7 Basics for Starting a Nonprofit
So you want to start a nonprofit? Working in the nonprofit industry allows you to put your values at the forefront of your work experience and strive to change the world. Starting a nonprofit requires deep commitment, hard work, and of course, time.
To help you determine the right steps to take when beginning, we’ve come up with this list of basics for starting a nonprofit.
Analyze the existing organizations to determine whether or not your idea for a nonprofit is already in existence, or if you could improve on the work that’s already being done. Look for the demographic data that supports why your nonprofit needs to start serving the community. Your research will become important tools for soliciting individuals to join your cause and demonstrate the importance of your work.
2. Create a Mission Statement
Your mission statement is the cornerstone of your organization. It needs to tell everyone what your organization’s purpose is, who your organization serves, and how it plans to serve them. When problem-solving or creating a new program, all decisions must be measured against the mission statement.
3. Draft a Business Plan and Bylaws
The business plan supports the nonprofit mission statement by giving concrete details for achieving the mission statement while the bylaws outline how the nonprofit will be run internally. These plans and bylaws can be helpful for revamping old projects, starting new ones, and handling internal issues. Your goals need to have a plan of action within the structure of bylaws, and that’s exactly what a good business plan does.
4. Develop your Board of Directors
Choosing the right individuals for your board is important. These volunteers should be passionate about your cause and as they will cover a number of roles within the nonprofit and also shoulder legal responsibilities. Take the time to train your board with an orientation to the nonprofit, outline the work needed, and go over other duties that will be expected of them. The board will continuously need to adapt as your organization grows and changes. Having flexible and passionate people makes your board strong.
5. Incorporate your Nonprofit
While this may seem like a very official and nerve-wracking step, incorporating your nonprofit is one of the simplest procedures. Not only does it provide credibility for your programs but it also limits the liability of your board in the case of bankruptcy. Incorporating your nonprofit sets your organization up to receive tax-exempt status, function as a legal organization, and accept funding. Check your state’s guidelines for the official process you should follow in your location.
6. File for 501(c)(3) Tax-Exempt Status
To apply for exempt status with the IRS, you may need to pay an application fee between $275-$600, based on your application method. It’s not uncommon for the IRS to have questions about your application. Therefore, your nonprofit organization may not receive a decision for 3-12 months. In most states, to apply for tax-exempt status, you will need the following:
Articles of incorporation
An IRS employer identification number
Leadership structures, bylaws, and programming
Completed IRS form 1023
Compliance with state laws
7. Prepare for the Future
In many cases, startups don’t make it past year five, but this does not have to be the case for your organization. Start with a plan to determine how to develop your organization in order to reduce growing pains and internal issues. Take the time to brainstorm and aquire the tools you’ll need for the future, whether automated marketing systems or other management tools.
As you plan for the future, consider what fundraising opportunities are available to you. At Harness, we help nonprofit organizations turn casual donors into lifetime donors with our app that lets you tailor your messages with your donor base in mind.