Currently, over 1.7 million nonprofit organizations exist in the US, each playing a pivotal role in society.
These organizations fill crucial service gaps that other means often overlook. It’s important to recognize that millions of people across the country depend on nonprofits. If you’re considering venturing into this sector, there are key aspects you should ponder before taking the plunge.
Nonprofit or Not for profit
First and foremost, it’s crucial to grasp the difference between a nonprofit and a not-for-profit organization.
While both enjoy tax-exempt status, they have distinct characteristics. Nonprofits are tax-exempt and provide public good, typically in the form of charities, foundations, hospital systems, etc.
On the other hand, a not-for-profit doesn’t necessarily need to provide public good. It simply must serve a direct community or members, such as dinner clubs, amateur sports clubs, etc. Understanding this distinction is key to ensuring you meet the criteria for a nonprofit.
Know Your Mission
It’s essential to have a crystal-clear mission, understanding exactly what you’re doing and who you’re helping. Crafting a concise mission statement, around 1-2 sentences, is a crucial step.
This statement will be used in all of your organization’s published materials, serving as a beacon for your work. It should clearly articulate your purpose and how you plan to make a difference, ensuring that people immediately understand what your organization is all about.
What Budget Do You Have?
You need the vee money and resources to get up and running while you work on generating donations. Know how much you will need for daily running expenses, whether you need to hire an entire team of staff and pay salaries, and what supplies you need, etc.
Will you need to pay rent for a building? Do you need an accountant to help you with your finances and meet your tax obligations, i.e., 990 filing requirements? Have an idea before you start of how much money you need to get up and running and how much you need to make to keep going.
How Will You Raise Money?
Continuing from the previous point, it’s essential to know not only how much you need to keep running but also how you will raise the necessary funds. Even the smallest tasks require financial resources, so being proactive in fundraising is crucial.
There are various avenues available, such as holding fundraisers, running social media campaigns, organizing auctions, or hosting online events. It’s important to have a clear fundraising plan in place before you start to ensure a successful start.
Who Will You Need to Hire?
A nonprofit will not run itself, and you will need to have a board of directors and an executive director. They will need the skills and knowledge to guide you to success and manage the board at meetings. It is best if they have an in-depth knowledge of the sector and experience in similar roles. They should also have a belief in them and the same values as you do, so they can work with you to support your work, not under it.
Are you considering starting a nonprofit? What inspired you to get started?
