Start a Nonprofit Organization

Many desire to start a nonprofit organization, but very few do. One of the main reasons people abandon the idea of starting a nonprofit is the complexity they face in the set up process. Once faced with challenging paperwork, many abandon the set up of the nonprofit they were so passionate about. True, the paperwork to start a nonprofit can be challenging, but it is not too difficult so that most can work their way through it. Follow along below and I will give you some tips when starting a nonprofit organization.

When attempting to start a nonprofit organization, many become overwhelmed with the process and paperwork. In actuality, the process of setting up the nonprofit and paperwork is straightforward, but the information needed can be difficult to compile. Once you know the steps in creating the nonprofit, walking through them is a matter of focus. When I know the steps for something I am going to create, it makes it easier to complete it. Below are the basic steps needed to create a nonprofit.

Basic Steps for Creating a Nonprofit

1. Incorporate a nonprofit corporation in the state where your nonprofit will do business.

2. Obtain an EIN Number (Employer Identification Number).

3. Create By-Laws with which to govern the nonprofit.

4. Open a bank account for the nonprofit.

5. Fill out IRS Form 1023 for tax exemption (this form is difficult and you may want to find expert help).

6. File IRS Form 1023 with the IRS.

7. Educate yourself on fundraising strategies and begin fundraising.

As you can see, the steps are not difficult, except for the IRS Form 1023 which you may want help from an expert to complete. However, the IRS form 1023 is not so difficult that it can be filled out correctly by someone that focuses and applies themself. Again, it is the information required about the nonprofit that is more difficult to come up with and can make the process longer. Spending time working through the information details of the nonprofit, before attempting to create it, can help the process become much easier. Every nonprofit will need to provide the same basic information when doing the incorporation, and more detailed information when filling out the IRS Form 1023. By having this information figured out beforehand will make setting up the nonprofit much easier.

Some of the basic information you will need is:

1. Name, Address, Phone Number, Fax Number, Email address

These are self explanatory. Spend some good time creating a great name for your organization. The experts at Ocean Grand can help.

2. Purpose and Mission

Come up with several different lengths for each the purpose and the mission statement. This will help you provide general information as well as more detailed.

3. Biographies of Board Members

Have a biography prepared for each board member detailing their experience and work background. If your organization is being set up through fiscal sponsorship you do not need board members.

4. Budget

Prepare a budget for the next 5 years and if the nonprofit has done anything previously, detail the previous two year’s financials. This will most likely be the more difficult of the information you will need to create. Think through all the expenses including salaries, expenses and finances needed to run the nonprofit’s programs.

5. Fundraising Plan

Every nonprofit has to obtain funding from donations. Have a detailed plan on how the organization plans to obtain the funds to meet its budget every year.

6. Organizational Structure

How is the organization going to be structured? Are there employees? Be sure you can explain how the organization functions day-to-day.

7. Create Programs

Every nonprofit focuses on a challenge and then creates solutions (programs) that address and alleviate the challenge. Create the nonprofit’s solutions from beginning to end that will address the challenge the nonprofit is focused on.

Armed with the information compiled above, the paperwork required to create a nonprofit will be much easier. If an even easier approach to creating a nonprofit is desired, consider Fiscal Sponsorship instead of setting up an independent 501c3. Fiscal Sponsorship is a formal arrangement in which an already existing 501c3 public charity sponsors another organization that needs nonprofit status. Fiscal Sponsorship is much quicker, easier and less expensive than setting up an independent nonprofit. The links at the bottom of the page can help you learn more about Fiscal Sponsorship.

Learn more about nonprofit grants, Nonprofits and How to Make them Successful.

Copyright 2011 Scott Michael Ringo

How to Create Nonprofit Bylaws

Bylaws for Nonprofits

Bylaws refer to a document that a nonprofit creates that outlines how the nonprofit will conduct business. This document is used by the Board of Directors of the nonprofit to govern all the control aspects within the nonprofit. It is important when creating a nonprofit’s bylaws to exercise care because the bylaws, once adopted, will become the definitive legal document that is referred to in governance of the nonprofit.

The ways the nonprofit bylaws are used is:

  • Regulate and give structure to the nonprofit board meetings
  • State the purpose of the nonprofit
  • Protect the finances of the organization
  • Outline the nonprofit’s legal structure
  • Clearly state the financial policies
  • Circumvent disagreements
  • Explain in detail how the Board of Directors govern the nonprofit
  • Regulate the control the Board of Directors have within the nonprofit
  • Build an infrastructure for governing of the nonprofit
  • Explain the duty of officers and committees of the nonprofit
  • Outline the steps to amend and revise the bylaws

The nonprofit bylaws go hand-in-hand with the Articles of Incorporation in governing the organization and care should be given to making sure it has correct legal language. It is also necessary that the wording and language meet the Federal and state laws governing nonprofits and the regulations that govern them. This is important because once funds are given to a nonprofit there are specific regulations on their disbursement and distribution. There is also guidelines governing funds when the organization is dissolved.

A Legal Document

The bylaws must be approved and ratified by the Board of Directors to be established. This must be done at an official board meeting and also entered into the official corporate record book. Because the bylaws become a legal governing document it is wise to seek legal counsel when creating them to be certain they govern the nonprofit as wished.

Because the nonprofit is regulated by both the Federal and State government you should consult the guidance of each to make sure the bylaws adhere to them. Nonprofit guidelines can range from simple to very complex depending on the need for how strict you need the governance of the nonprofit. If the nonprofit needs to many regulations included in the bylaws the document can become very lengthy. It can be smart to limit the complexity of the bylaws so that the Board of Directors have flexibility in the way it is governed. However, if the specifics are too broad the Board of Directors may have too much leeway in its management.

Copyright 2011 Scott Michael Ringo

Why Start a Nonprofit?

More than 12 years ago I started into the nonprofit world not knowing anything about how to run or fund a nonprofit. I wanted to spend the summer doing humanitarian work in Mexico supported solely by donors. The challenge I faced was that not many others besides my family wanted to donate money to my ambitions without being able to get a tax-deductible donation for the giving. Instantly, I was thrust into the frustrating and confusing quests of starting a nonprofit.

Though starting a nonprofit can be daunting, the nonprofit industry has made the experience of creating a nonprofit much more difficult than it has to be. Starting a nonprofit can be a satisfying and amazing way to spend one’s life.

For many years after creating my nonprofit and having great success in running it, the process of getting it started was worth the effort. With the nonprofit, I can go anywhere in the world, work to help those who are less fortunate, and allow people to donate to my nonprofit. For those in the US, the giving is tax-deductible.

There are those all over the Internet that would others from starting nonprofits. Claiming that there is already too many nonprofits in existence. The fact is, many of these same people who discourage others either have started their own nonprofit or work for a nonprofit. However, the needs of those less fortunate continue to grow and not enough helping them. While there may be many nonprofits in existence much of 80/20 rule still applies. Only 20% of the nonprofits in existence actually do most of the work.

If you have the desire to become part of the 20% actually doing nonprofit work, then I encourage you to start a nonprofit because there’s plenty of room for you. The fulfillment it gives a person’s life to help others is worth the effort and expense. I have also found, the challenges of creating a nonprofit in affordable manner, learning to fund it a sustainable donor base, and the continual successful operation of a nonprofit does not have to be hard or expensive. Instead, I have devoted my time to helping those that want to easily create and run successful nonprofits. I can easily teach you how to start a nonprofit in no time at all.

Starting a non profit can be relatively simple and there are two popular ways to do so. The first is through setting up an independent 501c3 nonprofit. This is accomplished by incorporating a non profit corporation in the state in which you will be doing your non profit work. You will most likely want to apply for tax exempt status through the IRS which can be a lengthy and expensive process.

There is a simpler, much easier and quicker method of setting up a non profit through Fiscal Sponsorship. Fiscal Sponsorship allows you to have your non profit projects set up within the already existing structure of an independent 501c3 non profit. This process can be much quicker than setting up an independent non profit because it is the Fiscal Sponsor that makes the determination to include your non profit projects in within their nonprofit. In most cases, this will give your non profit projects complete 501c3 tax exempt status.