So You Want to Start a Nonprofit Organization

In Start-ups by Geoff Burns

Everyday people are finding new causes to support. These causes range from small local concerns to global or international issues. Occasionally, a person or group of people decide they want to start their own non-profit organization. If this sounds like you, then consider this first.

You don’t own your non-profit organization. You may be responsible for it, but you don’t own it. By definition, a non-profit organization is publicly owned. You also measure the success of the organization by whether or not you are meeting the needs of the population you serve. Non-profit is sometimes a misnomer. Keeping balanced books is just as important for non-profit organizations as it is for a business.

Many non-profits get special tax status, such as 501(c)3 organizations in the USA. In the United States, the IRS will classify an organization as charitable so long as it fulfills public needs in areas such as science, social services, arts, religious, health, education, civics, environmental, human services, etc. Remember, not all purposes are acceptable for charitable status. Many lobbying organizations, while they may represent and seek to advance social needs, cannot be classified as charitable.

While you can create an informal non-profit, most likely you are looking to incorporate as a new organization. After you file with the appropriate agency, you then need to decide if you are going to seek tax-exempt status. During this process, you will also consider becoming a tax deductible entity.  This will allow donors to your organization to receive a deduction on their tax liability. Be aware that the IRS can take up to 18 months to review and decide on your organizations charitable status.

In order to operate your organization efficiently, you need to remember three key components to non-profit organizations; Board, Administration, and Programming. The board consists of the legally responsible individuals who make decisions about the organization including mission, values, policies, etc. The administration is responsible for carrying out those decisions to the community the organization serves. Programs are how the administration effectively meets the needs of the community.

Setting up your organization properly to begin with will save you many headaches in the future. Before you incorporate your new organization, you should know who is going to be on the board of directors, who are the officers including the chair, and who will be the Executive Director. Typically, the executive director is not a board member. You should also know how you are going to administer your operations, handle staffing and volunteers. It is a good idea to start looking at a potential donor base by cultivating relationships within your community.

If after all of this you still think you are ready to begin the process of starting a new non-profit organization, take a look at the following links. Answer the questions honestly and evaluate your situation. If you decide to go forward, be prepared to seek help in getting started. Burns & Associates will be happy to assist you along the way.

Greenlights Start up Assesment

Non Profit Center Questionaire