Starting a Nonprofit?
So, You Are Starting a 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.
- 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
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