How to Start a Nonprofit Organization

The list is endless when it comes to the role of non-profit organizations (NPO) globally. Some of the greatest works that show compassion for humanity and the environment have been done by nonprofits locally and internationally. Although it might seem these organizations are easy to set up, it takes a lot of effort and passion. It also needs a lot of strategy and research. Therefore, if you consider starting a non-profit organization, read on to find out more.

Do Your Research

Before going into the business of non-profits, do intense research and learn more about managing non-profits. Internalize new things that you will bring in; thus, making it different from the thousands of non-profits that already exist

Understand the niche and be specific

In simple terms, get details of what the non-profit you are venturing into entails. For instance, if you are interested in a non-profit about children, research on legalities of working with children.

The research process allows you to narrow down your goals and niche. In fact, be as specific as possible. Identify who the charity organization will be serving, why you have chosen them, and what you plan to do with them. The more you do your research, the better and more specific your goal will be.

Establish Your Brand Name

The name of your non-profit is as important as it would be if it were a profitable business. There is a lot that goes towards finding the right name and how to create a brand.

Talk to experts on the basics of finding the right brand name and running non-profits. You can also try our business name generator to help come up with creative name ideas for your organization.

Research from other non-profit organizations and do not look at them as competition but rather as a potential for future collaborations. Always remember that there is no question too basic to ask. If you do not know anything, feel free to ask.

Build a Foundation

After doing your research and choosing a niche, it’s time to create a firm foundation. This involves determining the kind of founder you’ll like to be, pinpointing your partners, and developing a plan for establishing your nonprofit.

Create a Mission Statement

Your organization’s mission statement concisely explains your services and objectives. This plays a crucial role in the success of your organization because it gives your audience and partners reasons to support and collaborate with you.

Below are a little guidance for drafting the ideal mission statement:

Keep it brief and straightforward: Compose a mission statement that is easy to read and understand. Use a few sentences and do not use buzzwords and jargon.
Be specific: What makes your nonprofit unique and better than other nonprofits with an identical mission?
Don’t be time-specific: This should feature your nonprofit’s short and long-term goals.

Develop Your Organizational Vision and Values

A vision statement describes your end goal. For example, what changes do you want to see in your neighborhood or community after your work is done? Moreover, a vision statement should be a driving force and motivator for your everyday operations.

Furthermore, your organizational values are a cluster of principles followed by everyone at your organization, including volunteers, staff, supporters, and board members. This will guide all actions and decisions at every corner and level in your organization.

Create a Business Plan

As a startup, you need a blueprint for how your organization will operate and how all goals will be achieved. A business plan comes in handy for your business operations and for everyone who’s looking to support your organization. Financial organizations and all other funding sources usually request this document before making their final decision.

Let’s quickly look into what to include in your organization’s business plan.

Read More: How To Write a Business Plan

Executive Summary

This is an overview of your business plan. When creating yours, you need to consider it as an elevator pitch. What would you like your readers to know if they are chanced to read this section?

Additionally, ensure that you include your vision, mission, values, a summary of your objectives, and your approach to achieving them.

Programs and Services

You need to provide an ideal explanation of the things you’ll be addressing in the society through your organization and to whom your services will go. For several nonprofits, this features things like membership benefits, programs & services, events, and resources.

Market Analysis

Give an explanation of the market landscape’s current condition and do well to include a SWOT breakdown. These imply the strengths, weaknesses, opportunities, and threats that will play a significant role in helping you determine how to prepare your organization for success.

Marketing Plan

It will be best to form a solid marketing strategy that will help publicize your nonprofit. Moreover, your marketing plan should be able to provide answers to the following questions:

Who is your focus audience, i.e., supporters, potential members, and donors?
How will you locate them?
How will you attract their interest?

Operational Plan

Your nonprofit’s operational plan is a guide to your everyday activities and functions. Your operational plans should provide answers to the following:

Where will your office be located?
What equipment and supplies will you need?
How do you plan to provide your services?
What are volunteer & staff roles required?

Impact Plan

This is all about the optimistic effect of your nonprofit on society or community. An impact plan should answer questions like:

What are your goals?
What are the tools you need to achieve them?
How do you gauge success?
How will you convey your influence to your society or community? This includes annual reports, impact reports, stewardship activities, etc.

Financial Plan

Creating a financial plan is important as it helps your organization maintain a healthy budget, apply for grants, and obtain donations. If feasible, you can reach out to someone with experience in accounting to put this together if you don’t know how to go about it.

Financing a non-profit organization can be overwhelming. However, it should be a relatively smooth operation if you plan things carefully and use the appropriate tools.

Funding and Revenue

There are many more ways that charity organizations could raise money. It needs a lot of creativity, networking, and strategizing for you to get it right. The first thing is to have a list of important projects you want the non-profit to embark on. Draw an estimate of how much the projects will cost and where you intend to get the money from. Identify some donors and potential collaborators who could be interested in the kind of projects you are thinking of and write a proposal to seek funds.

Overhead costs

Another factor to consider is the overhead costs for NPOs. This refers to the amount of money you may need to cater for things like paying staff, hiring venues, and expenses not directly related to the charity’s mission. As a rule, the overhead costs should be below 20% of the total budget. Auditors and donors always prefer when the majority of funds directly support the mandate of the non-profit.

Most non-profits depend on donors for funding. It is never as easy as writing a proposal and taking the money. You need to be deliberate on the kind of donors you are associating with. Avoid the ones that have been embroiled in scandals or mentioned extensively in problematic situations. When people associate your non-profit with fraudulent organizations, it ruins your reputation and affects future fund drives.

How to Generate Revenue

You need to consider and reflect on how your nonprofit will yield revenue. This can be done in three ways- through the provision of value, fundraising, & government grants.

1. Providing Value

This includes details like events fees, membership dues, and merchandise sales. In return for membership benefits, events attendance, and access to publications, people will need to pay a fee. However, in this case, all profits will be directed towards expanding and advancing your nonprofit’s mission.

2. Fundraising

This features soliciting donations from corporate sponsors, individual donors and the arrangement of fundraising events. Many states have made it compulsory to complete a Charitable Solicitation Registration, while some require registering for Games of Chance like draws and raffles.

Unlike the states listed above, these activities are illegal. Also, do well to check your state’s regulations before registering.

3. Government Grants

Here, we have provided some helpful platforms to start your search for government grants related to your nonprofit:

For any inquiry on how to apply, the United States Government has provided a helpful guide on knowing your eligibility, preventing grant scams, and other application instructions.

Hire Staff Members

To help the growth and advancement of your nonprofit, you need to recruit staff members and determine your office space. Several small nonprofits begin operations with one full-time or part-time staff member until it gets to a point when they require extra help. If you can’t tell how many staff members will be required, you can check the various common nonprofit staff roles provided below.

Administrator/Membership Manager: This role is vital for developing recruitment strategies, keeping member records, and engaging members if your nonprofit will form an association or club.
Communications Manager: You need to consider this role if your organization will depend greatly on public relations activities, social media campaigns, public speaking events, and volunteer management.
Fundraising Manager: You will require the services of anyone who has experience or specializes in fundraising if your nonprofit relies mainly on donations, government grants, or corporate sponsors.
Events Manager: This role is crucial if your nonprofit will organize yearly conferences, big monthly events, and other skill-based events like educational workshops and a speaker series.

It would be best if you considered the following when recruiting staff members.

Create a budget for salaries.
Define your terms. Is it a contract job or a salary job?
The types of benefits attached to being a staff member.
Design a standardized performance review approach.
Sign-up for all required programs within your state. This includes registering for unemployment insurance and worker’s compensation.

Prepare and Plan for Growth

Here, we have provided a few tactics used by nonprofits to plan ahead, spread the word, and locate their first donors and members.

Send a customized email to everyone you know regarding your new nonprofit and implore them to share the message with all their contacts.
Organize an open house networking occasion and invite the people you’d love to inform.
Post industry resources online & drive traffic to them via social media, blog posts, speaking events, emails, and news publications.
Reach out to similar organizations in other places or cities.
Enter established communities where you can find your target market. These include online platforms like LinkedIn or Facebook, Meetups, Groups, or similar events.
Provide informative bookmarks at the check-out desk of your local library.

Ongoing Compliance

Once you’re done setting up your organization, there are several things you must do yearly to maintain your tax-exempt status. First, you must file a 990 Document. This form contains information about your expenses, revenue, board members, accomplishments, and other organizational information. However, there are different forms depending on your gross receipts.

If your gross receipts are over $50,000, you must sign a 990 Form with the IRS.
If your gross receipts are below $50,000, you must file an e-Postcard with the IRS.

Conclusion

Setting up a non-profit can be a simple process if you have the right strategies. Indeed, use our name generator to create a memorable name that will work perfectly with your non-profit. From there, create a foundation and business plan conveying all relevant information about the charity organization and operations. The trick is to hire a strong team and get volunteers on board. Once you have clear goals and come up with a mechanism to evaluate them, you are several steps ahead in having a successful non-profit organization.