25 Tips for How to Start a Nonprofit
You’ve got a passion for helping others and want to make it official by starting a nonprofit. Congratulations! Before you dive into the deep end, start with these five initial “reality check” questions. Pass the test? Keep going for more tips and ideas.
- Is There Overlap? - Is someone else already doing the same work? If so, should you join them or go work for them instead of starting your own nonprofit? Good intentions do not make a nonprofit necessary if another organization is already accomplishing your mission.
- Do You Understand Nonprofit Reality? - You no doubt have a passion for your cause. However, do you realize that once you start your nonprofit, you will end up spending 50 percent of your time raising money, 20 percent managing staff and volunteers and the other 20 percent on administrative work? Are you OK with this? That leaves you 10 percent of your limited time to spend on homelessness, human trafficking, poverty, education or whatever your passion might be.
- Do You Have Mission Keepers? - Can you find three to four people (at least) who are willing to sit on your board of directors? And, are you willing to listen to input from a board of advisors? It is hard to hear constructive criticism of your “baby,” but you need people who will hold you accountable.
- Do You Have a Compelling Story? - The nonprofit world is quite competitive. Just slapping up a website and a donation link probably won’t gain you much of an audience. Do you have a story that is clear and compelling? You will need to tell your story with excellence and intentionality. Be ready to lean on professionals for this.
- Can You Handle Paperwork? - Are you willing to go through all the piles of paperwork the IRS will send you to hold you accountable? It is not for the faint of heart.
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Establish a Clear Mission and Story
- Draft a Mission Statement - Put it in front of 10 people and get feedback. Make sure you get input from people of varying races, ages and genders.
- Write Your Vision Statement and Story - This is different from the above. Why is there a need for the nonprofit and how will your organization fill that need? You should be able to clearly communicate the mission, vision and founding story.
- Select a Name - This is trickier than you might think. Select a moniker that is not cliché or cheesy and that clearly communicates who you are and what you are about. You’ll also want to check that your name isn’t well-known in another part of the country — this will make it difficult for potential donors and volunteers to find your nonprofit online.
- Start Thinking Through Resources for Telling Your Story Well - Be willing to hire a good web designer and graphic designer, photographer and potentially a videographer. All these visual elements help to tell the story and allow people to enter your world. It needs to be done well, and the site should be easy to navigate or people will move on to something else.
Establish a Nonprofit Infrastructure
- Diversify Your Board - Identify three to five people who want to help hold you accountable. They must love the mission and be able to tell you when you are wrong. Select people who have a variety of skills and experience. For instance, if budgeting isn’t your forte, ask someone to serve who works in finance or accounting.
- Draft Bylaws - These will guide the nonprofit and board of directors. Plan for potential conflicts of interest, any compensation policies and fundraising guidelines. It’s better to plan ahead than run into a situation you haven’t considered.
- File the Certificate of Incorporation – You’ve already determined your name, but now you need to decide where your nonprofit will be headquartered and incorporate in that state. (Generally, forms are available on your state’s secretary of state website.) What are the benefits? For one, your personal finances will be protected and separate from the nonprofit’s finances. You’ll also be eligible for certain public and private grants.
- Look Up Local and State Regulations - Different rules may apply based on where you’ve incorporated. If your group is more national in scope, it pays to do your research on which states are most friendly to nonprofits.
- Obtain an Employer Identification Number (EIN) - Also known as a federal tax identification number, you’ll need this for hiring and issuing tax documents to donors for their yearly contributions.
- Open a Bank Account - Establish a check-signing protocol and other financial systems for reporting year-end results, such as an annual report to donors and volunteers. Genius Tip: Pull volunteer statistics and data with SignUpGenius’ reporting tools.
- Apply for Your 501(c)(3) Status with the IRS - This can cost around $2,000 in attorney fees, but you might be able to find a kind-hearted attorney who will do this pro-bono or for a discount.
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Recruit Volunteers and Start Fundraising
- Find Office Space and Equipment - This will be increasingly important as you grow. If you’re not operating from a home office, think about finding a location that’s close to the people you serve. Purchase any needed equipment or software that will aid your mission.
- Begin Recruiting Volunteers and Staff - You may start as the only “employee” of the nonprofit. Volunteers will power your mission, and word-of-mouth is a powerful recruiter. As you’re able to hire, develop a staff handbook with clear policies and procedures. Genius Tip: Create an online sign up for your events, volunteer opportunities and fundraisers. Send email invitations or post to social media to maximize help.
- Diversify Your Volunteer Base - Never underestimate who might want to join your cause. More than ever, people want to make a difference in their city, state and country. While they can’t change the political climate, they can help their neighbors and contribute to feel-good causes. Genius Tip: Learn tips for how to increase volunteer support and retention.
- Plan Volunteer Policies - Volunteers are a tremendous asset for any nonprofit. (They’re also more likely to turn into donors.) Establish clear policies for volunteers, such as age requirements and waivers that volunteers need to sign. Genius Tip: Use SignUpGenius Pro to include attachments on your online sign ups with volunteer instructions and policies.
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- Ask for Fundraising Advice - Buy lunch for a seasoned development officer and ask for advice as you start fundraising. They’ll be able to fill you in on common pitfalls and recommend donor management systems and processes.
- Set a Fundraising Goal - What do you want to accomplish? Start small and set a budget for the year. From there, you’ll want to plan your first big event and start reaching out to potential sponsors and donors. Genius Tip: Start with these 40 tips for nonprofit fundraising.
- Diversity Your Donor Base - Donors come in all forms and tax brackets, so never underestimate the college kid who is passionate about your cause or the 10-year-old who wants to hold a lemonade stand fundraiser. Charitable giving patterns are changing, according to The Chronicle of Philanthropy, which reports that the wealthiest Americans are giving a smaller percentage of their income to charity, while poor and middle-income people are giving more.
- Spread the Word - Decide the best platform for your message. Social media is an avenue that often works to reach many people at once (though you may have to pay to be seen). Email campaigns, partnerships and old-fashioned boots-to-the-ground recruiting tactics are not to be overlooked.
- Report Results - As you start your nonprofit, make sure to share news about reaching fundraising goals and milestones with donors, volunteers and interested people on your email list. Good results can have a snowball effect and make fulfilling your mission in the years to come easier.
The world is a better place when ordinary people live with selfless ambitions to serve others. Good luck as you start down the nonprofit path.
Andrea Johnson is a native Texan now living in Charlotte, N.C., with her husband and two daughters. She enjoys running, photography and good chocolate.