If you are planning to start a nonprofit, you should first know that it’s not different from starting any other organization. It requires planning, a roadmap, patience, and dedication. Merely having an interest in an area won’t do. You need a structured process to start a nonprofit.
Like starting any organization, the process can seem overwhelming at times. This is especially true if you come with no experience in nonprofits or entrepreneurship in general. However, with these 10 steps to starting a nonprofit, you will be able to start one that is both functional and successful.
The 10 steps of starting a nonprofit
1. Know your reasons
Let’s start with why you want to start a nonprofit. What’s the area of your startup’s focus? Is it something that you have always been interested in? Was there an event or incident that encouraged you to start one? Have you studied about it or volunteered before with any nonprofit?
Once you know your area of focus, it’s important to learn more about it. You should know how many nonprofits work in that area in your region. Even with the best of intentions, it will be difficult to start a nonprofit in a crowded field with established names.
2. Build a foundation
Now it’s time to create all the units upon which your nonprofit will be built. Start by choosing a name that’s different, inspiring, and importantly, connects you to the category. Don’t make it long or complex. See if the domain name is available before you finalize the name.
Secondly, identify the problem and state your solution in the form of a mission statement. This will also help you specify the target audience that you want to help and how you want to make a difference in their lives. Finally, you should identify the values your nonprofit will live by.
3. Write a business plan
Creating a robust business plan will be of immense help to the long-term stability and success of your nonprofit. A business plan will reveal the estimated revenue and operational expenses of your nonprofit. Once you have it written down, you can insert it into the federal Form 1023 to avail of the tax-exempt status.
You need to conduct thorough market research before you write the business plan. This will help you build a viable long-term plan for your nonprofit. Your plan should contain:
- An executive summary of what your nonprofit hopes to achieve
- Market analysis of existing organizations
- Products, services, and programs of your nonprofit
- A marketing plan with details of how you will communicate your mission
- An operational plan that states how you will run the day-to-day operations
- A budget that shows the potential revenue and expenses
4. Build a leadership team
To a great extent, your leadership team will determine the success or failure of your nonprofit. While this is true for all organizations, for nonprofits, you also need individuals who will believe in your mission. There are three key groups of people that you need to help your nonprofit thrive.
In the first group, you need board members with expertise in either your chosen field or those with experience in running and mentoring nonprofits. Secondly, you need to hire different members of your staff, which might include a communications manager, events coordinator, fundraising manager, membership manager, etc. In the last group, you need volunteers who will help run your operations.
5. Focus on branding
Your belief in your mission is irrelevant if you can’t communicate it to the external audience. As a nonprofit, you will need to convince several groups of people from donors to media to government authorities. For that, you need a brand identity that stands above the clutter.
Your name, logo, and tagline will together form your brand identity. They should also resonate with your core target group. This needs to be professionally created. For consistency, you can come out with a brand guidelines manual that stipulates how your brand identity should be used on various collateral.
6. Legally incorporate the nonprofit
To legally incorporate your nonprofit, the first thing you need is a business name. It should be legally available in your state. The next step is applying for an EIN or Employer Identification Number. Along with that, you will have to appoint a board of directors, create bylaws, and prepare articles of incorporation.
Now you can apply for the 501(c)(3) tax-exempt status through Form 1023 or Form 1023-EZ. IRS will use the information you provide to thoroughly review your organization.
7. Secure funding
The most demanding aspect of starting a nonprofit is finalizing a funding model. Without a strong fundraising program, it’s unlikely that your nonprofit will be able to sustain its operations. The most popular form of funding is through grants. These are highly competitive and you would have to apply for a grant with a compelling proposal that outlines why you need it and how you will use it.
You can also apply for crowdfunding or startup accelerators that focus on nonprofits. These are viable opportunities for someone without the necessary experience but an overlooked cause and an inspiring mission.
8. Start your operations
After legally incorporating your business and deciding on your brand identity, it’s time to start your operations. The first thing you need is to build a website. It should outline what you hope to achieve, the need for that, the resources you have, and how people can contribute or participate.
Next, you have to begin actively networking to get the word out and build your credibility. By now you should also have found a space for your office. You don’t have to spend much on office infrastructure. But you have to invest smartly in your digital presence. This is also the time to put a structure to your operations and allocate responsibilities to your team members.
9. Ensure that you stay compliant
Once you secure funding and start your operations, it’s important to maintain the credibility of your organization. You should file the 990 form with the IRS annually. Your startup also has to abide by all the bylaws and diligently manage and monitor board meeting schedules with minutes.
It’s also important to pay taxes on any unrelated activity exceeding $1000. Your team should also ensure that all applicable licenses are kept up to date.
10. Use social media for marketing
If people perceive your startup positively, it will be easier for you to win grants and find donors. This requires a constant focus on marketing, but the good news is that you don’t have to spend unnecessarily on traditional media platforms. Social media can help you meet all your marketing objectives.
Be active on Facebook, Instagram, and LinkedIn. You can also choose other platforms but restrict your attention to three or four. Regularly post about your work and educate your followers on the problem that you’re trying to solve. Be realistic and share your story to build traction for your nonprofit. Importantly, be transparent and engage with your followers.
In short
These steps should give you the blueprint to start a nonprofit that’s successful and makes a profound difference in people’s lives.