Do you have a desire to create change? Do you have a desire to uplift many in your community? Are you passionate about improving lives of people or creating a worldwide impact? Do you have a burden to see things get better around you? If you answer yes to any of the above questions, starting a non-profit organization, will be a sure way for you to fulfil that desire.
It may be that you have always wanted to fulfil this desire, but you don’t know how to go about it. You have come to the right page then, as we will help you achieve that desire. In this practical guide, we will be providing you with all the detailed information you need to start a non-profit organization. This is not a write-up about what a non- profit organization is, but everything you need to know as you embark on the journey of uplifting lives in your community and the world at large.
A non-profit is run like any other business, which means that there are rules, laws and processes that must be adhered to, but as the name suggest, the aim of your non-profit organization is not to make money, though there are huge benefits attached to serving others.
According to the National Center for Charitable, Statistics shows there are over one million nonprofits registered in America alone, covering community charities, private organization and other nonprofit societies.
Depending on the country or the state where you will be operating your nonprofit from, it is very important to note that every state or country have different ways in which they register nonprofits and though your nonprofit will have staff, bulk of your revenue will be used in supporting the aim, to which the nonprofit was established.
Since we have done some clarifications, we will now go straight to highlight all you need to put in place, before starting your nonprofit organization.
Here are the practical steps to take for you to start your nonprofit organization:
- CARRY OUT RESEARCH.
We have already highlighted above according to statistics that there are over one Million registered nonprofits in America for instance. It is therefore very important that you carry out a research before you set up your organization.
Your research will enable you to ascertain if your idea is unique or if there are other organizations already doing the specific thing you want to do. There is no doubt that you may likely fail if you do not carry out the research, as you will not know if other organizations (nonprofit, for-profit, or government) are already doing the same or similar work in your community.
Without carrying out research it will be difficult to get support if you are just duplicating existing services rather than improving or adding to them.
If you don’t carry out research, you will not be able to know for instance, that public charities are organized and operated exclusively for exempt purposes set forth in section 501(c)(3) of the Internal Revenue Code.
Forming a new nonprofit might be the most complicated way to act on your passion to serve your community. The biggest challenge for you will be how to develop, generate and maintain reliable streams of income.
If through your research, you were able to find out that there is need to start your nonprofit organization and you have identified your sources of funding, then you can proceed to the next important step.
- CHOOSE A NAME FOR YOUR ORGANIZATION
When it comes to naming your nonprofit organization, the name you choose will either make or mar you. You have to be very careful with the words or letters you choose. Every state or country, as we stated earlier have different guidelines for choosing a name, so you have to find out the state guidelines with regards to names, before coming up with one.
Try as much as you can to choose a name that is relevant to your objectives.
- SET UP A TEAM
A nonprofit organization is not like a regular business organization, where you employ staff, who may only be interested in earning salary at the end of the month. For a nonprofit organization, you will have to assemble like-minded people, who will help you accomplish the set objectives.
The like-minded individuals you will assemble will serve as the board, which as your nonprofit’s governing body, will fulfils a variety of roles and legal responsibilities. In order to carry out these duties effectively, the board is bound to change as your organization grows and matures. While recruitment is an important step in this process, a systematic approach to board development, including orientation, training, evaluation, and the cultivation of prospective board members, is critical to ensuring its long-term success.
The team members must be motivated to achieve one agenda, and each member of the team should have their defined duties and roles from the beginning, as everyone strives to work towards the organizational goal.
- WRITE A BUSINESS PLAN
It was a wise man who said that he who fails to plan, has already planned to fail. Your nonprofit organization, should be treated as every other business venture, as your business plan will serve as a road map, as you work towards achieving your goals.
What to include in your Nonprofit Business Plan
The mistake many founders make in the beginning stages is that they skip ahead to incorporating their nonprofit without spending the time to create a business plan.
And while a “business plan” may sound like it only applies to “for-profit” organizations, nothing could be further from the truth. As you will quickly discover, potential investors, donors, and board members will all ask to see copies of your business plan, and if you don’t have one, you will miss out on a lot of opportunities.
Your business plan should be able to cover the followings:
– Executive Summary: This is a short overview of your business plan.
– Products and Services: Here you fill out the type of value you will be creating and what makes it unique. Besides membership and events, many nonprofits offer additional merchandise like custom t-shirts to help bring in some extra money.
– Market Analysis: In this area, you will explain what the market landscape looks like: your competitors, your stakeholders, and a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) on why your organization will succeed.
– Marketing Plan: A strong marketing plan is arguably the most important thing when it comes to nonprofit success or failure.
A strong marketing plan should be able to explain who you will serve, where to find them and how you will convince people to support you.
– Operational Plan: The “operational plan should be able to answer the question of where will your office be, what supplies and equipment will you need, how you will deliver your services and what kind of staff or volunteers you will need.
The bulk of the operational costs for a nonprofit organization comes from grants and donations, it then implies that you should have a very detailed plan, as no donor will be willing to give you funding if you don’t have a business plan. Your business plan will also help you when you are recruiting for board members and volunteers.
- STATE YOUR MISSION AND VISION
No one will be willing to become a member of your team if they don’t know the direction you are heading. So you should define your organization’s mission statement and vision, so everyone can work towards achieving the goal
Will you be able to answer if you are asked the question, what inspired you to start a nonprofit organization? Or will you be able to clearly articulate the issue or need you see in your community that is driving you to act?
As a visionary, you may have already understood your motivations and the goals of your nonprofit’s work, but you have to use your best efforts to communicate them to others.
A strong mission statement should accomplish all of the following:
- Clearly express the mission of your nonprofit.
- Focus of your organization’s work and relationships.
- Guide your nonprofit’s growth and development.
- Explain your purpose to constituents, donors, and funding bodies.
Remember, a mission statement does not need to explain everything about your nonprofit and its work, but it does need to clearly evoke the essence of your drive and purpose.
- REGISTER YOUR NONPROFIT
You will not want to operate a nonprofit that will depend on donations and grants, and no one knows where you are existing or operating from. Having a formal structure will give credibility to your programs and services. More so, the corporate structure will limit the liability of your organization’s officers and directors. The revenue board will also require organizing documents and governance policies and procedures, and you will not have all these if you don’t register your nonprofit organization.
It is therefore very important to get your nonprofit organization registered. Check with the state authorities and file all paperwork accordingly.
As part of your registration process, you should apply for exempt status with the Internal Revenue Service (IRS).
With your registration out of the way, you should also endeavor to register with your state agency, as every state have an office charged with the oversight of charitable organizations and charitable solicitations (usually the Attorney General). If you plan to solicit contributions in other states, you may need to register there, too.
The final stage of your registration process, after you have gotten your tax exempt, is to file for form 990 with IRS. The form 990 will at the end of the year show your finances, activities, governance processes, directors, key staff, etc., and this form 990 will be open to public inspection.
- START FUNDRAISING FOR YOUR CAUSE
Raising funds for your nonprofit organization is the most tasking and enjoyable process of running a nonprofit. So now that you have registered your organization, you should now proceed to start raising funds. Without the flow of funds you will not be able to achieve your organizations objectives.
The most daunting task of running a nonprofit is fundraising, and it requires considerable time and investment. We promised that this is a practical guide from the beginning, hence we have simplified the process, including the difficult task of raising funds.
In the business world, organizations make the majority of their revenue from products and services. Nonprofits differ in that they have additional major sources of revenue. Some of which are:
– Fees for Services and Goods from the Private Sector
– Membership dues and event tickets
– Private Contributions
– Regular Individual Donors
– Corporate Sponsors
We will therefore be highlighting the various ways you can easily and quickly raise funds for your nonprofit organization, taking advantage of the above sources of funds.
- Online Donations
Using a fundraising software, you should be able to set up online donation platform which can accept gifts, pledges and donations. There are various fundraising software’s you can find online that will also be able to handle event planning, data reporting and registration features also.
You can also set up a donation page on your website or on Facebook and receive donations from people all over the world.
- Text-to-give tools:
Now that your fundraising platform is in place, you will want to offer easy ways to give and accept donations. In addition to online giving, text-message-based donations are a great way for your nonprofit’s supporters to give on the go.
There are many donor organizations who are willing to support your cause in forms of grants and donations. All donor agencies requires that you apply for them. You should research on various donor agencies supporting your type of nonprofit and apply for grants. You may have to request for professional assistant if you don’t know how to apply for a grant, as not meeting the strict grant application requirements may disqualify you from getting the grant.
Depending on your type of nonprofit, you can organize events or gala nights and take gate fees. If it is a high profile event, you will be able to sell high tickets for special privileges during the event. For instance, you have charge a high ticket to those who want back stage access or who wants to take pictures with some celebrities who graced your event.
- IDENTIFY LOCAL PARTNERS FOR YOUR NONPROFIT.
Raising funds is not just enough to run your nonprofit organization, you should be able to identify a few local partners in your community who can help support your launch. You need to have a local network of partners as this will be beneficial, as it will build momentum and keeps everyone excited.
Your community partners will become essential once you actually start reaching out to constituents and donors. It can be very difficult to engage new stakeholders without already having a shared connection.
The following local partners will useful to your mission:
- Local businesses
- Schools and local universities
- Other nonprofit organizations
- Local municipal offices or agencies
You should reach out to these partners and emphasize what you have to offer in the arrangement, as those who agree to work with you will benefit from free publicity, and they will also get boosted corporate social responsibility.
Remember, that you founded a nonprofit organization to better your community and address a specific problem. Your founding leadership is likely already well connected, but expanding your local network is always a good move. The right connections will unlock new donor bases, marketing outlets, and opportunities to directly pursue your mission.
Can You Make Money From a Nonprofit Organization?
The short answer is yes: just because it’s called a “nonprofit” doesn’t mean you won’t make any profit!
However, all of the income that the nonprofit makes must be placed back into operating activities, whether this is for rent, serving the clients, or for paying staff. It must also relate back to the mission and the community you serve. This means that the income your nonprofit organization makes cannot be distributed back to the board or anyone else connected to the nonprofit.
In addition, nonprofits can make money doing other activities, but if they spend too much time on these activities, they risk having their 501c3 status revoked. Some of the profits they make may also be taxable, depending on the activity.
If you find that the above steps sound unattainable, you may opt a different route to starting your nonprofit. You may consider volunteering your services to other established nonprofits with the same mission as yours or those that are yet to be established in your community. These organisations might act as your fiscal sponsor thus enabling you to seek grants under their task exempt status and start you own nonprofit organisation.
So are you willing to step out a make a difference? You should, as your community and the world needs you to contribute your quota. Action is cure! Take that bold step now!
What are your thoughts about this guide and do you have a business idea you want us to write about? Let us know in the comment section.