Can You Start a Non-Profit Organization While Receiving Social Security Disability Benefits?

In today's world, many individuals living with disabilities seek ways to give back to their communities or pursue meaningful projects. One common question we hear at the Law Offices of Christopher Le is whether it's possible to start a non-profit organization while applying for or receiving Social Security disability benefits. The short answer is yes—it can be done—but it requires careful planning to avoid jeopardizing your eligibility. In this blog post, we'll explore the key considerations, drawing from Social Security Administration (SSA) guidelines, to help you understand the landscape. Remember, this is general information and not personalized legal advice. We always recommend consulting with an experienced disability attorney to review your specific situation.

Understanding Social Security Disability Benefits: SSDI vs. SSI

Social Security disability benefits come in two main forms: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Each has different rules that could impact your ability to start a non-profit.

• SSDI is an insurance program funded by payroll taxes. To qualify, you must have a work history and be unable to engage in "substantial gainful activity" (SGA) due to a medical impairment expected to last at least 12 months or result in death. SSDI doesn't have strict asset limits, making it somewhat more flexible for entrepreneurial activities.

• SSI is a needs-based program for low-income individuals with disabilities. It has strict income and resource limits (e.g., $2,000 in assets for an individual). While SGA rules apply at the initial application stage for non-blind applicants, ongoing eligibility focuses more on your countable income and resources.

  
  

Starting a non-profit could involve administrative work, fundraising, or oversight, which might be scrutinized under these programs. The key factor is whether your involvement counts as SGA.

What Is Substantial Gainful Activity (SGA)?

SGA is the threshold the SSA uses to determine if your work activity demonstrates you're not disabled under their rules. For 2025, the SGA amount is $1,620 per month for non-blind individuals and $2,700 for those who are statutorily blind. If your earnings or the value of your work exceeds this, your benefits could be at risk.

Importantly, SGA isn't just about paid work. The SSA evaluates the nature and value of your activities, even if unpaid. For example:

• If you're self-employed or running a business (including a non-profit), the SSA looks at your "net earnings from self-employment" (NESE), which is gross income minus business expenses.

• They may deduct impairment-related work expenses (IRWE), such as costs for assistive devices or transportation needed due to your disability.

• Unincurred business expenses (like donated equipment or volunteer help from others) can also be subtracted when assessing SGA for SSDI.

  
  

Self-Employment and Non-Profits: The SSA's Evaluation Tests

Non-profits are unique because they aren't "owned" by individuals—they serve public purposes and can involve volunteer efforts. However, if you're the founder, director, or key operator, your role might be treated as self-employment. The SSA uses specific tests to evaluate this:

1. Significant Services and Substantial Income Test: If you provide significant services (more than half the management time or over 45 hours/month) and your average monthly NESE exceeds SGA, it's considered SGA.

2. Comparability Test: If your work is similar to that of an unimpaired person in a comparable business or non-profit, it may count as SGA.

3. Worth Test: If the value of your services to the organization is worth more than the SGA amount (what you'd pay someone else to do the work), it could be SGA—even if you're not paid.

   
   

For SSDI recipients who've received benefits for at least 24 months, the SSA shifts to a simpler "Countable Income Test," focusing on whether your average monthly countable earnings exceed SGA.

In the context of a non-profit, unpaid work like organizing events or managing volunteers might still trigger scrutiny if it's substantial. However, certain volunteer programs (e.g., under the Domestic Volunteer Service Act, like VISTA or Foster Grandparents) are explicitly excluded from SGA evaluations. General volunteer work, though, can sometimes be used as evidence of your ability to perform SGA-level activities, potentially harming your claim.

Work Incentives: Tools to Help You Test the Waters

The good news is that the SSA offers work incentives to encourage employment without immediately losing benefits:

• Trial Work Period (TWP): For SSDI, you can work for up to 9 months (not necessarily consecutive) while receiving full benefits, regardless of earnings. This is ideal for testing non-profit operations.

• Extended Period of Eligibility (EPE): After the TWP, you get 36 months where benefits continue if your work isn't SGA.

• Plan to Achieve Self-Support (PASS): For SSI (and sometimes SSDI planning), you can set aside income or resources for work goals, like starting a non-profit, without it counting against your limits.

• Expedited Reinstatement (EXR): If benefits stop due to work but you become unable to continue within 5 years, you can request reinstatement without a new application.

  
  

These incentives can provide a safety net as you build your non-profit.

Key Considerations and Risks

• Income from the Non-Profit: If the organization pays you a salary, it must stay below SGA limits to avoid issues. Non-profits can legally compensate staff, but report all earnings to the SSA promptly.

• SSI Asset Limits: Starting a non-profit typically doesn't create personal assets (since non-profits are separate entities), but any funds you handle personally could count against SSI's $2,000 resource cap.

• Reporting Requirements: Always report work activity to the SSA, even if unpaid or volunteer-based. Failure to do so can lead to overpayments or penalties.

• Evidence of Disability: Extensive involvement in a non-profit might contradict claims of inability to work, so document how your disability limits you.

  
  

Real-world examples from legal discussions show that while many succeed in this balance, others face denials if their activities suggest SGA capability.

Conclusion: Proceed with Caution and Professional Guidance

Starting a non-profit while on Social Security disability is feasible, especially with work incentives and careful structuring to avoid SGA thresholds. It allows you to channel your passions into community impact without necessarily forfeiting benefits. However, the rules are complex, and missteps can result in benefit reductions or terminations.

At the Law Offices of Christopher Le, we specialize in Social Security disability law and can help you navigate these nuances. Whether you're filing an initial claim, appealing a denial, or planning a non-profit venture, our team is here to provide tailored advice. Contact us today for a consultation—let's ensure your goals align with your benefits.

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Laws and regulations change, so consult an attorney for advice specific to your circumstances.