So, you want to start a nonprofit?: Things to consider

You want to start a nonprofit, but something is missing.  

You are a passionate member of the community with a desire (the why), a well thought out mission (the what), and an intended demographic or population whose needs are not yet being met in your area (the who.)  

But what about how?  

How do you translate that passion and hard work into a well-functioning 501(c)(3)? The answer is simpler than the solution: hard work and comprehensive planning. Do not let that scare you! The fact that you are reading this tells me that you are halfway there. The list we’ve compiled below is meant to specifically help you and your blossoming nonprofit to the finish line. So, let’s get started! 

Here are some common, often overlooked areas to consider for your how

1. Your Board 

One of the first tasks to undertake when you start your nonprofit is the selection of the initial Board of Directors. Here are some things you’ll want to take into account when making your selection: 

  • Knowledge base, skills, and abilities. Make sure all of your board members are bringing their own unique touch to the table.  
  • Partiality. This essentially means that legally you must ensure that the majority of the board does not include family members or anyone who might have any financial interest in the organization. A good rule of thumb is to pull in like-minded individuals who are going to do what is best for the organization, not themselves. Especially since the board is not compensated.  

2. Programs 

You probably have these already and have been implementing them successfully within your community. Now is the time to finetune your innovative and distinctive services. Plan your programing out and make projections for goals. Discover ways to collaborate with other nonprofits! Expand on the unique services you are already offering.  

3. Volunteers 

You can’t be expected to do this all alone. For newly formed nonprofits, volunteers are essential to success. This will require some effort on your end, but don’t worry. We have a checklist of some policies to consider while forming a volunteer management program that best works for you: 

  • You’ll want to have a standard interviewing and screening process for placing volunteers 
  • Put together an orientation or training series so they can best represent your nonprofit 
  • Have a supervising and evaluating system to provide feedback on the work they are providing 
  • Retaining and recognizing volunteers is very important. They are providing you with their time and effort: also remember to recognize that! 
  • Advocating and educating the staff on the important roles of volunteers is key: remind your board members how vital your volunteers are to your organization! 

4. Budget 

It’s important to create a realistic budget and know where you will get funding. Consider what equipment, supplies, and human resources will be necessary, and how much it will cost to obtain them. Think about the many different ways that you plan to generate income to cover your organization’s operating costs. It’s important to be diverse in income sources. 

5. Foundation Classification  

Now that you have all of that sorted, you have the important question of whether or not you are legally a foundation or a public charity. Here a few tips to help decipher: 

While both private foundations and public charities are 501(c)(3) organizations, there is quite a substantial difference between the two types of entities. Because there are different rules that apply to public charities and private foundations, it is important to be able to identify whether an organization is a public charity or a private foundation. When you start a charity, it’s crucial to understand the difference. 

Unlike private foundations, which normally receive substantially all of their contributions from relatively few sources, such as a wealthy individual or corporation, and often rely on investment earnings as their source of ongoing support, a public charity, on the other hand, is “publicly supported.” Specifically, an organization may qualify as a “publicly supported” organization because it does one or more of the following: 

  • Is supported substantially by financial support from government agencies and/or the general public. 
  • Is supported substantially by contributions and gross receipts from its exempt activities and does not receive more than one-third of its support from investment income. 

6. Legal Filings 

And now it’s time to finish the process! To legally form a charity, you will need to prepare and submit a number of filings to various government agencies. These include filings to: 

  • Establish the nonprofit corporation with your state. 
  • Obtain 501(c)(3) tax exemption with the IRS. 
  • Obtain exemption from corporate income, franchise, sales and/or other taxes in your state. 
  • Become registered and authorized to solicit contributions in each state where you will solicit funding. 

BryteBridge wishes you luck on your 501(c)(3) ventures and is always available in case you need a helping hand.  

Tanner Mowery

Written by Tanner Mowery