What better way to give back to your community than by starting a nonprofit organization? Developing and rocketing a nonprofit typically takes years of work and a great deal of commitment and determination, but understanding the steps involved in such a rewarding process should smooth the way.

You may have developed a passion for a specific cause, or perhaps you wish to help a certain community long-term. Whatever your inspiration centers on, congratulations on contributing to the betterment of this world! Read on for a step-by-step guide on how to start your nonprofit.

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To break the process down for you, here are the ten most essential steps to follow:

10 Main Steps for Starting a Nonprofit

Your NPO has to be built on a solid foundation. To run a strong organization, you’ll need to develop a clear vision. Here’s what you’ll need to do:

When naming your nonprofit, you need to focus on its purpose. The name should clearly reflect your mission and actions. It should also show that you're an NPO, so consider using words like "Charity" or "Foundation" to highlight your nonprofit status. 

Remember that the name is the first impression that everyone will receive of your NPO, be they donors, stakeholders, etc., so it should be professional and simple to read.

Your mission statement is the foundation upon which you can formulate a vision and plan. It clarifies your core purpose and attracts the right people to your organization.

Your vision is your grand plan. It sets forth the future you're meaning to create and how you wish to change the world. It should be more forward-thinking and action-oriented than your mission.

Consider the needs of your intended population or the demographic you aim to serve. Research already existing organizations serving those needs and envision how you can add to that or bring new ideas to the table.
 

Build a Solid Foundation

Before determining the best legal status of your organization, you need to have a comprehensive business plan. The organizational plan should include:

Most importantly, you’ll need a distinguishing feature to set your nonprofit apart from existing ones.

Create an Organizational Plan

After you’ve set out a detailed plan for your nonprofit, you need to consider the ideal legal status for it. As a nonprofit, you have the privilege of applying for tax exemption, which qualifies you for charitable funding and special nonprofit grants. 

Keep in mind that if there are any proceeds beyond the operating costs, your nonprofit has to invest those back into the organization instead of going into your pocket. This excludes staff payment, program funding, etc.

That’s the thing about NPOs; if you want to make big profits, then a better option for you may be a standard, for-profit business.

Determine The Legal Status of your Nonprofit

To register your nonprofit, you’ll need to have a board of directors consisting of a leader, treasurer, and secretary. Board members are typically unpaid, and they’re responsible for supervising the staff and the strategic operations. 

Make sure to recruit board members with varying expertise—yet with no conflicts of interest! They also need to dedicate as much as necessary time and energy to work on your organization. 

In order to officially incorporate in a US state, you would be asked for the list of board members. Do check your state’s website for further details.

Recruit Board Members

Now you need to register your nonprofit as a corporation with the US Secretary of State, a process known as incorporation. To apply, you’ll be asked for the following:

The articles of incorporation: a legal document with the details of your NPO’s structure.

Your organization’s bylaws, or the rules of how the NPO will be run.

We strongly recommend that you seek out some legal advice from an attorney to assist you with the incorporation paperwork. You’ll also find many free templates available online.

Incorporate your NPO

Every organization needs an EIN—an employer identification number—to be recognized by the American government. Nonprofits are no exception. 

EIN is basically an SSN (social security number) for your nonprofit. You can easily apply for an EIN online through the IRS website. Upon getting your EIN, you can open a bank account for your NPO.

File for an EIN

After successfully registering your NPO through the government, you can now file for the 501(c) status, which essentially classifies your organization as a tax-exempt one. 

29 types of NPOs are eligible for tax exemption. You’ll need to fill out the IRS’s 1023 form—or check if you’re eligible for the expedited 1023-EZ form. 

The application process can be pretty long and requires several documents and a filing fee. Make sure to start it as early as you can, and it’s best to get help with the paperwork from an attorney.

Apply for Tax-Exemption

In most states, NPOs are required to file for charitable organization status before solicitation. You can do this through the attorney general’s office. Do check your state’s website before you start fundraising.

File The Foundation With Your State

Once your 501(c) status is approved by the IRS, you’re now officially an NPO. You can start your operations to achieve your nonprofit goals. 

Building an online and community presence

Start Operating

To maintain your tax exemption status, you’ll need to annually file IRS’s form 990 and always stick to your bylaws. Also, make sure to follow this compliance checklist of dos and don'ts.

Stay Compliant To Your 501(c) Status 

Now that you know the essential steps to start a nonprofit, you’re ready to embark on this journey toward growth and social change. Remember to keep your mission at the center of every conversation you have on services, recruitment, and finances.

Also, make sure to regularly review your business plan—particularly the financials. Pay special attention to your milestones to make sure you’re always on track. Adjust accordingly if you’re not meeting your goals.

Your nonprofit can significantly improve the quality of life for others and contribute to bettering our world. You’re a trailblazer for social change – let’s do this!

How to Start a Nonprofit

10 Main Steps for Starting a Nonprofit

Build a Solid Foundation

Create an Organizational Plan

Determine The Legal Status of your Nonprofit

Recruit Board Members

Incorporate your NPO

File for an EIN

Apply for Tax-Exemption

File The Foundation With Your State

Start Operating

Stay Compliant To Your 501(c) Status

Conclusion

How to Start a Nonprofit

10 Main Steps for Starting a Nonprofit

Build a Solid Foundation

Create an Organizational Plan

Determine The Legal Status of your Nonprofit

Recruit Board Members

Incorporate your NPO

File for an EIN

Apply for Tax-Exemption

File The Foundation With Your State

Start Operating

Stay Compliant To Your 501(c) Status

Conclusion

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