friends Group up and running and working with the park?
Once a decision has been made to pursue the idea of a Friends Group, the community champion and the park liaison will need to:
- Decide what you want the Friends Group to be and do. Put it in writing as an initial draft and then involve park and potential Friends in refining the vision, mission, goals and work plan and taking ownership.
Friends Groups around the service have served in a variety of roles. It is good idea to start with the highest priority roles although you may want to concentrate on the roles that might provide the most opportunities to develop roots and credibility in the community. Most Friends Groups assume additional roles as they mature and have more capacity to take on additional challenges.
Realistically, Friends Groups cannot be all things to all people. To be effective, their efforts must be carefully focused and defined. Some examples include:
Decide on the name for your Friends Group. Choose wisely. You want a name that communicates a place or program that people would be motivated to support. A good rule of thumb is to include the park or park cluster's name. You are establishing an identity and a brand that you want people to remember and make a positive association with. The name should convey that you are an organization that people will give to versus one that suggests that you make grants. Choices include: Friends of ...., Conservancy, Trust, Fund, etc.
Recruit a sparkplug and founding board of 3 or 4 people. A sparkplug is a person who has time, energy, vision, persistence and can instill that in others. The "time available" factor is very important. Often a recent retiree with business and organization skills is good. Sometimes you can pair a leader with an “implementer.” You need "Doers" who will pitch in and help share the workload. Personalities are crucial. You need people you can work with and who can work together and with others. Always get a lawyer and financial/accounting person on the founding board to assist with legal matters and fiduciary responsibilities. This founding board must be willing to be named as board officers - President/ Chairperson, Vice President, Secretary and Treasurer.
- Raise Program/Project/Capital/Operating Funds- Friends Groups can solicit funds. NPS employees may not solicit funds. While NPS can accept donations, many donors are more comfortable giving to non-profits rather than government agencies such as the National Park Service or a National Park.
- Develop Facilities/Grounds- Requires close coordination and oversight by NPS to ensure that the completed project conforms to park design, environmental, accessibility and standards.
- Involve Community- A Friends Group may have more access to the broad community itself as well as underserved sectors of the community than park employees.
- Market Research and Awareness Building - May have access to pro bono media and expertise. Can leverage or augment in-house staff capability. Can help design and produce park awareness and branding materials which can also be a source of earned income. Can function as a liaison with the community and be a voice for park resources and values within the constraints of their tax exemption status. Need to weigh reinforcing identity for the park and the Friends Group.
- Staff Support- Foundation staff can supplement public agency in-house staff capability either by hiring staff or by supporting NPS staff. Note: There are restrictions on NPS hiring permanent positions that are supported by donated funds.
- Operate and Maintain- Some Friends Groups take on all or portions of operation and maintenance responsibilities for structures or portions thereof, parks with a legislative mandate, or specific programs.
- Program Delivery and Event Staging- Can assist special programs and events under permit from the park or off-site.
- Procure Equipment/Services- Can acquire and donate equipment.
- Recruit and Manage Volunteers- Can recruit and manage their own volunteers or can help the public agency to manage its volunteer program.
- Acquire Land- In most cases, a Park Friends Group would assist through raising acquisition funds. Other non profits such as land trusts, the Trust for Public Land and the Nature Conservancy specialize in land protection and have the requisite expertise.
One successful Board established Co-Chairs. In these days when your best prospects often lead busy lives, people are more willing to share a responsibility than take it on single handedly. It also allows you to pair up someone with a high profile and limited time with someone who has more time available to follow through on tasks such as recently retired executive.
This is a good time to revisit the vision, mission, goals and work plan. It will allow the founding board to invest in the organization and take ownership of its purpose.
File to incorporate. The Foundation Center identifies 12 tasks you will need to accomplish as part of the process of establishing a nonprofit organization
- File the certificate of incorporation
- Select individuals to serve on the board of directors
- Develop vision and mission statements
- Establish bylaws and board policies
- Obtain an employer identification number (EIN)
- Open a bank account and establish check signing procedures
- File for federal tax exemption
- Follow state and local nonprofit regulations
- Find office space and obtain office equipment
- Recruit staff and prepare a personnel manual
- Establish a payroll system and procure necessary insurance coverage
- Develop an overall fundraising plan
As noted above, the first step is to draft the legal incorporation document--the "certificate" or "articles" of incorporation--and filing the document with the appropriate office within your state government, usually the office of the Secretary of State or Attorney General although some states house this function in the Department of Consumer Affairs, Administration, Business Regulation, Commerce or Regulatory Licensing. We will refer to this office as your state's charitable registration office. A good source for determining where to file in your state can be found at the website for the National Association of State Charity Officials: http://www.nasconet.org/agencies. The Foundation Center notes that in some states, approval must first be obtained from any state agency that will be regulating the proposed programs of the nonprofit organization.
Before the articles of incorporation are completed, you will need to determine the name of the organization, where the organization will be headquartered, and its overall purpose. When preparing the "purposes clause," remember to state the goals of the organization broadly in order to provide program flexibility in the future, and do not include purposes that will trigger state agency reviews of the proposed incorporation unless your organization in fact plans to conduct those programs.
In addition, you also will need to make a decision whether or not your nonprofit will be a membership organization. Members may have significant rights with respect to internal governance, such as the right to elect and remove directors, vote upon changes in the structure of the organization and amend bylaws. While there can be significant benefits to forming your corporation as a membership corporation also imposes legal obligations in preserving the rights of members to participate in the corporation's governance.
Additional guidance on creating a nonprofit can be found on the websites of the IRS.
In addition, BoardSource has a free e-book on starting a nonprofit, see: Starting a Nonprofit Organization: Turning Vision into Reality: http://www.boardsource.org/Knowledge.asp?ID=2
Many states have associations of nonprofit organizations which have state-specific information available, see the State Association Directory at the National Council of Nonprofit Associations to learn if there is one in your state: http://www.ncna.org/index.cfm?fuseaction=Page.viewPage&pageId=641 . Some of these associations have training programs on starting a nonprofit that are worth investigating.
Much of this section was taken from the article, "Legal Aspects: Cutting the Red Tape," from Starting and Running a Nonprofit Organization, Second Edition by Joan Hummel (Univ. of Minnesota Press, 1980, 1996) pp.31-33. It was augmented by information on the websites of the Foundation Source and the National Council of Nonprofit Associations and the Free Complete Toolkit for Nonprofits.
Although articles of incorporation are specific to the work of an organization and the state in which it is incorporated, the information required for the articles of incorporation generally includes the following items.
- The name of the corporation.
- The purpose of the corporation.
- A statement that the corporation does not afford "pecuniary gain," or profit, to its members.
- The period of duration of corporate existence, which may be perpetual.
- The location, by city or community, of its registered office.
- The name and address of each incorporator.
- The number of directors constituting the first board of directors, the name and address of each director, and the tenure in office of the first directors.
- The extent of personal liability, if any, of members for corporate obligations and the methods of enforcement and collection (there will be none, except in unusual circumstances).
- Whether the corporation has capital stock (most nonprofit corporations do not have capital stock).
- Provisions for the distribution of corporate assets and for dissolution
- Whether or not there will be a membership separate from the board of directors. A statement that membership is the board of directors is advantageous for nonmembership organizations. Without such a statement, it could be assumed that the corporation has a separate membership that elects the board of directors.
- Due to Internal Revenue Service restrictions of tax-exempt organizations, it is necessary for a tax-exempt organization to include some language provided in IRS in Publication 557, see that publication for more information.
Required forms for registration are available from your state's charitable registration office.
When they are complete, the articles of incorporation are submitted to the state charitable registration office. A certificate of incorporation will be issued; at that time, the corporation legally begins to exist. The articles will be filed with the state charitable registration office and county registrar of deeds, and the certificate of incorporation will be sent to the organization, usually within a couple of weeks. Amendments to your Articles of Incorporation need to be filed with the state charitable registration office so it is a good idea to keep them basic.
After the organization's incorporation, the first meeting of the directors should be held. During the first meeting, the initial bylaws are adopted, the officers are elected, and any other business is conducted. This meeting is mandatory. State law requires that nonprofit corporations have bylaws and conduct themselves in a certain manner and within certain structural limitations (such as having a board of directors, officers, periodic meetings, financial records and minutes, et cetera). For membership organizations, the law sets out various requirements that are assumed unless stated otherwise in the bylaws. If the organization desires a relatively small, closed base, the "board equals members" concept should be considered. Should community involvement be desired at some later time, the bylaws could be revised to provide for an advisory board or another such body.
Bylaws are the internal, written rules that govern your nonprofit corporation; they define how the organization will be managed and run. They follow from the articles of incorporation and are subordinate to them. Because they can be more readily revised, bylaws are more detailed and deal with more specific issues, for example they identify which staff and staff and board members have authority and decision-making responsibilities and how those responsibilities should be carried out, establish the dates and times for monthly meetings, whether directors will be compensated and if so, how much, provisions for hiring staff, what kinds of transactions directors can carry out between themselves and the corporation, etc.
Your bylaws should include articles that address:
- Name and Purpose of the Organization
- Board of Directors
- Board role, size and compensation
- Meetings and Notice
- Board Elections
- Election procedures
- Officers and Duties
- Title and Management of Property
- Resignation, termination and absences
- Special meetings
- Standards of Conduct,
- Executive committee
- Finance committee
- Director and Staff
- Executive Director
- Provisions for Hiring Staff
- Advisory Board (If you intend to have one)
- Fiscal Policy
- Liability and Limitations
- Dissolution Statement
Your bylaws can be amended simply by a vote of your Board and you can spell out more specific guidance for Board governance and activities and readily update them as needed. It is good idea to review your bylaws every year or so to keep them current. It is also advisable to have your Bylaws at hand to consult during your board meetings as questions arise. Some Boards create Board handbooks including these reference documents so each member has them for ready reference.
Below are links to sample Articles of Incorporation, model Bylaws (2 sets) and a model Record of your Initial Board Meeting. Other examples are available at Foundation Source and the National Council of Nonprofit Associations and the Free Complete Toolkit for Nonprofits. It is also recommended that you check with your state office of charitable registration regarding any state-specific content requirements regarding these documents.
Sample Articles of Incorporation
File to incorporate the founding board as a tax-exempt non profit corporation with the state office of charitable registration. Once your Friends Group is notified by the state that they are incorporated and have been granted state tax-exempt status, apply to the IRS for the organization's Federal tax-exempt status using a Form 1023. To incorporate, a founding board needs to file a corporate name, the names and title of the founding board officers, statement of purpose, articles of incorporation and bylaws with the Secretary of State. There are good models of these documents you can adapt to fit your situation. It will cost $500 - $3,000 to file your papers. If you have lawyer on the Board, they or their firm may be able to prepare and file the papers for you pro bono.
Model Sets of Bylaws
Minutes of Initial Meeting of the Board of Directors
By policy, NPS employees cannot serve as Boards Members for Park Friends Groups, even as ex officio members. NPS employees can and should serve as liaisons.
It is advised to keep the articles of incorporation and by-laws simple to afford the Group flexibility.
Obtaining State and Federal Tax-Exempt Status
Lobbying Limitations in Qualifying for Nonprofit Tax-Exempt Status
Agree on realistic projects and time frames. Park staff articulate the park's needs. The Friends Group uses their creativity and connections to help meet those needs. Park staff must convey what is appropriate in relationship to the National Park Service and your park and how projects are vetted and approved and constructed in parks. A good idea is to test some of these needs out on prospective board members and see which ones generate strong interest.
Make sure other Park staff understand and support the Friends Group mission and presence upfront and are committed to ensuring success. The job of the liaison is to keep them wired in.
Build the board needed to accomplish the work. Each board member selection should be strategic based on the skills and connections your Board needs most. There are a limited number of Board slots to work with. Be selective rather than reactive. Choose strategically. For special initiatives, the Board can establish Advisory Groups or Work Groups to attract people with needed support, connections or expertise. Some people prefer to serve in a less active capacity or for less than a full Board term. For recruiting board members, it's a good idea to have a board member position description, statement of duties/contract that sets forth length of their term, succession process and expected annual contribution. That way, new board members know what the expectations and obligations are up front.
Anticipate establishing Committees of two to five Board members for basic functions - Board recruitment, fundraising, evaluation, etc. They can do in-depth, focused work between full board meetings and report back and make recommendations to the full Board. This is more efficient use of time and skills and allows the Board to accomplish more with less wear and tear on the full Board membership.
Board Member Statement of Agreement
Negotiate a three to five year Friends Group Agreement. This agreement spells out respective missions and reasons for working together, roles, protocols and conditions. It lays out the rules for engagement and authorizes fundraising limited fundraising. When the Park and Friends Group agree that project specific, high dollar value, complex efforts such as a large capital campaign/park construction project should be undertaken they would enter into a Fundraising Agreement.
Plan how the Friends Group is going to pay its expenses from the beginning. The group may decide to use a combination of contributed and earned income. The park may provide some support services until the Friends Group can attract start up and operating funds. Most successful boards have staff supported by annual contributed funds and earned income. A good rule of thumb is that you want to generate earned income sufficient to cover staff costs.
Start up Friends Groups can often attract capacity building grants that can be used to fledge a start up. The investment philosophy behind this kind of grant is that a new organization worth its salt should be able to become financially viable in three years. Most fundraising requires some up front funds.
Likewise the Friends Group startup may have appeal to corporations or businesses willing to donate pro bono expertise, professional services and in-kind donations of supplies and equipment based on their product lines. Examples might be legal, publicity, marketing, accounting, or publishing services.
In conceiving earned income possibilities, the park and Friends Group should discuss the development of marketable products that help communicate the park's themes. The park's chief of interpretation and the concessions chief should be part of these discussions. There may be opportunities for on-site sales working in partnership with parks' concessioner or cooperating association. Local, national and regional distributors can be an excellent wholesale source and outside-the-park retail operations and the internet can provide alternative sales venues. It should be noted that there are start up, inventory, management and marketing costs associated with product development but the rewards can be great.
Anticipate and pursue a mix funding strategies from the outset and make sure the skills you need for this are on the board.
Invest to succeed. Realize it won't happen overnight. Do it right up-front and it will pay off.
Determine Friends Group Board responsibilities for enabling a Capital Fundraising Campaign. If a park anticipates that their Friends Group will eventually take on a Major Gifts or Capital Fundraising Campaign, it is important to understand that these levels of funds are ultimately raised directly by Board Members. Qualified executive and support staff and fundraising consultants play important support roles to ensure the success of these efforts. But the face-to-face asks are mostly made by Board members representing the fundraising leadership who use their community connections and credibility. A basic fundraising principle is that he who asks, must first give. Accordingly, Boards must be fully pledged and giving in the upfront quiet phase of the campaign before lead and major donors are solicited. It is advisable to recruit Board members early on who have the capacity to give and the connections to people in the community who have giving capacity. Asking others to give is a challenge for most. People can learn or be coached to be effective askers if they are willing, fully believe in the fundraising cause, and have first made their own personal stretch contributions/pledges to the campaign. On average, the first 20 to 25 percent of funds raised for a capital campaign are contributed by the Board members. This underscores the need to recruit as many board members as possible with substantial gift giving capacity.
"In successful organizations, the Board of Directors' sight is set steadily on the organization's long-term course and funding for the future," wrote Jerry Clevenger, Vice President of Hartsook Companies in their newsletter, Strategies for Success. "During the planning and implementation of a major gifts campaign, the Board's responsibilities become more important than ever."
Clevenger offers a checklist of 15 responsibilities for Board Members of organizations who are mounting capital campaigns or major gift drives. His basic list is augmented below:
The Board of Directors should:
- Empower staff to organize research on donor prospects, submit written grant proposals and set the stage for donor solicitations by Board
- Envision the future and costs in dollars and people.
- Plan strategically to enable vision achievement with specific goals, actions, timelines and assignments.
- Obtain internal Board and staff support for undertaking the campaign.
- Participate in Board member education offerings. Staff can offer expertise and technical support but is important for the Board to help articulate the fundraising needs and anticipated results of the Campaign.
- Establish an integrated (annual, capital and endowment) campaign goal. There needs to be a strategy for also keeping a focus on the ongoing annual campaign which helps keep the organization operational as the Capital or Major Gifts Campaign gets the spotlight and motivates some donors to make a stretch gift and skip their annual gift. Endowments and Planned Gifts may be a tied to the Capital Campaign goal or continue on a parallel path.
- Establish a campaign budget, plan and timeline. There are definite costs for mounting and conducting a Capital Campaign and they should be factored into the budget. It may be necessary to revisit and update the Campaign goal, plan and budget as more detailed project plans are developed, and fundraising realities evolve.
- Make a personal stretch gift to the campaign goal. This means that Board members will first make a substantial personal contribution/pledge (a stretch gift) and then agree to ask certain of their fellow Board members to likewise commit. The Board will not have the credibility to approach other donor sources until the all the Board has committed their gifts.
- Establish a Campaign Leadership Committee for the Board.
- Identify and recruit campaign co-chairs. Capital Campaigns are multi-year efforts. Co-chairs share the leadership workload and afford coverage if there is a schedule conflict or one has to leave the Board. Most Board members have busy lives and are more likely to agree to a co-chair vs a sole chair responsibility. Continuity during the life of a Campaign is important.
- Establish campaign policies including gift acceptance and recognition policies.
- Hear and evaluate periodic reports from the Campaign Leadership Committee.
- Acknowledge and encourage volunteer efforts.
- Help celebrate successes and participate in related events. It is important to celebrate milestones and incremental successes during the life of an extended Campaign.
- Be a voice for the organization and have fun!
Each of these responsibilities is key to the success of your organization's campaign.
Of course, staff activity during a campaign is also critical to success. The staff, Board of Directors and leadership committee must work supportively of each other as partners throughout the effort. This is an opportunity to solidify your commitment to the organization's mission - then see how much individuals working together can do to change the world!