Ready to dive in and make a difference? This quick-start cheat sheet for starting a nonprofit outlines your path to success.
01. Define Your Mission and Purpose
Start by clearly defining the mission of your nonprofit. What specific problem are you addressing, and what impact do you intend to make? This mission will guide all future decisions and activities of your organization.
02. Conduct Market Research
Research existing organizations in your area of focus. Understand the landscape, identify gaps, and determine how your nonprofit can uniquely contribute. This will help refine your mission and avoid duplicating efforts.
03. Develop a Business Plan
Outline your nonprofit’s goals, strategies, target audience, and financial projections. A well-crafted business plan is essential for attracting board members, donors, and potential partners.
04. Form a Board of Directors
Assemble a group of dedicated individuals who share your vision. The board is responsible for governance and strategic oversight. Choose members who bring diverse skills, such as legal expertise, financial acumen, and community connections.
05. Incorporate Your Nonprofit
File articles of incorporation with your state’s corporate filing office. This legal document establishes your organization’s structure and purpose. Requirements vary by state, so consult with legal professionals or your state’s Secretary of State website for specific guidelines.
06. Draft Bylaws
Create bylaws that outline the rules governing your nonprofit’s operations, including the roles and responsibilities of board members, procedures for meetings, and conflict-of-interest policies. Bylaws are essential for ensuring organizational integrity and compliance.
07. Apply for an Employer Identification Number (EIN)
Obtain an EIN from the IRS. This number functions like a Social Security number for your nonprofit, allowing you to open a bank account, hire employees, and comply with federal tax regulations.
08. File for Federal Tax-Exempt Status
Complete and submit IRS Form 1023 (or Form 1023-EZ for smaller organizations) to apply for tax-exempt status under Section 501(c)(3). This application requires detailed information about your organization’s structure, governance, and planned activities. Be prepared to demonstrate how your nonprofit serves the public good.
09. Comply with State and Local Requirements
In addition to federal requirements, ensure you comply with state and local regulations. This might include registering with your state’s charity office, obtaining necessary licenses, and following local fundraising regulations.
10. Establish a Recordkeeping System
Implement a system for maintaining detailed and accurate records of your nonprofit’s financial transactions, meeting minutes, donor information, and compliance documents. Good recordkeeping is essential for transparency and accountability.
11. Develop a Fundraising Plan
Identify potential sources of funding, such as individual donations, grants, and events. Create a strategy for building relationships with donors and securing the resources needed to achieve your mission.
12. Begin Operations and Build Awareness
Launch your nonprofit’s programs and initiatives in alignment with your mission. Engage with the community, build partnerships, and raise awareness of your cause through marketing and outreach efforts.
13. Monitor Compliance and Performance
Regularly review your nonprofit’s operations to ensure compliance with legal and regulatory requirements. Assess the effectiveness of your programs and make adjustments as needed to maximize impact.
14. File Annual Reports
Most states require nonprofits to file annual reports, and the IRS requires the submission of Form 990, which provides detailed information about your nonprofit’s finances and activities. Ensure these filings are completed on time to maintain good standing.
15. Seek Professional Support as Needed
Throughout this process, consider seeking guidance from legal, financial, and nonprofit management professionals like The Foundery. Our expertise can help you navigate complex issues and ensure that your nonprofit is built on a solid foundation.
