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How to start a nonprofit

Wondering how to start a nonprofit organization? Here's a step by step guide to help you in what to do before and during the nonprofit formation process.

If you’re looking to figure out how to start a nonprofit organization, that likely means you’re passionate about a particular cause, or maybe you’re looking for a sustainable way to help a particular community. And that’s great!

We’re here to help you do just that. It’s why we exist: To help you help others.

There are tools and templates out there that can help you through this process on your own.

You may want to look into legal help if it’s available to you, but if not, that’s okay! You can do it yourself. It’s important to know what information and resources you’ll need to start your nonprofit.

By no means are we attorneys and this is not a comprehensive list, but we are going to go step by step to help guide you in what to do before and during the nonprofit formation process.

Here's how to start a nonprofit in 5 steps!

Develop a plan

develop-plan

If you are looking to create a nonprofit, it is likely you already have a cause in mind.

It might be a cause or a group of people that are very near and dear to your heart.

That’s wonderful!

To ensure the success of your organization, you should first make sure there is an existing need. Determine what needs are not being met or filled by other organizations, then focus on how your organization can fill that gap. This will set you apart from the other organizations and lead to your success.

Once you’ve identified the need your organization will fill, you should next identify what type of nonprofit organization you will apply for.

We often assume that nonprofits automatically have 501(c)(3) status, but there are actually 29 different tax-exempt statuses with the IRS. Don’t worry, there is a good chance that you will fall into the 501(c)(3) category.

In order to file for that status, your organization will have to meet these criteria: you will serve a charitable, religious, educational, scientific, or literary purpose; will not participate in political campaigns; and will not distribute their assets for personal gain or benefit.

If that is not the case for your organization, you can apply for another type of tax-exempt status. The most common are 501(c)(4) which is a Social Welfare Organizations and Social Advocacy Groups (often includes political lobbying), a 501(c)(6) for Trade or Professional Association, or a 501(c)(7) for a Social or Recreational Club. Here is a list of exactly what types of tax-exempt organizations that the IRS will allow.

The next step is to create a mission statement. You should establish your vision, which is what you want to see your organization accomplish, and your mission statement, which is how your organization will make that happen.

This mission can change over time, but you’ll want to let readers know what you think your purpose is. Here are a few excellent examples of mission statements to get you started.

Recruit board members

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You will also need to gather a board of directors by the time you register your organization. In most states, your nonprofit organization is legally required for to have a board of directors. The most common three board member roles: President, Secretary, and Treasurer.

The names of the founding board members must be listed on your Articles of Incorporation and their roles will be stated on your 1023 Form when filing for 501(c) status.

Make the organization the best it can be by taking advantage of your board member’s diverse skills and talents.

Whether you have a working board doing the leg work, or choose to have a governing board that oversees the operation, there are a few things you should look for when recruiting those members:

  • Be sure your members are genuinely passionate about the mission and are there to provide more than just money. They will be passionate advocates and great resources for your organization for years to come.
  • Make sure you find individuals who come from diverse backgrounds and have different areas of specialty. This will make their insights more valuable and lead you to more well rounded decisions for your business.
  • Make sure the number of board members adds up to an odd number. There will be a lot of voting going on in the future. Having an odd number of board members will ensure that there will always be someone to break a potential tie.

Get set up legally

set-up-legally

The next step is to get set up legally as a nonprofit. This may seem like a daunting task, but there are many resources out there to help! We’ll walk you through the basic steps to getting started.

The first step is to incorporate the nonprofit. The Articles of Incorporation is a legal document that provides your state with your nonprofit organization’s basic information.

Here’s what you’ll need:

  • Legal name of the nonprofit
  • Name and address of the founder
  • Principal office address (can be a home address)
  • Name and address of Resident Agent (the official person that will receive all correspondence; most often RA’s are a founder or an attorney)
  • Purpose of organization
  • Names and number of directors on the organization’s board
  • Legal statements of the organization’s intentions and commitments

While most nonprofits tend to register with their state as a corporation, you may opt to register as an association or trust.

The second part of the legal process is to file for an EIN number with the IRS. After incorporating, you are then required to get an EIN (Employee Identification Number) with the IRS. An EIN is basically a Social Security Number for your nonprofit. You can apply for an EIN here.

The last step of the process is to actually file for 501c status with the IRS! Just to double-check, you can click here for a checklist that explains exactly what you need before starting the application process for tax-exempt status with the IRS.

And this is another checklist that will walk you through the actual application process step by step.

There shouldn’t be much information that you don’t already have from your previous paperwork. You will just need to check here for the forms you will need to fill out prior to submitting your application.

And beware, there is a fee for the application as well. The application process can take as little as two months or up to one year for the IRS to approve your 501(c) designation. But once your application is approved, you can start the fun work and start raising donations!

Set up an online donation platform

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You have worked so hard to get your nonprofit off the ground and running, so now you need a way to raise money for your cause.

Anedot is a cost-effective and easy way to provide your supporters with a way to give to your organization. We are here to help you help others, that’s why we make it so simple to use our platform! We have helped more than 20,000 organizations raise funds for their causes, and we’d love to help you too.

It’s quick and free to apply for an account with Anedot, and you can do so by clicking here!

With Anedot, you can create as many donation pages as you like and share them with your audience. The pages are fully customizable and we have a full resource library to walk you through how to best set those pages up.

For example, check out this guide to set up the perfect donation page that will convert your supporters into donors. And of course, our team is always here to help if needed.

Build a community of supporters and donors

build-community-donors

The final step is to build your community. Your nonprofit is operating, and that is amazing, but now it's time the public hears about your cause.

You should consider how you will communicate with your audiences. It can be through emails, TV ads, letters, social media, or any other form of communication.

Just be sure to sit down and create a strategic plan that will get the message out to your potential donors in the most effective ways.

Creating a website, building an email list, cultivating a social media following, creating Facebook groups, using petitions and surveys, and running effective outreach and awareness campaigns are great ways to start off spreading the word online and building up your audience to create a real community. Here are a few social media tips that might help!

Hosting events and creating volunteer opportunities are great ways to get people involved with your organization in person as well.

The goal is to build a community of supporters who will donate to your organization and get invested in its success. If you allow people to feel like they own a piece of your success, they will be more likely to spread the word to their friends and family, share your story online, or become a recurring donor.

This summary presented in this article is not a substitute for, nor does it constitute, legal counsel. Only an attorney can provide actionable counsel for the establishment of a non-profit enterprise or entity in good standing with the Internal Revenue Service of the United States.

Tags: Nonprofit

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