The First 7 Steps You Need To Take To Start Your Nonprofit Organization

Starting a nonprofit for the first time can feel intimidating, which is why we have come up with these essential steps that will guide you at the beginning of your journey:

1. Define Your Mission

Now that you have discovered your passion, the first thing you should do is turn that passion into a mission statement early on in the start-up phase. This is the purpose of your non-profit and the need it addresses.

2. Choose a name

The name of your nonprofit should be unique and true to your vision. Before you do anything else, check with your state's corporations office (usually the Secretary of State's office) to be sure the name is not already taken. Your corporate designator options are "Corporation," "Incorporated," and "Limited," or an abbreviation of any of those words.

3. Write a Business Plan

A business plan is essential if you pursue funding from donors or the government, and can also help you recruit volunteers and board members.

4. Set up a Board

The status of your board is also closely linked to the legal structure of the non-profit. While your board will likely grow and change over time, during the start-up phase it’s a good idea to start-out by selecting a board with individual members that serve a functional need. Select members who are interested in your mission, can dedicate time as well as useful and applicable expertise, have previous Board expertise, and have no conflict of interest with you or your cause. Some states require that you appoint directors before filing your articles of incorporation.

5. The Incorporation Process

Many charitable organizations choose to incorporate because this decision allows them to obtain certain tax and legal advantages, according to The Balance. After all, incorporation often eases the process of securing tax-exempt status. The incorporation process involves choosing a business name that is legally available in your state and filing for an Employer Identification Number (EIN). In addition, you will need to prepare articles of incorporation, create bylaws and appoint your board of directors

6. Obtain 501(c)(3) Tax-Exempt Status

You can obtain 501(c)(3) tax-exempt status by filing Form 1023-EZ (or Form 1023) with the Internal Revenue Service (IRS). The information you provide will allow the IRS to review your organization thoroughly. Subsequently, the government organization will decide to either approve or decline your application. The IRS may ask you for additional information in order to approve your nonprofit status.

7. Make Sure That You Remain Compliant

Once you receive 501(c)(3) status, it's important for you to ensure that you remain compliant, especially when it comes to IRS regulations. For instance, even though nonprofits are tax-exempt, most of them are required to file Form 990 with the IRS on an annual basis. This examination by the IRS helps ensure that nonprofits are operating in a proper manner. As compliance requirements may vary by state, it's important for you to stay up to date on the latest rules and regulations, and if you are unsure, consult with your own legal adviser.Developing a successful nonprofit requires hard work and dedication. By following the above steps to start a 501(c)(3), you can be well on your way to making your mark in your community.