A non-profit organization is an excellent way to give back to society. However, you need a solid plan, enough capital, and the right team to be successful. It would be best if you have a well-planned strategy on how you will build your dream and at the same time, help other people in the process.
Like every other start-up, non-profit organizations have rules that govern them. It is always in your best interest to follow the set of rules and regulations regarding non-profit organizations. A common one is the tax exemption rule. You must apply for your 501(c)(3) status to be exempted from the federal income tax.
Alternatively, you can enlist the help of professionals who can help with 501c3 filing, and you’ll not have problems with the Internal Revenue Service (IRS). Remember, your primary income source as a non-profit start-up is the tax exemptions and benefits that come with the status.
Below are a few simple steps on how to begin your non-profit organization:
- Conduct Your Own Study
It will greatly help if you conduct a thorough study of all aspects needed to pave the way towards the success of your non-profit organization. Before you begin, you need to do a study or survey of your community and find out what niche you can help with. Remember, if you start a non-profit similar to an existing one, you’ll have to compete for funding, and it becomes hard for you to get your footing in the market.
In your research, identify a specific demographic you want to help, such as adolescent girls and boys, people living with AIDS, or any other feasible one. If you have good numbers and statistics to back your organization’s plan, it becomes easy to start a source fund and attract people who share the same cause.
Also, during your research, identify potential donors who are excited about your cause and can give you support. These donors may even become part of the organization’s board.
Find out the start-up costs you have to consider, such as the incorporation, staff, software, staff, and office space.
- Come Up With The Name
The name you give your organization is a valuable asset. Check the current name database in your state to avoid using an existing name or infringing on other companies’ trademarks. Pick a name that’s catchy, professional, and resonates with the group you intend to serve. Using Google search, run a trademark search on the name or have your lawyer help ensure your name is authentic.
Also, with the name, add your mission statement. Ensure the mission statement differentiates you from other organizations and identifies with your group.
- Create A Business Plan
As an entrepreneur, an excellent way to present your business idea to donors, volunteers, and the community is through a detailed business plan. Create a business plan that fully explains your business and its operations. You can write your business plan or use online templates. Ensure it has the following main sections:
- An executive summary detailing your vision and mission
- Your market analysis
- The service you want to deliver
- Your management team
- The financial plan
A business plan acts as your guide. It gives room to make decisions and spearhead your venture to success.
- Work On Your Employer Identification Number (EIN)
EIN is a set of numbers (nine digits) designated to you and your non-profit organization provided by the IRS or Internal Revenue Service. Thanks to the Internet, this can be processed any day and anytime. This number is important in helping the government and tax agencies identify your organization. Having the EIN makes it easy for you to do your tax filing.
- Apply For Tax Exemption
Depending on the 501(c) status you’re applying for, the process of applying for tax exemption is different. A great number of organizations are under the category 501(c)(3), which means that these organizations are not required to pay federal income tax. You need to apply for your tax exemption early because it takes up to a year for the status to be processed. However, note that your employees will still be required to pay their income tax.
- Finalize The Articles Of Incorporation
As soon as the articles of incorporation have been finalized, your organization will be considered a legal entity. The said document will identify the following:
- The name of your organization
- The purpose of your non-profit organization
- Any limitation on the corporate powers
- The person assigned to do service of process: This person will be the point of contact for any official correspondence or legal requirements concerning your non-profit organization. The selected person should be up to the task to avoid delays and adverse implications for the non-profit.
The board of directors can confirm and approve the articles of incorporation by affixing their signatures to this legal document.
- Set Up A Board
The board of trustees you hire will help you build and manage your organization. They allow you to make the first steps towards officiating your organization. The law requires you to have a board of directors who’ll assume the liability and governing responsibilities of the organization. Your board can have a minimum of one person or three, depending on your organization.
Eventually, your board will grow and change. The following are some of the qualities you can look for in a board member:
- Genuine interest in your mission
- Experience in being a board member
- Good leadership qualities
- No conflict of interest with the staff
- Useful and applicable expertise
- Can dedicate time to the organization
Your board should comprise people who support you, so you don’t do the heavy lifting on your own.
- Hire Staff And Volunteers
Even with the board, you’ll still find essential skill gaps in your organization. You can’t do everything on your own. Draft a description of the role you need filled and advertise it to the public. You can offer salaries or request interested persons to volunteer.
- Source Funding
Once you’ve established your non-profit organization, you must focus on getting the needed funding. Balance your fundraising between everyday activities and episodic ones. These activities can be the organization’s consistent and reliable sources of funds, supporting the team towards achieving every goal.
You can also leverage the resources and grants given by the government. Look at the government non-profit organization site and find what benefits you. For instance, you may find incredible information on government sales, surplus, financial assistance, and tax information.
Conclusion
A non-profit is an excellent way for you to serve your community. But having a cause and believing in it isn’t all you need to start your non-profit organization. You need to follow the necessary steps required by law. Hopefully, the tips shared herein are eye-opening. Approach every step with unwavering focus, and you’ll eventually emerge successful.
