If you have a dream to start a nonprofit organization for a cause that you’re passionate about, the process can be a bit overwhelming. In many ways. However, starting a nonprofit corporation is like starting any other corporation but with a few extra steps.
There are more than 1.5 million registered nonprofit organizations in the United States. In order to be successful, you must consider some specific factors when growing your organization fitting into the nonprofit sector. Here are a few tips to help you out.
Obviously, donations and fundraising will be the linchpin of any successful nonprofit organization. You will need to be able to engage people and acquire funds in order to stay afloat and make an impact on your community. All good nonprofits and organizations have ways to reach the masses and lean on them for support.
Employing a service that allows your organization to send out mass communications for community engagement will be key to your success. Peerly is a service that works by allowing your volunteers or agents to engage with thousands of people via SMS.
2. Complete and file “Articles Of Incorporation.”
After you’ve figured out how to raise money and keep your community engaged, you will need to start building your nonprofit corporation. You will have to file documents that are commonly called “articles of incorporation.” Requirements will differ with each state, but at minimum, you’ll need to provide your nonprofit’s name, registered agent, and incorporator signature.
Your name must be unique and will be accepted by your state to ensure that it doesn’t infringe on other registered organizations. A registered agent is a person who will accept official notices for your nonprofit. Finally, an incorporator will be the person who signs your formation document and submits it. Your state may also require you to list directors, business purposes, and more. If you plan to file for federal tax-exempt status, your articles will need to pass the IRS’s “organizational test,” as described in Publication 557.
You will also need to file your articles of incorporation with your state. Your articles of incorporation will also need to be accompanied by a filing fee. In most states, fees range from $20-$100.
3. Draft by-laws and hold official meetings.
By-laws are the rules that will govern your nonprofit company and are essentially the governance of your organization. Your by-laws will dictate things like how officials are elected within the organization and how assets will be handled. You also might need to seek the legal assistance of an attorney to help draft your by-laws. If you apply for federal tax exemptions, you’ll attach your bylaws to your IRS application. After your by-laws are in place, you will hold a first official meeting to adopt the bylaws for your nonprofit. You will also need to elect any directors and other officers needed to run your nonprofit.
4. Register as a charity.
More than likely, your nonprofit will involve fundraising and donations. If so, you may need to register as a charity. If required, registration typically must be done before your nonprofit organization accepts any donations. Some states don’t require charity registration, but it’s a requirement among most states in the US. Charity registration is usually taken care of by the same state agencies that help you register and set up your nonprofit. There will also be federal tax laws that you will need to be aware of when operating a charity. As these can be complicated, it is strongly suggested that you engage the services of a professional to aid you with an understanding of business tax compliance.
5. Take care of your nonprofit.
A successfully run nonprofit is one that is transparent and effective. By transparent we mean that all business is conducted above board. Ensure that your certification and registrations stay up to date and that your finances are well documented and tended to. In addition to annual tax filings, most states require annual or biennial reports where nonprofits update any changes in management or contact information. Staying on top of these things will help keep your nonprofit running smoothly and doing the most good for your community.
Nonprofits are the undercurrents of our communities and provide help and aid to people who need it the most. A successfully run nonprofit can be very time consuming but can be extremely rewarding.