How to Start a Non-profit Organization

Do you find yourself motivated to back a cause but unsure of how to start a non-profit organization?

Well, START.ac is the right place to start! At START.ac you can find mentors and an engaging community to support and help develop your plans to start a non-profit organization. While there are many roads that can lead you to a successful non-profit, what follows is a helpful guide that can help to think through how to start a non-profit organization along with resources to take your plans to the next level.

If at any time you would like to learn more about START.ac click here. You can also explore our current projects.

Q: How do I start a nonprofit organization?

A: Before forming a nonprofit, your first step is to find out if organizations (nonprofit, for-profit, or government) are already doing the same or similar work in your community. It will be harder to get support if you are just duplicating existing services, versus improving or adding to them. Resources that can help you identify nonprofits in your area include:

• GuideStar
• 211 call centers, available in many areas; some also provide searchable databases of local human/social service organization.
• Search the internet for your area, plus keywords describing your mission, e.g., "women children shelter Atlanta"

After you determine that the work you will do will meet a real need in the community, you must spend some time developing these essential ingredients of a successful nonprofit:

1.  A vital mission
2. High-quality, responsive, and unduplicated programs and services
3. Reliable and diverse revenue streams
4. Clear lines of accountability
5. Adequate facilities

Starting a nonprofit generally also requires these steps to formalize your organization:

• File articles of incorporation with the Secretary of State or other appropriate state agency.
• Apply for exempt status with the Internal Revenue Service (IRS). Please note that it can take 3-12 months for the IRS to return its decision.
• Register with the state(s) where you plan to do fundraising activities.

Please note that laws and procedures can vary in each state. Use the Nonprofit Startup Resources by State map to view state-by-state nonprofit startup resources such as startup guides, nonprofit associations, legal support organizations, technical assistance, state filing agencies and more!

Alternatives to starting your own nonprofit:

• Volunteer or work for an existing nonprofit that shares your mission.
• Find a nonprofit with a similar mission that will act as your fiscal sponsor. This arrangement may help you become eligible for more funding opportunities without obtaining your own exempt status
• Investigate the concept of social enterprise, which may take the form of a low-profit limited liability (L3C) company or a B-corporation.

Learn more now about starting a nonprofit with our free recorded webinars or tutorials:

• Establishing a Nonprofit Organization
• Webinar Series for Nonprofit Startup Organizations
• Before You Seek a Grant: A Checklist for New Nonprofits

Selected resources below may also be helpful.

Books & Articles

Check title availability at our libraries and Cooperating Collections or your local libraries.

• How to Form a Nonprofit Corporation
• The Nonprofit Handbook: Everything You Need to Know to Start and Run Your Nonprofit Organization
• Starting and Managing a Nonprofit Organization: A Legal Guide

Web Sites

• Compliance Guide for 501(c)(3) Public Charities | IRS [PDF] Covers recordkeeping; activities that may jeopardize a charity's exempt status; required filings; governance considerations; changes to be reported to the IRS; required public disclosures; and resources for public charities.
•  Fees to Apply for Exempt Status | IRS Updated annually, these fees must be paid when applying to IRS for 501(c)(3) or other exempt status.
• Foundation Classification | IRS [video] 18-minute animated film that explains foundation/public charity classification and public support. Also covers how to calculate public support test. Users can view outline, notes, and advance slides.
• How to Start a Nonprofit | Minnesota Council of Nonprofits Provides alternatives to starting a nonprofit, stages of development, first steps, checklists, and other resources.
• Life Cycle of a Public Charity | IRS The IRS provides information, explanations, guides, forms and publications on all of these subjects – they are available through this IRS Web site. The illustration below provides an easy-to-use way of linking to the documents most charities will need as they proceed though the phases of their “life cycle.”
• Life Cycle of an Exempt Organization | IRS Provides information about points of intersection between organizations and the IRS. Includes explanatory information and links to forms that an organization may need to file with the IRS. The materials cover five stages in an organization's life cycle.
• National Association of State Charity Officials (NASCO) Links to state offices that regulate charitable organizations and charitable solicitations.
• Starting a Non-Profit Corporation Checklist | FindLaw Steps to take before you open for business. Each step has a link for more information.
• Starting a Nonprofit Organization | Free Management Library Provides comprehensive advice and materials for anyone who is considering starting a nonprofit organization.
• Starting an NPO — Five tips and a warning | idealist.org The editor of the Nonprofit FAQ offers 'Five Tips and a Warning’ about incorporating a new nonprofit.
• State Association Directory | National Council of Nonprofits State nonprofit associations often provide checklists and local guidance for would-be nonprofits. These membership groups might also provide classes, technical assistance, or referrals to consultants.
• State Filings for Nonprofits | USA.gov Find information in your state about incorporating your nonprofit organization and charitable activities.
• The Public Support Test for 501(c)(3) Organizations | Sharinglaw.net Attorney Lisa Nachmias Davis provides step-by-step instructions for those wishing to calculate the test. Part of her guide, “Ten Steps for Starting a Nonprofit, Tax-Exempt Corporation in Connecticut”.

We hope you've found How to Start a Non-profit Organization helpful. Please explore the START.ac website for exciting opportunities to finance your new start up and ways to get involved in our growing community. Good luck!

Accessed April 8, 2012 @  http://grantspace.org/Tools/Knowledge-Base/Nonprofit-Management/Establishment/Starting-a-nonprofit