Q&A #142 – Can a home address be used when incorporating a new nonprofit?
Question: I am in the process of forming a new nonprofit and I need to provide a corporate address for the organization. Can I use my home address for the organization or am I required to find another alternative?
Answer: Virtually all states requires that nonprofit corporations designate a street address (and not a P.O. box) as their principal office in the state and/or the office of their “registered agent.” It is generally permissible to use a residential address for this purpose, although some jurisdictions may have special permitting or zoning requirements. However, there are several disadvantages to consider.
First, there are privacy implications. The street address used when incorporating a nonprofit will be highly visible. While your home address may already be visible through other public records (such as county real estate databases), you may not want the additional exposure that comes with connecting your home address to a nonprofit organization.
Second, be aware of how using a home address may be perceived by donors, grantors, vendors, banks, insurers, service providers, and other members of the public. When searching an organization’s address online, it is often obvious that a home address is being used. While many people may not care whether your organization is using a home address, other people may (perhaps unfairly) get the impression that your organization is smaller in nature and/or less sophisticated.
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A third consideration involves operational issues. Organizations that use the home address of a founder or Board member often forget to update this address when this person moves or steps down from Board service. This can lead to missing very important letters and notifications, such as those involving the organization’s federal tax and state registration compliance.
Planning Tip – Develop a change of address checklist setting forth all the agencies and entities that will need to be notified in the event the organization changes its corporate address, including the IRS, state tax and employment agencies, applicable secretary of state offices and charitable registration authorities, banks, insurance companies, grantors, service providers, etc. Adding this checklist to your policies and procedures manual will provide a helpful compliance reminder and facilitate efficient and successful transition to the new address.
For the above reasons, using a home address as the organization’s corporate address is usually not recommended as a first choice, even though it is permitted. Consider other options such as using a virtual office with a mail service, or sharing a mailing address with a likeminded nonprofit, which are relatively affordable alternatives that should satisfy most legal requirements (but consult an attorney and/or review the laws and rules of your state to be sure).
However, if using a home address is the only practical choice for your organization, try to make this a temporary solution, while you work towards establishing a more permanent office address in the near future.
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