Are you passionate about a cause and interested in starting a nonprofit organization to support it?
If so, you’re not alone—according to the National Center for Charitable Statistics, there are over 1.5 million nonprofits in the United States.
There are many reasons why you might want to start a nonprofit organization.
Maybe you’re passionate about a cause and want to make a difference.
Or maybe you’ve seen firsthand how nonprofit organizations can help people and communities, and you want to do something similar.
Whatever your reasons, if you’re thinking about starting a nonprofit organization, there are some things you need to know.
A nonprofit organization is a type of organization that does not earn a profit for its owners or shareholders.
Nonprofit organizations are typically organized for charitable, religious, or educational purposes.
Many nonprofit organizations are also tax-exempt, which means they do not have to pay taxes on the money they earn.
Nonprofit organizations must use their earnings to support their mission, and they cannot distribute profits to their owners or shareholders.
Because nonprofit organizations do not have to pay taxes, they can often offer lower prices for their goods and services than for-profit businesses.
This makes nonprofit organizations an important part of the economy, as they provide goods and services at a lower cost while still supporting their mission.
The process of starting a nonprofit can be complex, but it’s definitely doable with some planning and effort. Here is a starting a nonprofit organization checklist to follow.
1. Choose a cause or issue to focus on.
The first step in starting a nonprofit is to decide what issue or population you want to focus on.
This can be anything from environmental protection to literacy assistance to providing medical care to underserved communities.
Once you’ve chosen an area of focus, research needs and gaps in services in your community to determine how your nonprofit can best make a difference.
2. Research the needs of your chosen population and area of focus.
Before you start developing your nonprofit, it’s important to have a clear understanding of the needs of your chosen population and the existing landscape of programs and services in your community.
This will help you develop a unique and impactful program that meets unmet needs.
3. Develop a business plan for your nonprofit.
Like any business, a nonprofit needs a well-developed business plan in order to be successful.
Your business plan should include information on your organization’s mission, goals, and strategies as well as a budget and fundraising plan.
4. Incorporate your nonprofit and obtain tax-exempt status.
In order to operate as a 501(c)(3) tax-exempt organization, you’ll need to incorporate your nonprofit in your state and obtain federal tax-exempt status from the IRS.
This process can be complex, so it’s important to seek legal and financial guidance to ensure you’re in compliance with all applicable laws and regulations.
To incorporate, you will need to file articles of incorporation with your state agency and then publish them on either paper or online platforms so that they can become official once filed away at their respective offices.
If this sounds like something right up your alley – take Candid’s course about Is Starting A Nonprofit Right For You?
How long does it take to set up a nonprofit?
It can take anywhere from a few weeks to a few months to set up a nonprofit organization, depending on the state in which you are registering.
The first step is to come up with a clear and concise mission statement for your nonprofit.
This will help guide your decision-making when it comes time to file for tax-exempt status, name your organization, and create bylaws.
Then you’ll need to register with your state’s secretary of state office and fill out the appropriate paperwork. You may also need to file for federal tax-exempt status with the IRS.
There are many helpful resources online that can walk you through the process step-by-step. Good luck!
How much does it cost to start a nonprofit organization?
It depends on the state, but it typically can cost between $500 and $5,000 to start a nonprofit organization.
You’ll need to file articles of incorporation with your state and create bylaws that govern your organization.
You’ll also need to register with the IRS as a tax-exempt 501(c)3 organization.
There are a number of other expenses that you may incur as well, such as legal fees, accounting fees, and website development fees.
The best way to get an idea of how much it will cost to start your nonprofit is to consult with an attorney or accountant who specializes in nonprofit organizations.
5. Develop a fundraising strategy.
One of the most important aspects of starting a nonprofit is developing a sound fundraising strategy.
Without adequate funding, your organization will not be able to achieve its goals or sustain itself over the long term.
There are a variety of ways to raise money for a nonprofit, so be creative and think outside the box when developing your strategy.
After you’ve completed all of the necessary steps to incorporate and obtain tax-exempt status, it’s time to launch your nonprofit!
This is an exciting time, but it’s also important to remember that the hard work is just beginning. Running a nonprofit is a big responsibility, but it can also be extremely rewarding.
Now that you know how to start a nonprofit organization, it’s time to get started! Use the tips and resources in this article to begin planning your new venture.
And remember, starting a nonprofit is a lot of work, but it’s also an incredible opportunity to make a difference in your community.
For inspiring stories from innovative nonprofits, check out our podcast.
The Charity Charge Show is a podcast featuring nonprofit and social impact leaders from across the country discussing social good, fundraising, innovating, and much more!
