How To Start a Non Profit Organization

Use these tips to put together your NPO and make your dream a reality

Business meeting

 

Every non profit organization starts as an idea and requires legwork, investment, and passion in order to succeed. However, with the proper planning, the rewards outweigh everything that it took to launch.

Here are our tips on how to start a non profit organization:

Identify the mission. Why are you starting a non profit organization? If the answer is, "to make money," then what you want to start is a regular business. Take time to reflect on the service your non profit will provide, the role it will play in its community, the people who will benefit directly and indirectly from it, and the methods by which it will succeed in its mission. Write down your thoughts and revise them until the statement fully and succinctly captures the purpose of your organization. At that point, you've successfully written a mission statement.

Filing as a 510(c)3. Determine if your organization will qualify as a 501(c)3. This type of corporation operates with the sole purpose of charitable work and not to enrich others. They cannot profit - either the individuals that run the entity or its board members. Proper research and preparation must be taken to ensure these rules are followed strictly. Not every service organization will be a 501(c)3, but it has distinct tax advantages if you qualify.

Gather a board of directors. You can hire competent and experienced professionals to be on the board of directors. The people chosen should agree with the mission of the organization and want to succeed with the goals set forth. You can have as many board members as you need; however, most states require a minimum of three individuals.

Choose a name. Your non profit will preferably have a name that captures not only its mission, but also its spirit. The challenge is to create an appropriate, memorable name without infringing on trademark or unwittingly choosing a name that already exists. Be as exhaustive as possible in searching names already taken. You may start simply by doing a search online for your name, and see what appears. Check to make sure you cannot already find the name in the Federal database of trademarks. Search in any related publications, and look for a list of national non profit organizations. It couldn't hurt to ask your local branch of the National Council of Nonprofit Associations about potential names.

Once you feel that you've exhausted the search and conclude that your name is unique, you can do the same for your website! Again, try to select a succinct domain name as close to your chosen name as possible. You can use NetworkSolutions to check availability. Remember, not all non profits use the same top-level domain ".org". It is very common, but isn't the only top-level domain available.

File articles of incorporation. Articles of incorporation allow the organization to extend into the future regardless of your own personal involvement, even after you have moved on to another business. These articles will enable the it to be its own legally separate entity, capable of owning property and holding its own bank account separate from you or any individual. It is, effectively, your non profit management plan. Formalize your organization by incorporating in the state where it will function.

  • If you incorporate, you must have to have enough board members to satisfy state regulations.
  • In order to incorporate, you must create articles of incorporation, which legally outline the non profit's purpose and the authorities and responsibilities of the board members. Your mission statement will also be required.
  • Afterward, you can set up a bank account wherever you will receive the best service.
  • Even if you choose not to incorporate, you can still protect your chosen name by getting it trademarked through the Patent and Trademark Office.

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Write the bylaws. Bylaws will set forth the rules of operation. They should cover all the different facets of running the organization, from managing funds to the means by which you will carry out your goals.

Tax exemption. You can file for tax exemption when it comes to federal, state and property taxes. Filing for federal and property exemption is done through the IRS, while state exemption is filed through the state. Research IRS rules pertaining to tax-exempt status of non profit institutions, but you would also be wise to hire a lawyer.

Make a budget. If you are not sure how you'll make ends meet initially, or even during your marketing plan, look for non-profit incubators in your area. These will help you find resources and tools when you may not have the finances to gather them in conventional ways on your own. Your local chapter of the National Council of Nonprofit Associations is a good place to contact.

Also, thoroughly research your local non profit community prior to starting your own organization. You should also research grants for non-profit organizations. Are there well-established organizations whose mission is related somehow to yours? If so, you can often gain the support and financial investment to launch. Consider hiring a financial expert if you or other board members do not have your own financial expertise. Financial requirements and documentation are not to be taken lightly.

Get a solicitor’s license. If you are going to be raising money you may need a license to solicit in your area. You will need to check with your local and state government to ascertain this need.

Apply for a bulk mail permit. Sometimes the need will arise for you to send out a large amount of mail. Go to your local post office and inquire about getting an exemption for this. Going this route will also get your organization a reduced postage rate. 

Get insurance. It is always a good idea to have insurance. This will protect the organization and its members from litigation.

The steps involved in beginning a non profit organization are important to its success. You may very well want to hire a lawyer who can help you create your articles of incorporation, review all legal documents, and help you file for tax exemption with the IRS and the state. These items and the steps will create a cohesive plan of action. And once done, you can enjoy the happiness you bring into other lives through the charitable work done.

 

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