Project Create

the biography of a nonprofit

Archive for the tag “Business Model”

It’s Alive!!!!!!

As of today, April 3rd, 2012, Project Create is an active corporation in the state of Louisiana. Project Create officially exists!!!

In a previous post, I discussed some of the legal steps to forming a nonprofit. The first of those steps is filing the Articles of Incorporation with the state. Since Project Create is in Louisiana, that is where I filed. The process is very straightforward, and I was able to complete it quickly online for $65 ($60 filing fee, $5 service fee).

I have included the questions used for online filing. The form can be found at the following link, and by clicking the Domestic Business Reg. Articles of Incorporation ($60 filing fee) radio button: http://www.sos.la.gov/tabid/1009/Default.aspx.

 
  • The name of this corporation is: 
  • This corporation is formed for the purpose of: engaging in any lawful activity for which corporations may be formed under Chapter 2, Title 12, of the LA Revised Statutes (Non-Profit Corporation Law)
  • The duration of this corporation is (may be perpetual): 
  • This corporation is a nonprofit corporation.
  • The location and municipal address (not a P.O.Box only) of this corporation’s registered office is:
  • The full name and municipal address (not a post office box only) of this corporation’s registered agent(s) is/are:
  • The full name and address of each incorporator of this corporation is:
  • The corporation’s initial board of directors, municipal addresses (not a P.O. Box only) and term of office are:
  • This corporation is to be organized on a non-stock basis.
  • Other Provisions:
 

As you can see, the information is fairly basic as long as you know some definitions. Here is an explanation of some of the necessary information taken from The Citizen Media Law Project (Note: this is not state specific information, so you should always check the applicability of these definitions in your state):

  • Name of the Nonprofit Organization:

As discussed in Forming a Nonprofit Corporation, you must include the name of the nonprofit corporation, which typically must include “Corporation” or “Incorporated” or an abbreviation of one of these words, such as “Inc.” or “Corp.” Most states will not allow two companies to have the same name, nor will they allow your corporation to adopt a name that is deceptively similar to another company’s name. For state-level information on naming requirements, see State Law: Forming a Nonprofit Corporation.

  • Name and Address of Registered Agent:

Most states require the name and address (not a P.O. Box) of the nonprofit corporation’s registered agent in the state of incorporation. The purpose of the registered agent is to provide a legal address for service of process in the event of a lawsuit. The registered agent is also where the state government sends official documents such as tax notices and annual reports. If your nonprofit corporation incorporates in the same state where you do business, an officer of the nonprofit corporation can usually serve as the registered agent. If your nonprofit corporation incorporates in a state other than where it does business, then you will have to hire a registered agent in the state of incorporation. You can find registered agent service companies online. Shop around and compare rates because there are many registered agent companies available.

  • Legal Address of the Nonprofit Corporation:

Some states require that you include the address of the nonprofit corporation’s principal office (whether or not that address is inside or outside the state of incorporation). This is distinct from the address of the registered agent discussed above, although in some circumstances this address could be the same (e.g., when a corporate officer is serving as the registered agent).

  • Duration of the Nonprofit Corporation:

Some states ask how long your nonprofit corporation will be in existence. You should answer “perpetual” unless you know that the nonprofit has a definitive termination date.

  • Name of Incorporator(s):

An incorporator is the person preparing and filing the formation documents with the state. Most states require the name and signature of the incorporator or incorporators to be included in the articles of incorporation. Some states also require that you include the incorporator’s address.

  • Name and Address of Director(s):

Some states require that you list the names and addresses of the initial directors of the nonprofit corporation in the articles. In other states, you are not required to identify them (although you may do so if you want). See State Law: Forming a Nonprofit Corporation for details on the number of directors required by the fifteen largest U.S. states and the District of Columbia. When the initial directors are not named in the articles, the incorporator or incorporators have the authority to manage the affairs of the corporation until directors are elected. In this capacity, they may do whatever is necessary to complete the organization of the nonprofit corporation, including calling an organizational meeting for adopting bylaws and electing directors.

There are a few other things I want to point out. First, this is organized on a nonstock basis because it is a nonprofit organization. If you remember from my previous post, nonprofits do not operate for a profit for shareholders, rather the profit flows back into the company. Therefore, there are no stock investors.

Second, you may be wondering what the “other provisions” section is for. Here is where you can (but do not have to) put information about what your nonprofit is meant to, and allowed to, accomplish, i.e. something saying that this is a nonprofit dedicated to art education, and that per state law, no lobbying activities will take place. This type of information should be pretty clear from any business plans and bylaws you have drawn up (I will post about that as well!).

Last, it is very important to note that right now Project Create exists as a nonprofit corporation, but it is NOT  federally recognized 501(c)(3) organization. This means that I still cannot solicit donations and make them tax deductible. I still need to apply for that status with the IRS, or achieve it through a fiscal sponsorship.

In a few days, I should be receiving a Certificate of Incorporation which, together with my Articles of Incorporation, are the legal “body” of Project Create. However, just like a baby is alive before it gets its birth certificate, Project Create officially exists as of today!

Next Steps: Within 30 days after filing the Articles of Incorporation, I have to file a copy of the Certificate of Incorporation and either a certified copy of the Articles of Incorporation or an original signed copy to the recorder of mortgages in the Orleans parish (where New Orleans is seated. I will also apply for an Employer Identification Number.

So how excited are you for Project Create’s birth!?!?! As usual, if you have any questions or concerns, please leave a comment.

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The “Hold Your Horses” Disclaimer: Nothing in this blog is intended to be legal advice. If you are thinking about starting your own business, these are very important steps that should not be taken lightly. The internet is an amazing place and there are plenty of resources available on filing these documents. Please do enough research to ensure you are comfortable with the relevant legal jargon, or seek the help of an attorney.

Project Create Business Model

By now I am sure you are wondering how Project Create will actually bring more creativity to New Orleans, which already has a vibrant and artistic culture. While that is true, there is also a very large sector of the population that still does not participate in art. These are the people Project Create is targeting.

With a lot of research and planning, I have written a business model that addresses all 5 modes of art participation. However, you will notice that I have reorganized them into 3 more practical outlets. Without further ado, here is my pitch:

Project Create will be an open art studio where clients can participate in three ways: Art Creation, Art Education, Art Support.

Art Creation: Basic supplies for various media will be available. At opening day, we will support painting, drawing and needlework.  Within limits, these supplies can be checked out and used in the studio to create any art. When a client leaves the space, all unused materials must be returned. Storage will be provided for unfinished artwork that the artist can come back to finish. (Inventive Participation)

Art Education: Classes will be available for both general skills and product specific creation. In general skills classes, instructors will teach basic skills needed to ensure clients are comfortable in a particular medium (i.e. how to use a sewing machine). In product specific classes, students will be provided the resources and instruction needed to complete a particular piece of art (i.e. students leave with a finished painting). Seminars will also be provided to encourage clients to independently create and sell their work. (Interpretive Participation)

Art Support:  First, volunteers can apply to teach skills and product specific classes. Particularly, local art students will be invited to teach classes and develop leadership skills. The application process is a skills assessment to ensure clients receive proper training. Second, the general public can experience, view, and purchase art through the Project Create studio. The space will hold client developed cultural art displays and gallery events to showcase client work. (Interpretive, Curatorial, Observational, and Ambient Participation)

And here is the kicker:  While the general public can participate through monthly memberships and pay-per-use fees, the Project Create resources are available for free to the elderly and students in high school and below.

Many of you are wondering how am I going to start a business that gives away free resources with little (read: zero) start up capital. Even worse, how am I supposed to keep it running??? These are excellent questions, that I will address when I figure it out good answers.

Let me know what you think!

Researching The Competition

Now that I know the issues Project Create will address (the decline in art education and participation), it is time to start figuring out how those issues can be addressed. If you remember from my last post, I said that Project Create would promote the 5 modes of art participation that the National Endowment for the Arts identified (Inventive, Interpretive, Curatorial, Observational, and Ambient).

Building one business that promotes all 5 modes won’t be easy, but before I can even try to formulate a business model, I need to scope out the competition.  This is important because I need to make sure my idea for Project Create isn’t already in practice. There is no point in repeating efforts.

Since Project Create will be in New Orleans, I began researching the services already provided by existing local businesses, both nonprofit and for profit. I want to make it clear that I have the utmost respect and admiration for all art based businesses. I refer to them as competitors solely from a business perspective, because I need to know what art related services are available and where Project Create can fit in that market. My goal is not to take away their customers, but to fill in any gaps that allow more people to be creative. 

I found out that current New Orleans art organizations only target limited perspectives. For example:

  • Local art agencies provide funding and support for art programs but do not offer tangible resources to the general public (i.e. painting supplies).
  • Programs targeted towards art education in schools are curriculum based and do not allow students to seek out new art forms that interest them. Moreover, these programs are limited in scope and do not extend beyond the classroom.
  • There are external internship programs for young artists, but these are exclusive and do not support all artists, especially those less skilled. 
  • Adult classes are available, but these are generally inaccessible to the public because of their high costs or the type of instruction provided. For example, a skills course in painting can cost hundreds of dollars and only meet a few times a month. On the other end of the spectrum, there are low cost BYOB painting facilities for only around $40/class, but these offer only short, one-time experiences.

Unless I am mistaken, and please let me know if I am, no current organization addresses all 5 modes of participation and provides access to all members of the community. A major concern of mine is that there are very little resources for students to create art outside of school related programs. The same goes for adults whose schedules do not allow for consistent enrollment in a skills class with a set calendar.

This means the market is open for Project Create, and I need to address the current gaps New Orleans has. With this information, I can start forming a business model. In my next post I will share with you what I come up with.

As always, please share any comments and suggestions.

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