In this comprehensive guide, we'll walk you through the steps you need to take to start a nonprofit in the United States, including everything from researching your idea to filing the paperwork necessary to become a recognized 501c3 organization.
Step 1: Research the Idea for your Nonprofit Organization
The first step in starting a nonprofit is to research your idea. Before you invest time and money into starting an organization, you need to be sure that your idea is viable and that there's a need for the services or programs you plan to offer. You should start by researching other nonprofits that are similar to what you're proposing. Look at their missions, programs, and funding sources, and assess whether there's room in the market for another organization. You should also consider whether your idea is financially feasible, and if there are other ways to address the problem that you're proposing to solve.
Step 2: Create a Nonprofit Business Plan
Once you've researched your idea and determined that it's viable, it's time to start putting together a business plan. A business plan will help you organize your thoughts and outline your goals, mission, and objectives. It will also help you determine the resources you'll need to get started, including funding, personnel, and infrastructure.
Step 3: Choose a Name and File for Incorporation
The next step in starting a nonprofit is to choose a name and file for incorporation. You should choose a name that reflects your mission and is easy to remember. You'll also need to check that the name you've chosen isn't already in use by another organization. Once you've chosen a name, you'll need to file for incorporation in the state where your nonprofit will be based. You'll typically need to file articles of incorporation and pay a fee to get started.
Step 4: Establish your Nonprofit’s Brand Identity
Establishing your nonprofit's brand identity is crucial to effectively communicating your mission and attracting supporters. Your brand identity should reflect the values and goals of your organization, and be consistent across all of your communications and marketing materials. This includes your logo, website, social media profiles, community management platform, donor management platform, and any other materials/systems you use to represent your organization.
Step 5: Obtain Charity Tax-Exempt Status
Once you've incorporated your nonprofit and established your name, mission, and brand identity, you'll need to apply for tax-exempt status from the Internal Revenue Service (IRS). To do this, you'll need to complete an application (Form 1023 for most organizations) and provide the IRS with information about your organization and its activities.
Step 6: Create Bylaws for your Nonprofit’s Charitable Activities
Once you've been approved for tax-exempt status, you'll need to create bylaws for your nonprofit. Bylaws are a set of rules that outline how your organization will be run and governed. They should include details about your mission, membership, and leadership structure, as well as information about how decisions will be made and how disputes will be resolved.
Step 7: Obtain Any Necessary Licenses and Permits
Depending on the nature of your organization, you may need to obtain additional licenses and permits. For example, if you plan to serve food or offer childcare services, you may need to obtain a food service or childcare license.
Step 8: Set Up Accounting and Financial Systems
Once you've completed all of the necessary steps, it's time to set up your accounting and financial systems. This includes setting up a system for tracking income and expenses, as well as setting up a system for making and recording donations. You'll also need to set up a system for complying with any financial reporting requirements, such as filing annual reports and tax returns.
Step 9: Source a Donor/Community Management Software
Now that you have your systems and bylaws in place for being able to receive and track donations, and perform your charitable activities, it is time to build a tech stack that will work for your nonprofit organization. Nonprofit software can be a very great tool for scaling your impact, however, it is very important to do your research before signing up for one. In general, the landscape for nonprofit technology is changing quickly, and nonprofits need to adapt to the frequent changes and ensure they are building their program on systems built to scale.
Step 10: Get Started!
You did it! You have established your nonprofit and now you can start performing your charitable activities and driving the impact you desire to create!
It will be important to always keep focused on your mission, but also be responsive to new software tools or systems that can escalate your impact. Revisiting your goals yearly, and ensuring that you are always ahead of the curve can be challenging, but it will certainly pay dividends as you continue to grow and scale your vision!
Starting a nonprofit can be a daunting task, but remember you can break it down into steps, and build it over time. Our team has people available to help point you in the right direction. If you have any questions about starting a nonprofit, or scaling with the right technology, please feel free to reach out to us at [email protected]!