Starting a non-profit organization can bring you excellent entrepreneurship experience. It creates a chance to help the community and make a difference. Starting a non-profit organization is similar to starting other types of businesses with profit. There are some steps you should consider to be successful. Here, you can find some of those steps:
Step 1: Be organized and do your homework
If you are planning to start a non-profit organization, you should ask yourself these questions:
What is my goal?
Whom am I trying to reach this goal?
Do I have enough sources to reach this aim?
Do I have enough time?
When you start putting your ideas to documents, make sure you spend enough time on a business plan. This step is crucial because you will be asked to include Form-1023 Tax Exempt Application among your documents. You may also need it for some situations such as fundraising.
The most important parts of your business plan are the cost of your organization and potential operating expenses in the future. Some start-up expenses are:
– State application fee
– Fee for infrastructure required to serve people
– Possible permits and licenses
To know what you need, you can talk to state authorities or legal consultants.
Step 2: Start Your Non-Profit Organization and Adjust Its Management
Just like other organizations, starting a non-profit organization also requires some paperwork. There can be even more paperwork because the organization can be subject to 501(c)(3) tax-exempt. This is the first thing you should focus on. You should also be careful about some points to make the process faster.
Choose a creative and relevant name: This step is crucial because it will represent your brand. You should check if the name you chose is compatible with the rules.
Create a Management Board: This board has a prominent place within the organization, and it should be devoted to the organization. The committee will be legally responsible for the mission and the vision of the organization. Board requirements may depend on the state.
Prepare a draft of your by-law with your Management Board. It will serve as a hand guide. You should also have an Articles of Incorporation, and you will need it for the tax-exempt application.
Choose your legal structure:
– Non-Profit Corporation
– Non-Profit LLC
– Unincorporated Non-Profit Association
This step will be done with the state in which your non-profit organization is headquartered. Some information you will need:
– Purpose of organization
– Name of Initial directors
– Name of incorporator
– Name and address of the registered agent
– Statement membership
– Get your Federal Employer Identification Number (EIN)
You can get your EIN by filling out IRS SS-4 Form. You will need your EIN for:
– All federal tax returns and receipts
– Opening a bank account
– Hiring employees
– Get your 1023 Federal Tax-Exemption to get 501(c)3 Status
Then you should check if your non-profit organization is eligible for any tax exemptions. Some information you may need while applying for 501(c)(3):
– Certified copy of the certificate of formation from your state
– Copy of bylaws
– Details pro forma financial statements, including revenue and expense statement for current and three preceding fiscal years
– Proposed budgets for the next two fiscal years; including a list of anticipated financial support
– Narrative description of past, present, and future planned activities with an emphasis on the broad public benefit of the organization’s activities
– Names and addresses of director and officers
– Annual accounting period (what is your fiscal year)
– Statement as to whether the org is claiming status as a private foundation or public charity
– Finally, register for Charitable Solicitation and Fundraising
You can choose one of our services to start your business in the US, and you can always contact us for further information or questions.
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