Given the important role that nonprofits play in the economy and the lives of individuals in the US and beyond, community leaders are always interested in starting nonprofits. As one of the people with a desire to create a nonprofit, there are various considerations that you need to take into account to make it official. Here are the nine things you need to consider when starting your nonprofit.
- Do research
Before anything else, carry out research on the state of nonprofits in your region and the area that you want to focus on. Throughout your research save all the qualitative and quantitative data you gather because it will be helpful and will act as your base data when monitoring and evaluating the work of your nonprofit in the future. The research will also help measure your impact and know what the area you are focusing on looks like.
- Know your purpose and business plan
If you want to get more board members and collect starting capital or support, you need to have a clear idea of what you want to do and how you will do it. Give the community the reason to support you and volunteer or donate to your cause. Every developing nonprofit organization should prepare key documents that state the mission, vision and values and business plan. Remember that these documents can be prepared in a draft form. A final version of the document can be created with the help of your board.
- Build your team
Building your team is a critical step that you should never skip when starting your nonprofit. Consider the board that will help govern your charity by first understanding the legal requirements for a board of any nonprofit. Find crucial board members like the secretary, president and treasurer. The most important thing here is to look for people with proper qualities for the board.
- Register your nonprofit
Depending on the state you want to establish your operations, understand the requirements and register your nonprofit. Pick a name, create and file an article of incorporation. You should also pay the necessary fees after which you should go ahead and prepare the bylaws.
- File EIN (Employer Identification Number)
When you are done registering your nonprofit, you are then required to file an EIN with IRS. For a nonprofit and for-profits, this is a critical step. It is basically a Social Security Number. Once you apply online, you will receive your EIN immediately. You should do this as a CEO or founder of a nonprofit.
- File the IRS tax-exempt status
Tax-exempt status is a key determinant of whether an organization should be a nonprofit or a for-profit. As you register your organization, you will need to consider this before you do everything. The tax-exempt status has benefits, which include exemption from federal and state taxes, and donors will get a tax deduction for their contributions. As a nonprofit, file a tax-exempt status to benefit from these two.
- Develop a fundraising plan
To help you get donations from different sources, you need to have a comprehensive fundraising plan. You will need to have some amount for branding, website creation and overhead costs. Think of ways you can get this money and think of any potential startup costs. Keep things simple.
- Set up an office
Once you are done with the registration process. It is now time to start doing the work. Set up an office and working space for your staff. Identify the costs and consider the projects you should work on as you start.
- Always be compliant
Even after getting all you need from the relevant agencies, remain compliant at all times. File the 990 Form annually and abide by your bylaws. Hold regular board meetings, write, and keep meetings. Keep the applicable licenses and pay taxes on activities that are not related to your operations.