Start a Nonprofit Organization

Are you determined to help others by starting a nonprofit organization? To start a nonprofit you'll need a unique idea that distinguishes your group from similar organizations, a carefully-drafted plan of action, and the passion to keep working toward your goals even when times get tough. If reading this only fuels your desire to get started, follow the steps below to set up your nonprofit.

Steps

Defining Your Purpose

  1. Pick your cause. What populations will benefit from your nonprofit, and in what way are you planning on helping them? This question may seem obvious, but it's worth taking the time to consider it deeply. Start out on the right foot by having a strong purpose and goals that are distinct from those of other nonprofits in your community.[1]
    • Your nonprofit should work for the common good with a specific purpose in mind. For example, your purpose could be to create a cleaner environment for the people and wildlife in your community by establishing programs to clean up the rivers and streams.
    • It's important that the purpose of your organization doesn't overlap too much with the work being done by other organizations. For example, if you wish to start a nonprofit to increase literacy in your city, make sure that a similar program hasn't already been established by someone else. You may be able to better accomplish your goals by collaborating with an existing nonprofit. You should also keep in mind that there are millions of nonprofits and limited grant and donor funds to go around, so you'll need to establish yourself as filling a niche that isn't being filled by anyone else.
  2. Write a Mission Statement for a Nonprofit Organization. Once you have a purpose in mind, craft a clear, timeless, decisive mission statement that will serve as your guide during the entire process of creating your nonprofit and executing your goals. Your mission statement will be a way of clarifying your purpose for yourself as well as advertising your organization to the rest of the world.
    • Keep it broad if you're dreaming big. You may not know exactly where your nonprofit journey will take you; like all organizations, yours will have to react to the changing times and the needs of the community. If you want to keep your goals general for now, consider this example from the Sierra Club, whose mission is, To explore, enjoy, and protect the wild places of the earth; To practice and promote the responsible use of the earth's ecosystems and resources; To educate and enlist humanity to protect and restore the quality of the natural and human environment; and to use all lawful means to carry out these objectives.[2]
    • Write something more specific if you have a concrete plan in mind. If you're starting a nonprofit to fill a need that's immediately apparent in your community, you might want to write a more focused statement, like this one from the Samaritans, an organization that runs a suicide prevention hotline: We are a non-profit, volunteer organization whose sole purpose is to provide support to those individuals and groups who are in crisis, have lost someone to suicide and/or are feeling suicidal.[3]
  3. Come up with a name. Pick out a name that is easy to remember, interesting, and gives a clear picture of what your organization is all about. It's also important that your name be unique, since it's illegal to incorporate under a name that is already in use. Contact your state's Secretary of State's office to find out whether the name has already been taken. If it has, you'll need to come up with something else.
    • Don't use a name that's too long or wordy. It will be more difficult for people to remember.
    • Try to choose a name that isn't too mysterious. For example, if you are starting a nonprofit to benefit homeless children, you'll want to state that clearly so that people who need your services can connect with you easily. Horizons for Homeless Children[4], for example, leaves no doubt about what their organization does.
    • When you settle on a name that no one else has, reserve it with the Secretary of State's office.

Becoming Incorporated

  1. Decide what legal structure your nonprofit will have. Nonprofit organizations fall into different legal categories. The category you choose will determine what sort of actions your organization may perform, how you can get funding, whether your organization has to pay taxes, and whether those who donate to your organization will receive tax exemptions.[5]
    • Nonprofits with 501(C)(3) status do nonpartisan work for the public good, and are exempt from paying taxes. Examples include churches, groups that work to educate the public on safety issues, many environmental organizations, groups working to end domestic violence, groups working to stop hate crimes, and countless other organizations working on issues that benefit the community as a whole by helping in specific ways.
    • Nonprofits with 501 (C) (4) status also work for the common good, but they commonly focus on partisan political issues and may back a specific party or candidate. Money spent on political activities is taxable.
    • These are the most popular classifications for nonprofits, but there are many others. Look into further specific nonprofit classifications that may be appropriate for the type of organization you want to start.
  2. Write and file articles of incorporation. These are official statements that include your organization's name, purpose, and a mission statement. They protect the director and board from legal liabilities, placing the liability to the organization instead. Your state's Attorney General's office or Secretary of State's office has the specific information you need to file articles of incorporation in your state.
    • At this point it is often a good idea to hire an attorney to help you write the articles of incorporation correctly and make sure they are filed according to your state's laws.
    • Once your articles of incorporation are filed (with a small filing fee), you'll receive a Certificate of Incorporation from your state. At that point you will need to follow your state laws to keep your papers updated in the years to come.
  3. Draft corporate bylaws. These serve as a rule book of sorts for your organization, and must be written according to state law. Again, it is advisable to have an attorney help you draft the bylaws to make sure they're written correctly. The bylaws may be amended as your organization changes over the years. The document should cover the following material:
    • Membership. Write whether your organization will have members, requirements of membership, whether member meetings will held, and what role the members will play.
    • Board of directors. Write how many people you'll elect to the board, what election process will be used, when meetings will be held, how long the terms will last, what constitutes grounds for removal, what responsibilities board members have, and so on.
    • Fiscal management. Write out the details of the responsibilities of financial officers, compensation, dues, and so on.
  4. Form a Board of Directors and have a meeting to vote on the bylaws. Making sure to follow your state laws, identify people who will help you accomplish your goals as an organization to serve on your Board of Directors. These should be qualified people who support your goals and are willing to come to meetings and take their role seriously. Once you've selected board members (usually between 3 and 7), hold a meeting to vote on the bylaws.
    • Religious leaders, political leaders, other nonprofit leaders, professors, and other respected members of your community are good candidates for your Board of Directors.
    • Select a diverse group of people with a range of perspectives to keep your organization strong.

Creating a Financial Structure

  1. Develop a Business Plan for a Nonprofit. Determine where your organization will be its primary funding and how the money will be used to pursue the goals you have laid out. Make a budget for various programs, events and activities you intend to fund.
    • Include employee compensation as part of your budget.
    • Take grants, donations, state and federal contracts, and other types of funding into account when you create your business plan.
    • Having a solid business plan and budget is mandatory when you apply for tax-exempt status, so it's best to have an attorney look it over to make sure it contains all the necessary information.
  2. Apply to get a federal employer identification number. All nonprofits must get an employer identification number (EIN), also referred to as the federal ID number, which is used to identify the organization for tax purposes. Apply using your corporate name.
  3. Obtain tax-exempt status. Determine which forms you need to fill out to apply to the IRS for tax-exempt status. Not all organizations are eligible for the same exemptions, so consult with your attorney to determine which forms to fill out and what additional information you'll need to submit. You'll be expected to send in your financial plan and budget as well as a filing fee.[6]

Building a Strong Organization

  1. Hire a brilliant team. Like any organization, the success or failure of a nonprofit is determined by the strengths and weaknesses of the individuals who fill important roles. Do a thorough hiring search to find the best candidates for the particular jobs that need to be done for your organization to run smoothly.
    • Having a smart, dedicated bookkeeper is essential; find someone who will keep your finances on track and be up front when problems arise.
    • Find a determine, scrappy development director to take charge of your fundraising efforts.
    • In the early stages, you might not have the funds to actually hire employees. You'll probably find yourself doing the work of 3 or 4 people, but you can enlist volunteers, interns, and part-time employees to help your organization get on its feet.
  2. Get to know the leaders in your community. Nonprofits are committed to helping communities above all else. To become a respected resource in your community, it's important to get to know the movers and shakers who can advocate your work and potentially help you get funding to stay afloat.
    • Participate in community events. Go to Town Hall meetings, show up at rallies put on by other nonprofits, attend benefits and fundraisers, and generally be visible at the important meetings in your community.
    • Form coalitions with other nonprofits. Partnering up with community leaders to put on events that benefit the entire community is an excellent way to make your presence known and do great work all at once.
  3. Create Marketing Materials for a Nonprofit Organization. Create a good website, have an active Facebook and Twitter account, advertise in local newspapers, put up signs around town, and generally go all out to promote your organization. If you're doing important work, people will want to hear about it and find a way to get involved, so the more you get the word out, the better.
    • Try to get media attention. Local reporters are always looking for an interesting new story to cover. Email or call the newspaper or news station in your area to let them know about an event you're putting on.
    • If you want to spread awareness about a certain issue (and promote your organization at the same time), write an editorial for the newspaper or call the local radio station to pitch yourself for an interview.
    • Send out email blasts to members and people who signed up for your email list. Keep people informed about events, ways to help out, and important issues relevant to your cause. This is also a chance to ask people to donate to your organization.
  4. Find ways to raise money. Much of the work of a nonprofit lies in meticulously documenting your goals and your progress toward them, then presenting this information to potential donors or in the form of grant applications in hopes that people will offer financial support. The energy you bring to fundraising and grant writing will pay off in spades, so don't shirk in this area.
    • Hire a grant writer (or ask a talented volunteer) to research and apply for as many grants as possible. Seek out grants that are geared toward the type of work your organization does. Sites like www.grant-watch.com[7] list grants according to different groups and advocacy work.
    • Have fundraising events. While they take a lot of work, fundraising events can help establish your organization as a community leader. Host a documentary screening, a benefit concert, a bingo night, a pancake breakfast, a river cleanup day, or other fun community event to raise money.
  5. Keep your goals in sight. Remember your mission statement, and let the passion that inspired you to start a nonprofit continue to guide you as you make decisions concerning hiring (and firing), fundraising, forming coalitions, opening more offices, supporting certain candidates, and all of the other issues that will cross your path as director of an organization. Making steady progress toward your goals is fulfilling on a personal level, but it's also absolutely necessary for the health of your organization.

Tips

  • Your first project sets the mood of your organization. Pick something everyone can participate in, so it will be successful and fun!
  • Ask for help. It's not easy to do something so big alone. If you're helping animals, ask a pet store owner to help you with a fundraiser. If you're finding the cure, ask some caring breast cancer survivors to speak out about the organization.
  • Creating a website is a fantastic way to keep things organized for your nonprofit. It is also a great thing to put on flyers, because many people don't like to call to learn more.

Sources and Citations

  1. ↑ http://www.minnesotanonprofits.org/nonprofit-resources/start-a-nonprofit/steps/visionary
  2. ↑ http://www.sierraclub.org/policy/
  3. ↑ http://samaritansnyc.org/our-mission/
  4. ↑ http://www.horizonsforhomelesschildren.org/
  5. ↑ http://www.huffingtonpost.com/steve-mariotti/how-to-start-a-nonprofit_b_881572.html
  6. ↑ http://www.minnesotanonprofits.org/nonprofit-resources/start-a-nonprofit/steps/fedfiling
  7. ↑ http://www.grantwatch.com/
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