Do Nonprofits Have Franchises? Yes, They Are Called Affiliates
What Is a Nonprofit Affiliate?
There is more than one way to participate in the nonprofit sector.
Becoming a stand-alone charity may not always be the best way to go. It's complicated, and new nonprofits fail at about the same pace as for-profit businesses.
One way to help with a particular cause is to become an affiliate of another nonprofit.
Many of the charities we know at the local level are, in fact, branches of national, statewide, or regional nonprofits. They might be called an affiliate or a chapter.
Some national nonprofits simply link with already existing local nonprofits, while others have licensing agreements that make the regional group a part of the national one.
These affiliates operate similarly to franchises. Usually, a parent organization copyrights its name and has a licensing agreement with any new group that wants to be a chapter.
There are several legal ways nonprofit organizations establish their affiliated organizations or chapters.
However, a common configuration is for the parent organization to follow the IRS procedures to cover the new organization under the group exemption of the parent.
Benefits vs. Drawbacks of Affiliating
Benefits to an affiliating organization may include (depending on what legal model is followed) receiving 501c3 tax exemption under the umbrella of the primary organization saving the trouble of going through that sometimes arduous application process on its own. However, it is not uncommon for an already existing 501c3 nonprofit to affiliate with a larger one.
There are obvious benefits to being linked to a larger organization with fundraising and marketing power.
But there can be disadvantages as well.
One of the downsides to an affiliation that could grate on one's nerves is the need to adhere to the parent organization's rules and regulations, right down to what the stationery and logo look like.
However, since the parent organization takes on considerable legal liability for the affiliating group, it's understandable that it would insist on adherence to its standards.
Another downside might be that although the smaller organization can benefit from the fundraising power of the parent organization, it will have limited access to those funds. The parent will determine how much money an affiliate receives from national fundraising and can dictate the way the smaller organization can raise funds for itself.
Whether a start-up or small organization decides to affiliate with a larger, more established one will depend on several factors, including:
- Availability of nonprofits open to affiliation
- Finding a good match for mission, purpose, and culture
- The willingness of the smaller group to take direction from the larger one.
How Do You Find Nonprofits That Have Affiliates?
There is no central list of national or statewide nonprofits that offer the opportunity to become a chapter.
Familiarize yourself with those nonprofits serving the cause you have an interest in, and then contact any that look interesting to see if they are open to new chapters.
Sometimes, a nonprofit will advertise that it is open to new affiliations. Here are a few organizations that have the welcome mat out for new affiliates:
Dress for Success. This organization helps women around the world find the clothing they need to interview for jobs. It also provides career counseling and support. Volunteer driven, Dress for Success welcomes affiliates.
Habitat for Humanity. Habitat has become one of the most famous of nonprofits. It works all over the world to help low-income families move into homes. Volunteers help build the houses, companies provide materials, and local communities get heavily involved. Affiliations consist of local nonprofit organizations.
Boys and Girls Clubs of America, This iconic, historic nonprofit, operates across the country through a network of affiliates. The process of becoming an affiliate demands serious intent and the ability to organize well.
Other, large, well known, nonprofits that have sophisticated networks of affiliates include the United Way, the Boy Scouts of America, Goodwill Industries, and Planned Parenthood.
Consider Affiliating with a Giving Circle
Another group of charitable organizations that thrives on chapters or affiliates is Giving Circles. These groups focus on raising funds, not running programs.
There are many Giving Circles across the world, and affiliating with them might be much easier and far less complicated than affiliating with an organization that provides services.
Here's how Giving Circles work, and here are a few you might want to investigate if you'd like to set up a local chapter:
To find other possibilities for nonprofit affiliations, you can prowl the directory of nonprofits at GuideStar to see which ones have affiliates. Search for "organizations that have affiliates." That will bring up both parent groups and local affiliates but will narrow your search quite a lot.
A visit to the websites of likely candidates should reveal whether they accept new affiliations.
If you are seriously interested in partnering with an existing nonprofit, keep your eye on local groups. Consider libraries, historical societies, and organizations that serve the needy.
Also, check out how to do good with other business structures besides the classic nonprofit model, such as hybrid organizations, BCorps, starting a for-profit with a social intent, or becoming a social entrepreneur.
NANOE. "Nonprofits Fail – Here’s Seven Reasons Why." Accessed May 6, 2020.
International Franchise Association. "What Is a Franchise?" Accessed May 6, 2020.
CharityLawyer. "Creating Nonprofit Chapters and Affiliates." Accessed May 6, 2020.
IRS. "Group Exemptions." Accessed May 6, 2020.
CLA. "Pros and Cons of Local-National Nonprofit Affiliation Agreements." Accessed May 6, 2020.
Dress for Success. "Interested in starting an affiliate?" Accessed May 6, 2020.
Habitat for Humanity. "What are Habitat for Humanity affiliates?" Accessed May 6, 2020.
Boys and Girls Clubs of America. "How to Start a Boys and Girls Club." Accessed May 6, 2020.