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501c3 Essential Tips


7 Essential Tips for a 501c3

You’re ready to start a tax exempt 501c3 and make a positive impact in the world and now you need non profit information on the best way to go about creating your organization.  There is a lot that goes into a non profit incorporation, but not so much that most anyone can do it. There are, however, important steps to take as you start out. Follow along below and I will help you get started in the right direction with seven essential tips. These tips, when used right, will help you be successful creating a nonprofit.

Create The 501c3

Creating the actual nonprofit organization can be accomplished in several different ways. The first and most known way is by creating an independent 501c3 through the IRS. This can be a lengthy process and includes non profit incorporation in the state that you wish to do business, and filing for 501c3 status through the IRS using form 1024.

The second, fastest growing way to form a nonprofit organization is through fiscal sponsorship.  This is where an already existing 501c3 organization accepts your nonprofit project within its organizational structure. This allows an organization to carry out nonprofit projects without the need for setting up an independent 501c3 through the IRS. Setting up a fiscal sponsorship can be very quick, easy, and inexpensive. The most important part of setting up a fiscal sponsorship is finding a sponsor who is reputable and long-standing in the nonprofit arena. If the sponsor is not solid, they can negatively impact your nonprofit project.  Find a third party who is skilled and knowledgeable about fiscal sponsors to get recommendations from.

501c3 Research

When you start a 501c3 nonprofit it is important to thoroughly research the cause you will be helping. This will help you understand what nonprofit organizations are already in existence doing similar work. This will assist your organization in determining areas that still need help and nonprofit organizations you can work alongside of in better accomplishing the task. Continual research will help your organization stay focused on its mission.

File for 501c3 Tax-Exempt Status

When doing nonprofit work filing for tax-exempt status is important. Many nonprofits skip this step because it can be expensive, only to need to come back to the step years down the road. By having tax-exempt 501c3 status, your nonprofit can give donors tax-deductible receipts for their donations.  Tax-exempt status is necessary when receiving donations from most corporations and when seeking grant money. Don’t put yourself in a bind without 501c3 status. You do not want to be scrambling to get tax-exempt status with a large donation pending.

Develop A Good 501c3 Fundraising Plan

Fundraising is the lifeblood of a 501c3 organization. Very little can be accomplished without funds to spend. Developing a good fund raising plan and continued financial stability is vital to the success of your nonprofit. Find good information on how to fund raise and put the plan in action from the very beginning.  It is not necessary to hire a fundraiser or grant writer but instead look at and invest in resources that help you learn to do these tasks yourself.  No one is going to care as much about the financial stability of your organization as you.

Develop A Strategic Plan

Developing a strategic plan on how your 501c3 nonprofit will operate, accomplish its mission, hire staff, and grow will be necessary. Without a strategic plan in place it will be very hard to make sure your nonprofit is successful. Strategic plans are blueprints that you can reference back to continually, making sure your nonprofit is on track for success. Find a good resource or manual that explains how to put together a good strategic plan for your nonprofit.  The Simple Nonprofit Starter Bundle includes a complete resource developed help a nonprofit create a great strategic plan.

Think Long Term

Hopefully your nonprofit will continue to operate successfully for your lifetime and beyond. When starting a nonprofit, keep this long-range vision in mind. There is wisdom in establishing a solid foundation in the beginning rather than haphazardly throwing your organization together. Consider taking six months to a year in the beginning to establish stable fund raising, great programs, and good practices. For example, use the first year to fund raise and raise awareness of your nonprofit so that you can fund your budget.  Then with stable funding you can begin paying salaries, office expenses, and fund programs with less stress. Once your programs start, it will be more difficult to focus 100% of your efforts on fundraising.

Have Fun

Helping others should be fun. Starting a 501c3 and running it successfully can be fun. If at any point you find you have lost the “fun factor,” regroup and figure out how to put the fun back into your efforts.  If fun and enjoyment is not a constant part of your nonprofit efforts, it will be difficult to continue. Make sure those you help, those that volunteer, and yourself are having a blast and your nonprofit endeavor will always have life.  Find more information on how to start a 501c3 nonprofit and run it successfully at this page “The Nonprofit Starter Bundle.”

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