Starting a Nonprofit?

Dec 05, 2010 | Simplenonprofit | 0

So, You Are Starting a NonProfit

I understand, for the first time or maybe the eighth time, you have had an epiphany in the way you can change the world and want to begin starting a nonprofit. After being awake all night thinking about all the ways your new idea will change thousands of peoples lives, you start searching the internet on how to do nonprofit workorganization and make it a reality. You decide to start a shiny new nonprofit organization and give your life to its service. In your search, you might have come across an article that discouraged you in starting a nonprofit that is new, telling you how many fail or encouraging you to join up with an already existing nonprofit that is focused on a similar idea. Now discouraged, you keep searching for how you can continue starting a nonprofit hoping that someone will encourage you that it can be done. I’m the hope you are searching for that will encourage you and help you in your quest in easily starting a nonprofit.

Starting a nonprofit and running it successfully is not necessarily the easiest thing you’ll ever do, but it is most likely the most rewarding thing. I like to think that starting a nonprofit and running it successfully can be relatively easy. You must remember starting a nonprofit organization is in essence starting a corporation, so there is some work that comes with its startup. Having been involved in nonprofit work for over 15 years, I have seen many begin though starting a nonprofit only to be frustrated and give up part way through. Anything worth doing is worth doing right, and equally, worth the effort. Below are the steps you need to start a nonprofit. Included are steps to start a nonprofit through a fiscal sponsor which may prove to be much easier than creating an independent nonprofit.

Steps in Starting a NonProfit Through a Fiscal Sponsor

Find an independent nonprofit willing be a fiscal sponsor for your non profit project
Go through the Fiscal Sponsors application process

There is not much to starting a nonprofit through a fiscal sponsor. The majority of the application process falls on the organization who is granting the sponsorship.

Things you will want to research with the Fiscal Sponsor when starting a nonprofit:

Request and look over the Sponsorship agreement
Understand the application fee and if that is a one-time or annual amount
Get specifics on administration fees and what that covers
Understand how banking and access to funds works when starting a nonprofit
Examine the services the fiscal sponsor provides

Steps in Starting a NonProfit That Is an Independent 501c3 (not fiscally sponsored)

Clearly define a specific problem and define the target population (the audience to receive services).
Conduct a Community Resource Inventory (a list of resources available to the target population). Research whether or not another nonprofit is currently doing this work or something similar (in your area or a neighboring area).
Conduct social marketing. Poll the community to see if there is an interest in the proposed services.
Determine the purpose of the organization and create a mission statement.
Recruit and form a board of directors. Obtain a solid commitment from all members including an understanding of what their role will be and the amount of time they are willing to commit.
Determine state requirements for incorporation and obtain applications.
Draft articles of incorporation and bylaws (the organization’s “rule book”).
Hold initial board meeting. Gain written approval of articles and bylaws, authorize filing for tax exemptions, elect officers, set meeting schedule, determine and appoint members to committees, create a system of checks and balances, and take minutes.
File articles of incorporation with state and note any reporting requirements.
Develop a strategic plan (an action plan that expresses a vision of the organization’s potential and where it is going) at least for one year initially, and obtain board approval.
Develop a budget and establish an accrual accounting system for starting a nonprofit.
Develop a resource/fund development plan.
Establish a record keeping system for the organization’s official records (such as corporate documents, board minutes, financial reports, etc.).
File for Internal Revenue Service 501(c)(3) federal tax exemption by submitting IRS Form 1023 and consulting Publication 557.
File for state and local tax exemptions (such as income, sales and property tax).
Meet the requirements of state, county and municipal charitable solicitation laws and obtain appropriate permits and licenses.
Obtain an employer identification number from the IRS by filing IRS Form SS–4.
Register with the state unemployment insurance bureau.
Apply for a nonprofit mailing permit from the US Postal Service.
Obtain all needed insurance (such as directors’ and officers’ liability, property, etc.).

Some Sourced from: “Simple Independent 501c3 Manual,” Scott Michael Ringo, http://simplenonprofit.com

Through a Fiscal Sponsor many of the steps to starting a nonprofit are eliminated making it quicker and easier to create a nonprofit.

Regardless of the method you use starting a nonprofit, be determined and do not let anything discourage you. The work your nonprofit can do around the world will be worth what ever effort it takes to get it started. You can begin starting a nonprofit on the fast track by clicking to this page Start a Nonprofit and downloading the Simple Nonprofit Starter Bundle.

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