Establishing a nonprofit organization can be among the most rewarding and challenging experiences. If you have a cause dear to your heart that will serve your community, and if you have the resources and knowledge to support this venture, it might be one of the best decisions you ever make. Here are some tips from FAMCare to help you get started right.

Types of Nonprofits

Nonprofits can run the gamut from organizations that provide food to those who need it, such as the Southeast Texas Food Bank, to those that try to enrich the lives of people who might otherwise lack such opportunities. They may be inspired by religious, artistic, political, medical, economic, athletic, scholarly, environmental, or other causes.

Nonprofits make a big difference in the world. The 2019 report on nonprofit organizations in California stated that nonprofits generated 15% of the gross state product and that one in every 14 jobs in California was with a nonprofit company.

Research and Plan First

You might want to choose a cause that you care deeply about, and this is good. However, it should also meet a need that is currently not met or not fully met in your community. Once your cause is established, draft a mission statement and then a business plan.

Your business plan will detail exactly how the business will operate, how funds will be raised and dispersed, and will eventually include some bylaws. Setting up a nonprofit requires an investment of time, effort, and expertise, so it’s important to have knowledgeable advisors.

Decide How to Structure Your Organization

The decision on how to structure your company will need to be made early on. If you set the business up as a nonprofit corporation, you’ll find applying for grants and public funds a good bit less difficult, and this business plan also limits the liability of individuals within the business. Incorporation of a nonprofit is done at the state level, and each state may have different laws and guidelines for the process, so it’s important to get guidance for the area you will be working in.

Forming a nonprofit organization involves writing bylaws that cover the board of directors, frequency of board meetings, rules about conflicts of interest, and conflict resolution within the company. Most states require three or more directors, although a few permit only one. You will need to share information with your board and keep records of all communication to remain compliant. You can use this tool to create a PDF online​ to safely share information by encrypting it after conversion. Plus, you can combine files and edit content through remote interactions.

Becoming a nonprofit corporation allows you to file for federal tax-exempt status or 501C. Incorporating your nonprofit adds credibility, making people and other businesses more likely to support it.

Running Your Nonprofit

Once your nonprofit is established, you can turn your attention to its daily management and running of it. While your business plan and bylaws will address how the organization will be funded, this will be an ongoing focus for the life of the corporation. Securing funding for the organization and recruiting volunteers will be important indefinitely. You'll also want to focus on getting the word out and marketing your goods or services. It’s important to keep detailed records from the start as well as over the long haul. Since regulations vary by state, make sure your nonprofit files the required reports and stays compliant with local laws, as well as keeping all the required permits current.

Make a Difference Through Your Nonprofit

A nonprofit corporation can be quite enriching to a community, whether the cause is literacy, feeding the homeless, art education, establishing a nature preserve, or another worthy endeavor. Although setting up such an organization requires a good bit of work, it’s a great way to bring more attention and money to the cause you support, as well as see that the tax dollars paid are somewhat reduced. If you take your time to do the needed research and create meaningful mission statements and business plans, your nonprofit will no doubt be a success.

We appreciate our friend Sharon Wagner from Senior Friendly for sharing this helpful article.

FAMCare provides high quality and user-friendly case management software to make helping people easier for human service businesses and nonprofits. Check us out online to learn more.