How to Start a Non-Profit?

Thinking of entrepreneurs and multinational organizations, we talk about the humongous profits they have generated since their inception. Flip the coin, and we see a good number of them rendering service to the society by creating non-profits with specific purposes.

Establishing and running a non-profit business is highly rewarding and inspires you to make a meaningful difference in society. It’s a fitting way to give back to your community. In the process, you also stand a chance to receive public and private donations and enjoy tax-exempt status.

However, like any business, starting a non-profit organization demands strenuous effort with utmost dedication and thorough planning. You need todo some groundwork and follow the important steps to successfully combat any challenges that throw up.

Identify the mission

This is the most important step that clearly communicates your non-profit’s purpose. Whatever glaring issues you see in your community, you can put it across in words that inspire action. The mission can serve as a guide to develop and expand your non-profit business. The mission should attract funding sources and key players to join hands for the betterment of society.

Apply for a Non-Profit Status

This should be done at the earliest since it can take a couple of years to get the approval. It’s great to seek legal help from an advocate with a solid background. You should apply for the tax-exempt 501(c)(3) status. You can also apply for federaltax-exempt status only if you meet certain conditions. It’s important to keep all legal requirements in place during the early stages.

Develop Your Leadership Team

Your team of board of directors and volunteers is the driving force of your non-profit set up. This team is the one that supports fundraising and outreach efforts and also provides insights for development.Your board will be responsible for recruiting, board development, training and evaluation to ensure long-term success. Having independent members helps guard against misuse of charitable assets and prevents a conflict of interest.

Create a Website with an Online Donation Page

A website for your non-profit is a powerful marketing tool that can attract numerous visitors who think alike. It’s important to give specific information about your organization and future plans and developments.An online donation page can kick start your fundraising campaign immediately and proves to be effective in the long run.

Legally Incorporate Your Non-Profit to Begin Operations

This is crucial as incorporating your non-profit with a specific structure gives credibility to services rendered. Importantly, it limits the liability of your team members and board of directors. Your business can produce organizing documents and governance policies to the IRS.

Find Local Partners for Support

Identifying and tying up with local partners within your community can do wonders for the business and society. The local network builds your brand’s reputation and keeps the momentum going. They will particularly be important for outreaching activities and to unlock potential donors. These can include:

  • Local businesses
  • Other non-profit organizations
  • Municipal offices in the locality
  • Schools and colleges in the surroundings

Secure Initial Funding

Finding fundraisers and attracting grants can be a major challenge during the initial stages. Your team and the local network play a prominent role in helping your non-profit secure initial funding. It’s also important to educate your team about the grant writing process. Do thorough research and follow the steps of grant writing.

You have to identify grant opportunities and refine your goals and strategy before going ahead. Having a powerful case for support can be an added bonus to attract donors.

Keep Developing Your Brand

Having a brilliant idea to serve society is one thing. Getting people to talk about it and garner their interest is another. Switch gears and encourage your supporters to go all out while you take actions to go viral online. This has to be a continuous process and, it takes patience and creativity to see through.

Get Ready with Annual Reporting Requirements

Since your non-profit is exempt from tax, you have to file form 990 with the IRS. It’s open to public inspection and comprises of the programs & activities, the finances, the policies, the board of directors and other important staff members. You must organize the annual reporting requirements on the lines of your state’s legal requirements.

Plan for Growth

The hard work has paid off. You have successfully kick-started your non-profit venture. But don’t stop there. Plan for the future and make efforts to invest your time and money in your non-profit’s growth and expansion. Develop a blueprint of the plan with specific actions to incorporate to make the process smoother.

You can empower your non-profit with some state-of-the-art tools like:

  • Automated CRM system
  • Advanced digital donations tools
  • Robotic marketing systems
  • Tools for volunteer and member management

Adjust and adapt

Your non-profit’s strategic planning should encourage external professionals to pitch in their ideas and offer suggestions for growth. Down the line, a certain program may no longer serve your purpose. You have to welcome new perspectives and create new events to foster excitement among volunteers and the public. It’s all about adjusting and adapting to the situation and the changing demands.

The Most Common Mistakes Most Non-Profits Commit

Alright, we have gone through a detailed study of the important processes required to be followed in ensuring a successful non-profit venture. However, there are some common mistakes nearly all non-profits are susceptible to. It’s important to be aware of them and take measures to prevent them from haring your non-profit venture. These are:

Poor research and planning

Not planning enough is a sure-fire way to let your non-profit dreams go down the drain. This happens due to a lack of researching and without a clear evaluation of the challenges and sources of funding.

Lack of financial knowledge

Most founders have unrealistic expectations about funding and have no idea about how much it costs, including the source. Not setting up a sound financial system weakens the foundation and cannot sustain itself in the long run.

Assuming it’s easy to start a non-profit

This is a leading mistake most founders commit while planning to start a non-profit. Incorporating a non-profit and applying for exempt status with all the requirements is a lengthy and strenuous process. A logical approach, with unbound passion, is critical.

Not building an effective board

Your board members are the source of influencing and inspiring the public about your non-profit. An ineffective board spells doom for your venture as it fails to draw volunteers and donors; important to ensure success and growth of your non-profit organization.

Not building a strong rapport with donors

What’s the point of all the planning and execution with a strong board of directors if you don’t strike a good relationship with donors? Remember, fundraising is all about building and nurturing a healthy relationship with your donors. You have to stay in touch with them and show gratitude even after receiving funds.

By doing this, you will be able to build a network of donors who will be more than happy to make worthwhile contributions to your non-profit. Also, seek different donors and never stick to just one. You stand a greater chance of raising more funds when you have a network of donors to approach.

Breaking confidentiality

Maintaining your non-profit’s confidentiality is the essence of maintaining the reputation of the organization and of society. By breaking confidentiality, you clearly give a wrong impression to the public and, that can be detrimental to your organization’s success.

Not cultivating board diversity

Your initial board can include your friends and family members. However, creating vacancies only for other friends and relatives can limit expansion possibilities and creates a lack of awareness. Members from diverse backgrounds can bring in distinct skills and varied insights to ensure success and create better awareness in society.

A Final Word

Just like for-profits businesses, non-profit setups too face several challenges. Tasting success takes time and, the support you expected isn’t overwhelming initially. However, it’s important not to let discouragement take over your dreams and potential goals.

Take all the time required to organize your plan and keep a checklist of the measures critical for your non-profit. Do in-depth research, gather extensive knowledge about non-profits and keep an action plan ready for potential challenges that may arise.

Remember, you did not venture into non-profit because it’s easy. The only motto of any non-profit organization is to make the world and the communities that reside in a better place favourable to all.

Now that you have made the decision to start your own non-profit, educate yourself with the entire gamut of the process to initiate, develop and progress towards bigger goals. Be a continuous learner and always seek resources (online & elsewhere) to arm you with the latest insights and procedures. And, always seek insights from other non-profits, including professional advice from those who know the changing needs of society.