How To Start A Nonprofit Organization The Right Way
The learning curve to learn how to start a nonprofit organization for many is a daunting task and is cause for people chasing wild geese across the internet while costing them extravagant fees. A sure way to avoid these pitfalls and wasted expense is to learn how to start a nonprofit organization simply as you go. Essentially you create a nonprofit in reverse and assures a sure way to cut down the time and expense in starting a 501c3 as I will explain below.
Many start the process by seeking someone who knows how to start a nonprofit organization to create the nonprofit for them, costing them expensive fees. Compiling the information and processes they need to complete can take a long and grueling toll on the founders. Once the nonprofit is created, they begin working on their branding and continue on to fundraising. Once they have established some success in fundraising and charity work the programs are rolled out and nonprofit work begins.
The typical process centered around how to start a nonprofit organization starts with the organizational structure and works inwardly eventually getting to the actual work. There are huge disadvantages to this method, mainly a daunting and very expensive process that has to be bank rolled through its entirety. The attrition rate is huge for those that take this route.
Secondly, when people learn how to start a nonprofit organization in this manner the nonprofit is created with a very limited scope of what the nonprofit might eventually be involved. If the nonprofit evolves outside of its mission statement, it requires redoing paperwork and or limiting programs.
Learn How To Start A Nonprofit Organization Inside Out
A better way to learn how to start a nonprofit organization is working from the inside out. By working from the inside to the outside, it simplifies the process so that once established it stays “spot on” without a quiver.
Let me explain. When discovering how to start a nonprofit organization, first engage the work it will be doing. Likewise, involve your donors and those you will be helping. In this manner, you and your board will get a better picture of the potential of the nonprofit and what your mission statement and programs will need to be to encompass all it will do. By establishing this “roadmap” of what the nonprofit will do and its potential you can create it with a focus that will not limit it.
At this stage, I like to brainstorm every possible angle it might be engaged to get a clear perspective of its mission. This can give you a better roadmap on how to start a nonprofit organization.
Only now can you know exactly how the non profit will operate, what it will be involved in, and even how it will accomplish its mission. Like building a house, you can now start with the foundation, move on to the framework, and finish by moving in.
How To Start a Nonprofit Organization That Is Smarter
One way to have a good operating structure as you explore its possibilities is through establishing a Fiscal Sponsorship. By exploring how to start a nonprofit organization with this type structured sponsorship makes it easier and quicker to make sudden changes in the structure or even the mission during its initial work.
By learning how to start a nonprofit organization as a fiscally sponsored nonprofit, you can have independent 501c3 status while giving it time to mature and establish its resolve. Thus, you can file for independent 501c3 status at a future time if the need arises.
How to start a nonprofit organization? Here are the steps:
While deciding how to start a nonprofit organization, you decide to create a Fiscally Sponsored nonprofit you fill out a two page application, submit it and have a fully functioning nonprofit in around 6 weeks. That’s it.
The steps to create an independent 501c3 are as follows:
- Decide the route of how to start a nonprofit organization you will use
- Choose a name for your organization and call your state’s division of corporations to reserve the name.
- Formulate a mission statement which explains what your organization will do and how it will do it.
- Create and file your articles of incorporation
- Apply for an employer identification number (EIN)
- Once your Articles of Incorporation are approved, set up your bank account
- Create By-Laws
- Select and vote on a Board of Directors
- Hire a CPA that has experience with nonprofits
- Establish and approve a budget
- Apply for Federal, State and local tax exempt status
- Fulfill the charitable solicitation law requirements for your fundraising efforts
Using the inside out approach when you decide how to start a nonprofit organization, can give you a much more stable and successful approach.