Starting a Nonprofit Organization
You are passionate about a cause, you have many ideas about how to make change happen, and you are inspired to launch a nonprofit to achieve your goals. Where do you begin?
As is true for all start-ups, a nonprofit business takes planning, resources, and time. Although your goal may be charitable, like other businesses, in order to succeed, nonprofits must be well managed – strategically and financially, and in compliance with applicable laws. What steps can you take to help ensure that your new organization will successfully fulfill its mission?
Start with Research and Planning
What is your organizational mission? Are other organizations doing this work already? If you apply for federal tax exemption and seek tax-deductible donations, the IRS will review your mission statement for clarity of purpose.
How is the organization going to be funded from inception to ongoing operations? Is it designed to “live forever” or to achieve a single purpose and then retire? How will you achieve public or private support? Your business plan explains how these and other questions will be addressed.
Who will govern the organization and who will manage its day-to-day operations and activities? Where will the base of operations be? What state or local laws will apply to it?
Are you operating a homeless shelter, or health clinic? Is a license required to conduct the program and activities? Does your organization need to register with certain states to solicit contributions?
Build the Basics
Every nonprofit organization requires a board of directors. This requires you to recruit board members, define their roles, determine their duties and obligations, and educate them on board governance.
This includes filing a certificate of incorporation with the state in which you want to incorporate and approving bylaws, which set forth the organization’s governance procedures. Following this, you would file an application for federal tax-exempt status with the IRS.
Create an organizational chart as a planning tool for hiring staff and running the day-to-day activities of the business.
Staying on Target
Because of the unique operational needs of nonprofits, seek professionals who have experience assisting nonprofits with their business requirements. These may include accountants, attorneys, and fundraising consultants.
Can Perlman & Perlman Help Me?
Yes! Perlman & Perlman has helped hundreds of nonprofit organizations incorporate and obtain federal tax-exemption. Our clients include community-based organizations, nonprofits operating national and international programs, corporate or family foundations, churches and other religious institutions, and “friends of” organizations that support international charities.