Nonprofit organizations play such an important role in our society. There are so many worthy causes out there that need our support and attention, and the work of nonprofits is crucial in furthering these causes.
If you’ve been inspired by a cause and are looking to find out how to start a nonprofit, then you’ve come to the right place. There are a few things to think about when it comes to starting a nonprofit business, from legal requirements to financial logistics and the basic foundations such as manpower and choosing a name.
One thing’s for sure though, if you’ve found a cause you’re passionate about, the rest of the steps in this ‘How to start a nonprofit’ guide will be no problem at all!
Why Start A Nonprofit Organization?
There is no shortage of reasons for why to start a nonprofit group. Being part of a nonprofit or starting a nonprofit organization means that you are helping make a difference in our society, but the impact of a nonprofit group goes beyond this too.
Beyond charitable work, nonprofits can create strong community bonds through establishing a network of like-minded people, all united under one cause. Being part of a nonprofit and starting a nonprofit business can also bring new people into your life, with opportunities for life-long friendships and meeting new and interesting people!
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The feeling of collective mission or purpose that comes from being part of a nonprofit group also shouldn’t be overlooked. Teaming up with people to build something from the ground up, helping others, and working towards a goal brings a sense of purpose and gratification that many find hugely invigorating. Along the way, you may also learn new skills and discover new talents, both of which can be exciting and rewarding.
If you have the passion and the drive to create a nonprofit organization, then why not?!
How To Start A Nonprofit Organization
Whether you’re starting a nonprofit business from scratch or looking to legitimize an existing group, there are a few key steps you need to consider, including the practical logistics and the more complex financial and legal requirements.
Getting a nonprofit up and running is not something you can do overnight, but we’ve broken the process down into the basics, so that you know exactly how to start a nonprofit in the easiest way.
Find a cause
This is probably the easiest step in the process of starting a nonprofit business because chances are, if you’re reading this then you already have a cause in mind! That said, it is worth considering a few things when deciding the cause your nonprofit will support.
First off, who will this nonprofit help, and how? You should have a clear idea of exactly how you will carry out your mission in the community. Secondly, are there other groups already dedicated to this cause? While you may think the more the merrier when it comes to charity work, from a business perspective, competing with other nonprofits may make it harder for you to fundraise and survive as a charity.
Vision board your nonprofit
Another fun step in the process of creating a nonprofit organization – your vision board is where you can dream up the business you see your nonprofit becoming. Here you can brainstorm names and outline your mission statement, the central drive and aim for your nonprofit that your team can all rally behind and pursue!
Do your research
Perhaps the most important step – you need to do proper research on the legal steps on how to start a nonprofit organization, as well as the more practical aspects of running a business.
In order to register as a business, you will need to submit a form called a File of Incorporation. Research the legal requirements of this in your state, as different states may have different rules and processes.
You can visit the ‘State Links of Exempt Organizations’ site for information relating to individual State regulations.
Similarly, find out the requirements to register as a nonprofit and be tax exempt. There are different categories of nonprofit organizations but most likely you will want to register as a 501(c)(3) nonprofit.
This is really important as it means you won’t have to pay federal tax on any donations you receive.
Check the IRS regulations Compliance Guide to find out what the IRS requires for a nonprofit to be a tax-exempt public charity in your State.
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Build your nonprofit business
Take some time to consider the people, skills, and resources you need to start a nonprofit business.
Do you have a team of people onboard to help with accounting, admin, and general volunteering? It’s a good idea to have people with basic knowledge of different areas of business management, especially when it comes to accounting and finances.
In order to maintain your tax-exempt status as a nonprofit, you will have to regularly submit financial records for legal checks, and creating a nonprofit budget should also be a priority to keep you in the green!
Do you have a website set up where people can find information about events and donation schemes? Will you need an office where your team can be based from?
There are plenty of resources showing you how to build a nonprofit website, and it’s also a good idea to explore how to create a nonprofit facebook page, set up an email account and create a contact page for enquiries.
Some of these steps come with set-up costs. In fact, starting a nonprofit business could cost between $2,500 and $5,000, so a crucial question is do you have the initial funds?
When it comes to knowing how to start a nonprofit organization with no money there’s really only one answer – fundraise! Even if you have the funds to get your nonprofit up and running, fundraising is the key to maintaining a stream of income to run your business and continue carrying out your mission!
A restaurant fundraiser is the perfect way to christen your nonprofit, raise funds, and start building a network of volunteers and donors! You can choose a local restaurant near you and partner with them to host a fantastic first fundraiser event.
Choose a date, invite everyone you know, and enjoy great food. A percentage of all sales will be donated back to your cause, giving you the funds to kickstart your nonprofit with a spark!
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GroupRaise are experts at fundraising for nonprofits, and we’ve plenty more fundraising ideas, from fall fundraising specials, to ideas on a budget and kid-friendly events, on the GroupRaise blog.
Starting a nonprofit organization checklist
If this seems like a lot of information on how to start a nonprofit, this checklist should help clarify the steps and prepare you for creating a nonprofit organization.
Starting a nonprofit organization checklist is a good idea to ensure that you are meeting all the legal requirements of starting a nonprofit business and don’t miss any of the logistical steps either. It’s also easier to keep track of your progress as you tick off each step.
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- Find a cause: Do your research and choose the cause you’re passionate about!
- Recruit a team: Call on your friends, family, and community to put together a team of people who will help you start a nonprofit business.
- Write your mission statement: Clarify the mission and aim of your nonprofit organization. Write your mission statement collaboratively with your team so that everyone is united to work for your cause!
- Choose a name: Find a suitable name for your nonprofit organization.
- Find the funding: Research how much the startup costs of your nonprofit could be, think about creating a nonprofit budget, and explore fundraising opportunities to get you started.
The Legal and operational set-up
- Register as a business: Research the requirements and fill out the necessary paperwork to register your nonprofit as a business in your State.
- Register as a nonprofit organization: Research the requirements and fill out the necessary paperwork to register as a nonprofit organization and be granted tax-exempt status in your State.
- Set up a board of directors and financial team: Bring together a few team leaders to oversee the financial logistics of running a nonprofit, including creating a nonprofit budget and maintaining financial records for legal purposes.
Put it in motion
- Build a website and social media presence: Get the name and mission of your nonprofit out there by finding out how to build a nonprofit website, how to create a nonprofit facebook page, and including contact information for potential volunteers and donors
- (The best step) Start campaigning: Launch your nonprofit with a fabulous fundraising event! Organize a restaurant fundraiser to celebrate the launch with friends and family, connect with your local community, and start raising funds to work towards your mission.
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Let’s change the world!
Starting a nonprofit business is a highly admirable project, but it’s not as simple as just dreaming up a cause. That said, with this guide on how to start a nonprofit organization you have everything you need to turn your dream into a reality and start changing the world with your nonprofit!
Make sure to do your due diligence on the specific requirement for registering a nonprofit and becoming tax-exempt in your State, as this is where you could be caught out. It’s also vital to put in place a good financial team and accounting system so that you can continue to maintain your tax-exempt status each year.
With the legal aspects out of the way, remember the drive that inspired you to start a nonprofit business and have fun building your own organization that is going to make a difference in this world!
Finally, don’t forget to find out where you can host your first fundraiser by searching local restaurants near you. A restaurant fundraiser is the perfect way to kick off your nonprofit’s fundraising through establishing strong relationships with your local community and raising awareness of your new nonprofit with friends and neighbours!