Question: What Is an Unincorporated Association?
Answer: Many so-called nonprofits are simply groups of people who come together to perform some social good. The advantages of being an unincorporated association is that there are few legal requirements, and they are easy to set up. The disadvantages are that they are not tax-exempt, cannot provide a charitable tax deduction to donors for money they give to the organization, and will find it impossible to apply for and receive grants from most foundations and corporations.
Members of an unincorporated association can be held directly liable if someone were to sue the association, and it is unwise for unincorporated associations to have any paid employees. An unincorporated association could be your book club, or a group of friends getting together to run a series of garage sales to help a friend pay medical bills.
Unincorporated associations work best for informal, ad hoc situations where people get together to perform some sort of community service or raise funds for a particular, and usually short-term, goal. Some states may require registration for unincorporated nonprofit associations, so check the requirements at the office of your Secretary of State.
