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