Guest Contributor

7 Critical Things to Consider Before Starting a Non-Profit

By | Tracie Johnson | Freelance Writer

Creating a nonprofit is a fantastic way to give back to the community. But there are several things to consider before you get started. Nonprofits are special entities that require proper paperwork, money, and dedication. Here are some tips If you want to know what you need to do to get lunch for your nonprofit.

1. Creating a Mission

A mission is the foundation of an organization and the reason for its existence. You will need to create a mission when planning your nonprofit. Ask yourself why these questions to better defined your nonprofit’s mission:

  • Why do you want to start a non-profit?
  • What problems will your nonprofit solve?
  • How will your nonprofit impact the area you serve?

After answering these questions, sum them up in a mission statement. A mission statement is a brief description of your organization. Mission statements are important because they serve as an introduction to the community and donors. It should be detailed and concise and give people a clear idea about the organization.

2. Naming your Organization

Creating a name for your organization might seem like an easy task, but it is something you might have to spend more time on than you think. The name you choose will have a high impact on community outreach.

There are millions of nonprofit organizations in the United States, and you will want to choose a name not already used. The IRS Tax Exempt Organization Search is a great tool to help narrow your options.

3. Creating A Budget

It takes quite a bit of money to operate a non-profit organization. Creating a budget can help plan out expenses that are sure to occur. Begin with your start-up expenses like the fees needed to incorporate your organization and register the 501(c)(3) with the IRS. Then factor in the operational cost like utilities, staff salaries, furniture, computers, phones, fax machines, and nonprofit software.

This is also when you should start thinking about fundraising. You will need a steady supply of revenue to keep your nonprofit operating. Planning for fundraising can help eliminate blind spots and avoid budget issues. Begin planning your fundraising at least six months to a year in advance.

4. Hiring Talent

Starting and managing a nonprofit takes expertise, experience, passion, and hard work. This is why you should recruit the most qualified professionals available. Staff is responsible for maintaining financial records, approving budgets, and negotiating with donors and other organizations.

Whether you are starting a large or small nonprofit, it will need an executive director and a board of directors. In the United States, all nonprofits should have a board with at least three members. Choose these people carefully as they are responsible for every major decision and can either be an asset or a liability.

5. Research

Research can give you a better scope of the problems your organization will need to tackle. Consider these questions:

Are there specific issues other organizations are not solving that your organization could solve?

  • Is there a proven need for your organization’s services?
  • How many people need your organization’s services?
  • Is your organization creating new services in the area?

Analyzing these questions can help you develop a better business plan for your nonprofit. It can also help you plan out future services and programs.

6. Tax Exempt Status

Having non-profit status means that you are tax-exempt in the United States under IRS code 504(c)(3). This will mean that you will not be taxed for any donation your organization receives.

There are a couple of steps that you need to take before you can receive tax-exempt status. First, you will need to make your organization a corporation. Once incorporated, you can then file an IRS 123 form to gain tax-exempt status.

7. Networking

Networking is important in any business, but it is especially critical for nonprofits. Meeting and communicating with other nonprofits can be a source of advice on how to run your nonprofit better, help with your tax status, and help you find donors and other financial resources.

Closing Thoughts

Starting a nonprofit is possible, and anyone can do it. But be prepared for all of the work and time that it requires. Having a good foundation can help what makes your nonprofit succeed and grow. Use these tips to make a difference in your community!

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