How To Start a Non-Profit

If you are looking to contribute to your community, country, continent, or world through providing basic services to people in need of them without the expectation of financial return, then starting a non-profit organization is for you.  Basically, a non-profit organization deals with charitable functions where in it will provide services to those people neglected whether it is education, clothing, food, or even religion.  Now while non-profit organizations are not for making a profit, they do enjoy certain fringe benefits one of which is tax exemptions.  Yes, no income tax, all donations are tax deductible, and to some extent, no property or asset tax.  With all these in mind, if you are keen on this idea, then here are some steps that you will definitely want to follow in order to start your non-profit organization.

  • Start with the basics.  Before even contemplating on creating a non-profit organization, you must first determine two basic elements.  The first element is the mission of the organization.  This is directly relational to the objective of such an organization.  For instance, say you are concerned about the lack of basic education in South Africa.  If this is the issue that you want your non-profit to tackle, then your mission should be straightforward and clear about it.  Now, once the mission is set for the organization, you will want to choose a name that is apt to the mission you decided on.  After setting up these two basic elements, you may now be ready to move on to the succeeding steps.
  • Assemble the board.  This is the next step in the process and will entail recruiting people to function as a potential director in your board.  Now the bare minimum in terms of directorship in a non-profit board may differ from state to state.  This being said, you will definitely have to check with the requirements in the particular state where you want to incorporate.  As to picking the people to comprise your board of directors, the best way to do this is recruit members that come from different fields and industries relevant to the mission of the non-profit and those with similar thrusts.  A lawyer, an accountant, a marketing specialist, a PR guy, a financial wizard, and an operations expert that have the heart to work for this type of organization would be fantastic options in assembling your board.
  • Create the bylaws.  Now once your board of directors has been assembled, set up a meeting and start drafting the bylaws of the organizations.  This is basically the handbook which will provide rules and operating procedure which each and every member or employee will have to follow.
  • Make it legal.  Once the bylaws have been finalized, it may be time to incorporate your organization.  To do this, check with the local office of the Secretary of State for the guidelines.  The procedure and requirements will differ from state to state so make sure that you comply with all of them.  Incorporating the organization is necessary in protecting the organization and each member of it from legal issues and liabilities.
  • Fund and budget.  Bring in the funding and set the budget.  This will entail long discussions with the board to start with.  Once the operating budget is set and agreed upon, enact policies for correct bookkeeping.  You can opt to hire a private bookkeeper and accountant to take note of all expenses and donations or you can have one member of your board of directors that is versed in accountancy to handle this for you.
  • Say no to taxes.  There are basically two agencies where you will be filing the tax exemptions your organization will be entitled to.  The first is with the IRS or Internal Revenue Service which handles federal taxation.  You will need to earn the status of 501(c)(3) and to do this, you will need to accomplish and submit the 1023 form.  Don’t forget to get the IRS publication 557 for the complete instructions on how to file for this status.  The other agency that you will need to file at is the state’s department of revenue.  This is to exempt you from state taxes such as property, sales, and income tax.  

After completing this process, you have formally started your non-profit organization.  The next step will be actually operating in order to start contributing based on the particular mission of the organization. 


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