So you’ve decided to start a nonprofit. Kudos! It’s always a great feeling to be able to help a good cause. But where to start?
Once you’ve decided on the charity you want to help, do your research. Do you want to start an organization on your own, or join one already in progress? If you’ve never working in a nonprofit before, I highly recommend that you join a cause similar to the one you want to start. If you’re interested in healthcare, for example, you might look at the Komen foundation or the Red Cross. Watch and learn the ropes before jumping in on your own. If that’s not an option, then read everything you can on nonprofits – the different statuses that are awarded and what forms you’ll need to fill out.
So now you’ve taken some time to get acquainted with the nonprofit world. You have your forms and, if you’re lucky, a good group of people who want to help. So now it’s time to start filling out the forms and raising the money required by the IRS to file your paperwork and become official.
Do you have a name for your group? Has it been used before for anything else? Once the IRS has your name on file, it’s permanent. Any changes made once you’ve filed will require you to jump through all the hoops again, so pick something you’re happy with. Make sure there are no negative connotations, cults, or any other group that might make people wonder just what (or who) you’re raising money for. Make a list of names and Google all of them, marking off the ones that are questionable.
Every nonprofit is required to have bylaws by which they operate. You can find a copy online and add the name, the address, and any pertinent dates or other information as you see fit. I do not recommend dramatically changing the format or the information, since the IRS is accustomed to these templates and you might experience delays or have to add all of the deleted information back in later.
This is by far the most time-consuming form to fill out and you might find yourself repeating answers as you go. That’s okay. Just be sure to fill out every question as well as you can. If the IRS has a question, they will assign an agent to assist you.
Articles of Incorporation and Other Forms
Again, these can be found online. Most states have a simple incorporation form you fill out for a small fee. The Conflict of Interest form is also very brief, but is required by the IRS to complete your paperwork. The Donor Contribution form is used to show transparency in the organization, should anyone want to review your books.
Speaking of books, you’ll probably want to have some pre-nonprofit status fundraisers to help pay for filing your paperwork with the IRS. That’s fine to do, but be sure to keep track of the money coming in, and make sure everyone knows that you are raising money to file. Misrepresenting yourself as a nonprofit before you have the determination letter can be disastrous. After you have your EIN, or nonprofit status, be sure to include it with any donation request letter, or receipt for donation. This way your supporters can get a tax break while helping with your cause.
Keep through books in a secure location (meeting minutes, bank statements, etc.) in the event someone wants to come have a look. Nonprofits are semi-public in that if a supporter has a question about your finances, you have to disclose that information if it’s deemed appropriate (the IRS has guidelines around that issue, so be sure to read them). Not responding to the request could result in a conversation with the IRS, if the supporter’s request is legitimate.
So by now you have an idea of what’s involved in starting a nonprofit organization. While it’s true that it doesn’t happen overnight, the rewards are great. Take your time and get everything organized before you start and you’ll be in a better position for the IRS to grant your request. Happy fundraising!
About this post’s author:
Rebecca Haack is a seasoned editor with experience in mechanical engineering, services (university publications), advertising, and natural health. She I believe that a curious mind makes a well-rounded person and was the senior editor for two books in the natural health field that are currently available on Amazon.com.
Though she currently works in the Healthcare industry she is also the co-founder of a nonprofit organization in Alabama. Learn more or connect with her on LinkedIn.