It is easily shown that the forgetful functor $F: \mathbf{Man} \to \mathbf{Set}$ preserves limits ($F$ is representable), but does it preserve colimits? It certainly preserves all examples of colimits that know of which exist in $\mathbf{Man}$, namely
- coproducts (disjoint unions)
- the glueing of open manifolds along open subsets
- quotients obtained by acting properly and freely by Lie groups on manifolds.
The second two cases are special cases of Theorem 5.9.5 in Bourbaki, Variétés differentielles et analytiques:
The set theoretic quotient of a manifold $X$ by an equivalence relation $R \subseteq X \times X$ admits a (necessarily unique) smooth structure such that $X \twoheadrightarrow X/R$ is submersion iff $R \subseteq X \times X$ is a submanifold of $X$ and either projection $R \twoheadrightarrow X$ is a submersion.
By the fact that $F$ preserves coproducts it is enough to show that it preserves coequalisers, but I'm completely stuck on this special case.