How to start a nonprofit organization in your community
Do you have a vision to contribute to your community and a desire to build an organization to make that dream a reality? If so, organizing a local nonprofit might be just the ticket. But before you rush headlong into the wide world of the 501C and its many variations, read this article to discover the basics of creating a nonprofit.
Ponder your purpose
To begin with, think about the purpose of your nonprofit. What do you hope to achieve by its creation? Whom do you plan on serving? What services will you offer to make the difference you want to make in your community? Write a mission statement that describes the overall purpose of your organization. While mission statements vary in form, here are a few things to consider in creating yours:
- Who will be the primary beneficiaries (the clients) of your nonprofit?
- What specific services will you offer those clients?
- What values and standards will guide your nonprofit?
Bring on a board of directors
Depending on whether you plan on incorporating, each state has its own requirements for the number of board members you need to bring on. Among other things, your board members are there to:
- Help make prudent decisions that affect the organization
- Support the organization's mission and values
- See that the nonprofit follows all laws governing it
- Attend board meetings and provide input on fiscal and strategic matters
The best boards are composed of individuals with a diverse group of skills. Members who have experience and expertise in such areas as human resources, public relations and marketing, finance and law will create a well rounded team. Remember to keep an eye out for board members who are well connected and comfortable with fundraising, because that is often part of the duty board members take on.
In the event that you're not planning on incorporating, consider assembling an advisory board to help you find your way through.
Hire some help to fill out the forms
Many people mistakenly assume that all nonprofit organizations qualify for tax-exempt status. Not so, because it's possible to be incorporated but still not receive an exemption. Here's where a lawyer with knowledge of nonprofits can become your best friend. While you have the option of filling out the necessary paperwork yourself, a smart strategy is to use the services of an attorney to:
- Advise you on whether to incorporate your nonprofit
- Help you apply to the IRS for tax-exempt status
- Assist you in writing the articles of incorporation
- Draft bylaws to dictate how the organization will operate and the board will be run
- File for incorporation with your state's specific requirements
- Understand the fundraising laws of your state
- Secure a federal employer ID number
Make way for the money
Lastly, remember that a great vision will take you only so far. A nonprofit is still a business that needs a plan, and bucks, to survive. Create a solid fiscal stage for your organization by:
- Setting up an account with a bank that understands the needs of a new nonprofit
- Hiring a professional financial person to set up and keep the basic bookkeeping of the organization
- Establishing a relationship with an insurance agent or broker who can arrange for the range of insurance you may need, including liability, property, workers' compensation, health and others.
Remember taht your fundraising efforts can't end with golf tournaments, silent auctions and sponsored dinners. Fundraising is an inherent, never-ending part of the nonprofit life -- so roll up your sleeves, and get going.