So you have a great idea, a worthy cause, and a lot of ambition. Time to start a nonprofit! Not so fast. Running a nonprofit can be a wonderful way to fulfill a mission, but it requires meticulous planning and a lot of patience. Many nonprofits wait more than a year to obtain IRS approval. Jennifer Chandler, Vice President at the National Council of Nonprofits, explains how to do your homework.
- Understand what a nonprofit is: a tax-exempt organization that serves the public interest. There are several different subtypes, however. The Library of Congress offers a handy breakdown of essential reading that will help you understand a nonprofit’s funding, taxation policies, and other regulations. These vary by state.
- Study the landscape and see if there’s a nonprofit that already addresses your mission. It will be very hard to secure funding if you’re duplicating efforts. This research isn’t always easy to do, because a massive nonprofit database doesn’t exist, but Grant Space offers the best research tools.
- Write a mission statement that’s clear, focused, passionate and outcome-motivated. Remember: Most nonprofit funding comes from individual donors. You’ll need to inspire people to give, and a persuasive mission statement is your first step.
- Find friends. You’ll need a board populated with people who share your passion as well as volunteers to get the nonprofit off the ground. Look for the talents you’ll need, from a marketer to a social media guru. The number of board members you’ll need varies by state.
- Hire an attorney and a CPA to guide you through the filing process. This can speed things up, especially if you’re able to use the streamlined IRS Form 1023 E-Z. An attorney or CPA will know whether you qualify.
- Vounteer your services at another nonprofit while you’re waiting for approval. They’re always looking for skilled volunteers. Add this pro bono work to your resume. Nonprofit employees tend to want to work with people who already understand their environment.
For step-by-step help, visit the National Council of Nonprofits.
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