Starting a non-profit organization can be a daunting task. There is a lot of paperwork and legal work that needs to be done to make sure your non-profit is legally recognized.
In this article, we will walk you through every step of the process, from filing for non-profit status to set up your bank account. We’ll also discuss some things you need to think about when creating your non-profit, such as its mission statement and bylaws.
So whether you’re just starting or running a non-profit for years, this article will provide you with everything you need to know!
Table of Contents
What is a non-profit organization?
A non-profit organization (NPO) is an organization that does not distribute its surplus funds to shareholders or owners but uses them instead to pursue its goals.
Difference b/t Non-profit organizations and for-profit corporations:
Non-profit organizations are distinct from for-profit corporations in that they cannot distribute their surplus funds to owners or shareholders. This distinguishes them from the corporate form, which is allowed. Shareholders of a for-profit corporation can receive a financial return on their investment in dividends. In contrast, members of a non-profit organization do not have ownership rights in the company.
They can generate income:
Non-profit organizations are allowed to generate income, but this income must be used exclusively for charitable purposes. Charitable purposes generally include relieving poverty, advancing education, promoting religion, and other humanitarian activities.
How to start a non-profit organization?
There are various ways to go about starting a non-profit organization. The most common way is to form a corporation. This can be done by filing articles of incorporation with your state’s secretary of state office.
They first need to apply for 501(c)(03) status with the IRS. This designation allows your non-profit to operate as a tax-exempt organization. The process can be lengthy and complicated, but many resources are available to help you through it.
The IRS website has a lot of information on how to apply for 501(c)(03) status, and many books and articles can help you navigate the process.
Once you’ve received your 501(c)(03) designation, you’ll need to set up a bank account for your non-profit. This is important because it will allow you to accept donations and keep track of your expenses.
When setting up your account, be sure to use a business name that includes “non-profit” or “charitable.” This will let people know that your organization is tax-exempt and that their donations are tax-deductible.
Now that you’ve got your non-profit status and bank account set up, it’s time to start thinking about your mission statement. This short sentence or paragraph describes what your non-profit does and why it exists.
It’s important to be clear and concise when writing your mission statement, as it will be used to help people understand what you do and how they can support your work.
After you’ve created your mission statement, you’ll need to write your bylaws. These are the rules that govern how your non-profit will operate.
Bylaws can be long and complicated, but many resources are available to help you create them. Once you’ve got your bylaws in place, you’ll be ready to start operating your non-profit!
Seek help in creating bylaws:
An attorney who specializes in non-profit law can help you create your bylaws. This is an important step, as your bylaws will govern how your organization operates.
You can also find templates and examples of bylaws online. Once you’ve created your bylaws, be sure to have them reviewed by an attorney to make sure they comply with the law.
The next step is to start fundraising. Non-profit organizations rely on donations to support their work. There are many ways to fundraise, so be creative and think about what will work best for your organization.
You can hold events, solicit donations from businesses or individuals, or apply for grants. Whatever method you choose, be sure to keep track of your expenses to stay within your budget.
Starting a non-profit organization is a big undertaking, but it can be very rewarding. Now that you know how to start a non-profit organization, it’s time to get started! Follow the steps outlined above, and you’ll be on your way to making a difference in your community.