Starting a non-profit organization can bring you a great entrepreneurship experience. It creates a chance to help community and make difference. Yet, 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 aim?
- Whom am I trying to reach?
- 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 important 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 costs in the future. Some start-up expenses are:
- State application fee
- Fee for infrastructure required to serve people
- Potential permits and licenses
To clearly 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 important 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 an important place within the organization and it should be devoted to the organization. The board 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 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 registered agent
- Statement membership
- Get your Federal Employer Identification Number (EIN)
You can get your EIN number 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 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 broad public benefit of 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
- Fee of $400 or $840
- Finally register for Charitable Solicitation and Fundraising
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US Phone: +1 302 526 4800
Address: Newark, Delaware.