How to Start a Non-Profit Company
If you have a great idea for starting a non-profit company or charitable organization, you are on your way to doing some great work. Keep in mind, however, that the process is quite complex. Here are some steps to get you started, along with some important points to consider.
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Instructions
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Do your homework. Before you endeavor to start a non-profit company, you should do some basic research. Make sure there is an unmet need for the services your non-profit company will provide. Then research state-specific information for the state of California. Check out the Center for Nonprofit Management and the California Non-profit Corporation Handbook to get started.
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Develop a mission and vision for your nonprofit company.
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Create a business plan. A non-profit company is a business just like a for-profit business is. You will need a solid business plan to ensure a successful start and to help you decide which type of non-profit company to start.
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Make sure that non-profit status will serve your company best. Non-profit companies do not pay income taxes and if they are 501(c)(3) organizations, they can also accept donations while providing donors with a tax deductible receipt; however, these two reasons should not be the rationale for opening as a non-profit. For example, you lose the complete discretionary control you would retain as the owner of a for-profit company. You also have to obtain most of your funding from the government or public sources. Working with a certified accountant and a corporate law attorney can help you decide.
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File incorporation papers with the state when you start your non-profit company and make sure they are up to code; then apply for non-profit status with the federal government. The paperwork here is complex, as are the processes. Again, it is wise to contact a corporate law attorney to avoid problems.
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Tips & Warnings
If your idea would fall under the umbrella of an existing non-profit company or would serve as a beneficial adjunct, consider seeking adoption of your project or creating a partnership.
