So you want to start a nonprofit? That's an exciting endeavor. But it's important that you understand what you're getting yourself into. Starting a nonprofit is a big commitment that requires a lot of time, energy, and resources. But it's also one of the most rewarding experiences you can have.
In this post, we'll guide you through the 12 steps you need to take to start a nonprofit organization. We'll also share some resources that will help you along the way.
Before you start a nonprofit, you need to do your research. This means learning about the nonprofit sector, the specific cause you want to serve, and the organizations that are already doing similar work.
Here are some questions to consider:
It's also important to research the legal and regulatory requirements for starting a nonprofit in your state. The National Council of Nonprofits has a wealth of resources to help you get started.
Every nonprofit needs a board of directors. The board is responsible for overseeing the organization's activities and ensuring that it fulfills its mission. Your founding board should include people who are passionate about your cause, have relevant expertise, and are willing to commit the time and resources needed to help the organization succeed.
Consider recruiting board members with expertise in areas like:
Your nonprofit mission statement is the foundation of everything your organization does. It should clearly communicate what your organization does, who it serves, and why it matters.
A good mission statement is:
Your organization's name is important. It should be memorable, easy to spell, and reflect your mission. Before you finalize your name, check to make sure it's not already being used by another organization in your state. You can do this through your state's Secretary of State office.
Also consider whether the domain name is available if you plan to build a website (which you should!). You can check domain availability through sites like GoDaddy.
Your bylaws are the rules that govern your organization. They should address things like:
The National Council of Nonprofits has a sample bylaws template you can use as a starting point.
Incorporating your organization creates a legal entity that is separate from its founders. This protects the founders from personal liability for the organization's debts and obligations. In most states, you incorporate by filing articles of incorporation with your state's Secretary of State office and paying a filing fee.
Most states require nonprofits to register before they can solicit donations from state residents. Registration requirements vary by state, so be sure to research the requirements in your state. The National Council of Nonprofits has a directory of state associations of nonprofits that can help you understand your state's requirements.
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the IRS to identify your organization for tax purposes. You'll need an EIN to open a bank account, apply for tax-exempt status, and file tax returns. You can apply for your EIN online through the IRS website.
To receive tax-exempt status from the federal government, you'll need to apply to the IRS for 501(c)(3) status. This allows donors to deduct their contributions to your organization on their federal income tax returns. You can apply using IRS Form 1023 (or the simpler Form 1023-EZ if your organization qualifies).
The application process can take several months, so be patient. You can continue to operate as a nonprofit while your application is pending, but you won't be able to offer donors a tax deduction until you receive your determination letter.
Good financial management is critical to the success and credibility of your nonprofit. Before you start accepting donations, establish financial policies and procedures that cover things like:
Consider working with an accountant who has experience with nonprofits to help you set up your financial systems. The National Council of Nonprofits has resources on financial management policies that can be helpful.
As your organization grows, you'll need to build a team to help you fulfill your mission. This might include paid staff, volunteers, and contractors. Be clear about the roles you need, the skills and experience required, and whether you can afford to pay someone or need to rely on volunteers.
The foundation of a strong team is a shared commitment to the mission. Make sure everyone who joins your team understands and is passionate about what you're trying to accomplish.
No nonprofit can succeed without donors. Getting your first donors is one of the most challenging parts of starting a nonprofit. Start by reaching out to your personal and professional networks. Tell everyone you know about your organization and why you started it.
Here are some strategies for getting your first donors:
Don't forget to set up an online donation page so it's easy for people to give. Kindful makes it easy to create a beautiful donation page that reflects your brand and mission.
Starting a nonprofit is a big commitment, but it can also be one of the most rewarding experiences of your life. By following these 12 steps, you'll be well on your way to building a successful organization that makes a real difference in the world.
