Have you ever had an idea you can see so clearly, so precisely, that you know it has to be shared with the rest of your community, state, country, or even the whole world? You've probably thought about starting a non-profit organization as a way to turn your dream into a reality.
It's important to remember that a non-profit organization is a business, just like all the for-profit companiesÂ out there. You should think like a CEO right from the start. With the proper tools and support, you can start giving back to your community and changing lives. Â In this post, we'll explore four things you should do as you make plans to get your non-profit organization up and running.
Survey the landscape
First, begin by surveying the landscape. This means looking outwardâ€”and inwardâ€”for some direction. Ask yourself some questions about the nature of the business:
1. Am I passionate about my work?
2. Is there a need for it?
3. Who will this organization serve?
These questions might help you develop a mission statement or an operating plan. They can also help anticipate issues that may arise when starting a non-profit. Research other similar organizations in the immediate geographical area. Identify who they are already serving and decide how you will be different. And even though it may feel early to talk about fundraising, it's actually not. Can you raise funds without competing with similar organizations?
Use GuideStar by Candid for research
Next, dive into research that pertains to philanthropy and non-profit organizations. GuideStar by Candid is a vital tool for this process. GuideStar provides users with data-driven solutions through transparency and efficiency. The user-friendly database promotes positive change by focusing on financials and operations. The IRS has also offers a non-profit search database. If you want to make the best non-profit business decisions, it helps to know what already exists.
Create a business plan
Now that you've done you preliminary research, you can start thinking about the components of your business plan. This part might feel like homework, but we promise, it can be pretty fun and fulfilling. You're going to put into writing exactly what your non-profit organization will look like and accomplish: what you'll do and how you'll do it. These details will include costs, timelines, a projected list of activities, and anything else that will create a robust vision of your business. Remember: you must present the IRS with a detailed business plan in order to obtain tax-exempt status. Our advice: be thorough and stay organized.
Complete Form 1023
Your business plan will give you much of the information you'll need to complete Form 1023, which is your formal application for exemption. Preliminary research and preparation are key in accomplishing this step. Even if you're going to complete Form 1023 yourself, we highly recommend consulting with a qualified non-profit attorney who can help you with the appropriate language to explain your organization to the IRS.
Paperwork and protocol shouldn't hold you backâ€”by thinking through some key decisions, you'll be set up for success. With the proper tools (and a great idea), you'll be well on your way to forming a non-profit business entity and achieving tax-exempt status. We're passionate about helping non-profits get off the ground and achieve long-term success, which is why we created a free download to share the lessons we've learned over our years of seeing non-profits succeed and fail. Get your copy now: How to start a non-profit organization.