How to Start a Non-Profit Organization

Effective non-profits develop and implement long-term fundraising strategies.

Non-profit organizations (NPOs) in the U.S. provide key services in many areas, from health care to education. According to the Urban Institute, more than 1.5 million non-profits were registered with the Internal Revenue Service (IRS) in 2008, an increase of 30.7 percent from 1998. Starting a non-profit involves substantial planning regarding your organization's mission, structure, financial strategy and human resources.

Instructions

1. Determine whether your intended activities will be best served by creating a new non-profit organization, and that these activities serve a charitable purpose. Search for surrounding non-profits or organizations in your area with a similar mission that you might partner with instead of creating a new non-profit.

2. Identify the appropriate type of non-profit organization you seek to create. While the most common type of non-profit is the 501c3 public charity, other types of non-profits the Internal Revenue Service recognizes include private foundations and labor unions.

3. Establish the vision of change for your non-profit. Determine what your core service area will be, how your organization will actualize that vision of change and what specific commitments your non-profit will make in achieving that vision. For example, a non-profit might decide to improve educational opportunity by providing college counseling to 100 teens per year in a specific disadvantaged community.

4. Develop a mission statement that encompasses your organization's vision of change and commitments. An effective mission statement conveys your non-profit's guiding statement of purpose and encompasses its core values in a few sentences.

5. Assess people and potential partner organizations in your area that could help your non-profit achieve its mission. Identify potential candidates to join your board of directors or to serve as funders for your non-profit. Also, identify relationships that will be useful in a support or advisory function. For instance, a tutoring non-profit might seek to partner with a local university and enroll university students to serve as volunteer tutors.

6. Select and invite individuals to serve on your board of directors. Provide these individuals with clear expectations as to their financial and time contributions. When inviting board members, keep in mind specific traits that your non-profit seeks among your board members, such as financial resources or non-profit management experience. Also, do not be discouraged if many candidates turn you down; many starting non-profits have to ask far more candidates to join their board than those who finally accept the invitation.

7. Establish bylaws for the operation of your board of directors and set a meeting schedule. As the Foundation Center points out, it can also be useful to set up some board policies such as a conflict of interest policy, which directs those involved with your non-profit to disclose any way they might benefit from your organization's operations.

8. Begin building a leadership team for your non-profit. Consider essential skill sets for your organization's leadership. For instance, a non-profit that works in early childhood development might hire a developmental psychologist.

9. Develop a business plan for your non-profit. Identify potential sources of funding, including government grants, support from foundations and individual donations.

10. Envision and develop specific programs that will achieve your mission statement. For instance, a non-profit that seeks to tutor local teens could plan a series of after-school tutoring programs held at a local high school's library.

11. File for incorporation under 501c3 tax-exempt status with the charity office in your state. If you know an attorney willing to help your non-profit, contact him to take the initial steps toward non-profit status. Also, consider contacting a local organization knowledgeable about the requirements for incorporating with 501c3 status; for instance, some law schools host clinics that assist non-profits with incorporation.

References

• Huffington Post: How to Start a Non-Profit
• The Bridgespan Group: Business Planning for Nonprofits
• Foundation Center: Establishing a Nonprofit Organization
• Idealist.org: Nuts and Bolts of Starting a Nonprofit Organization in the U.S.
• Nonprofit Law Blog: 10 Keys to Starting a Nonprofit - Public Charity
• Urban Institute: The Nonprofit Sector in Brief

Resources

• Yale Law School: Nonprofit Organizations Clinic
• National Association of State Charity Officials: U.S. Charity Offices
• Free Management Library: All About Boards of Directors (For-Profit and Non-Profit); Carter McNamara
• Urban Institute National Center for Charitable Statistics: Nonprofit Organizations - Overview