Start a Non-Profit Organization

Start a Non-Profit Organization

Use these essential tips to put together your non-profit organization and make your dream a reality.

Every non-profit organization starts as an idea and requires legwork, investment, and passion to succeed. However, with proper planning, the rewards far outweigh the effort required to launch.

Here are our tips on how to start a non-profit organization:

Identify the mission. Why are you starting a non-profit organization? If the answer is "to make money," then what you want to start is a regular business. Take time to reflect on the service your non-profit will provide, the role it will play in its community, the people who will benefit directly and indirectly from it, and the methods by which it will succeed in its mission. Write down your thoughts and revise them until the statement fully and succinctly captures the purpose of your organization. At that point, you've successfully written a mission statement.

Filing as a 501(c)(3). Determine if your organization will qualify as a 501(c)(3). This type of corporation operates with the sole purpose of charitable work and not to enrich others. They cannot profit—neither the individuals who run the entity nor its board members. Proper research and preparation must be undertaken to ensure these rules are followed strictly. Not every service organization will be a 501(c)(3), but it offers distinct tax advantages if you qualify.

Gather a board of directors. You can hire competent and experienced professionals to serve on the board of directors. The people chosen should agree with the mission of the organization and want to help achieve the goals set forth. You can have as many board members as you need; however, most states require a minimum of three individuals.

Choose a name. Your non-profit should preferably have a name that captures not only its mission, but also its spirit. The challenge is to create an appropriate, memorable name without infringing on trademarks or unwittingly choosing an existing name. Be as exhaustive as possible in searching for names already taken. You can start simply by doing an online search for your name and seeing what appears. Check to make sure the name is not already in the federal database of trademarks. Search related publications and look through lists of national non-profit organizations. It also helps to ask your local branch of the National Council of Nonprofits about potential names.

Once you feel that you've exhausted the search and concluded that your name is unique, you can do the same for your website! Try to select a succinct domain name as close to your chosen name as possible. You can use Network Solutions to check availability. Remember, not all non-profits use the ".org" top-level domain. It is very common, but it isn't the only option available.

File articles of incorporation. Articles of incorporation allow the organization to endure regardless of your personal involvement, even after you have moved on to other ventures. These articles enable the organization to be its own legally separate entity, capable of owning property and holding its own bank account separate from you or any individual. It is effectively your non-profit management plan. Formalize your organization by incorporating in the state where it will operate.

• If you incorporate, you must have enough board members to satisfy state regulations.
• To incorporate, you must create articles of incorporation, which legally outline the non-profit's purpose and the authorities and responsibilities of the board members. Your mission statement will also be required.
• Afterward, you can set up a bank account wherever you receive the best service.
• Even if you choose not to incorporate, you can still protect your chosen name by getting it trademarked through the Patent and Trademark Office.

Write the bylaws. Bylaws will set forth the rules of operation. They should cover all the different facets of running the organization, from managing funds to the means by which you will carry out your goals.

Tax exemption. You can file for tax exemption regarding federal, state, and property taxes. Filing for federal and property exemption is done through the IRS, while state exemption is filed through the state. Research IRS rules pertaining to the tax-exempt status of non-profit institutions, and consider hiring a lawyer.

Make a budget. If you are not sure how you'll make ends meet initially, look for non-profit incubators in your area. These will help you find resources and tools when you may not have the finances to gather them conventionally on your own. Your local chapter of the National Council of Nonprofits is a good place to contact.

Also, thoroughly research your local non-profit community prior to starting your own organization, and look into grants for non-profit organizations. Are there well-established organizations whose missions are related to yours? If so, you can often gain support and financial backing to help launch. Consider hiring a financial expert if you or your board members lack financial expertise. Financial requirements and documentation should not be taken lightly.

Get a solicitor's license. If you are going to be raising money, you may need a license to solicit in your area. Check with your local and state government to determine if this is necessary.

Apply for a bulk mail permit. If you need to send out a large volume of mail, go to your local post office and inquire about getting an exemption. This will also grant your organization a reduced postage rate.

Get insurance. It is always a good idea to have insurance. This will protect the organization and its members from litigation.

The steps involved in beginning a non-profit organization are vital to its success. You may want to hire a lawyer who can help you create your articles of incorporation, review legal documents, and assist with filing for tax exemption with the IRS and the state. These steps will create a cohesive plan of action, allowing you to enjoy the positive impact you bring to others through your charitable work.