Seminar Series: How NonProfits Organize and Operate for Sport-Based Youth Development organizations by Professor Rick Arrowood

October 31, 2013

“Have your organizational structure and policies in place: that’s the lesson for your nonprofit.” – Prof. Rick Arrowood

On Thursday October 10, Northeastern’s Center for the Study of Sport in Society hosted a seminar for the Sport-Based Youth Development community on ‘How Nonprofits Organize and Operate.’ The seminar was presented by Dr. Rick Arrowood, JD, faculty member in the Master of Science in Leadership and Master of Science in Nonprofit Management programs.Professor Arrowood presented on the specific operational and organizational aspects of a nonprofit organization, the benefits of a nonprofit organization, and left the audience with valuable advice to implement in their own organizational structure.

To start, Professor Arrowood talked about the importance of “tax-exempt purposes”. To ensure the organization’s status as nonprofit and tax exempt, the federal government requires 501c3-organizations to organize and operate exclusively for one or more exempt purposes. For Sport-Based Youth Development organizations, this means that the organization’s mission, programs and board members’ activities are related to education or charity. To confirm that all activities or events continue to connect to this mission, Professor Arrowood recommends developing a manual when starting an organization. The manual, clearly stating the exempt purpose in its mission, can then be used during a yearly “check-up” on the programs’ alignment with the mission.

Next, Professor Arrowood delineated the process of applying for a tax exempt status on a federal level. “A time-consuming process,” according to Professor Arrowood because it asks you to fill out a 30-page document with “the most detailed questions you can ever imagine”. In return for a tax exempt status, an organization must be transparent about its financial status and should be careful not to jeopardize the tax exempt status. Professor Arrowood advises for example to avoid excessive lobbying, which occurs when a substantial part of a Sport-Based Youth Development-organization’s activity is dedicated to influencing legislation.

Nonprofits generate income from gifts, which are also exempt from federal tax and therefore appealing to donors. A financial surplus can be beneficial, Professor Arrowood explained, because a surplus provides an opportunity for long-term planning, as long as the profit is invested back into the organization’s activities. The organization’s CEO cannot be rewarded a large part of the profit, unless that kind of salary is common for a similar nonprofit organization in terms of size and work.

Professor Arrowood ended his presentation with a Q&A session. Questions ranged from clarifications on the covered information to advice on transitioning from a for-profit into a nonprofit organization. Participants said they gained knowledge on “the structure and oversight of nonprofits”. They also learned “what the state and federal government requires from a nonprofit,” “the key things we need to do to maintain the tax-exempt status”, and praised Professor Arrowood’s presentation skills.

We hereby invite you to the next lecture in the Seminar Series on NonProfit Management Leadership for Sport-Based Youth Development organizations. Professor Arrowood discusses Understanding Human Resources Management and Employment Law, on December 12, 2013 from 12:00PM-1:30PM in Curry Student Center, Room 440, Northeastern University.