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This topic in the Library provides comprehensive advice and materials for anyone who is
considering starting a nonprofit organization. The reader can use the free information in
this Library topic, along with other Library topics that are referenced later on below
Major Resources
Free Booklets -- "Guide to Management, Leadership and Supervision" and "Program
Design & Marketing"
Free Nonprofit Micro-eMBA -- (self-paced, online nonprofit dev. program)
General Resources
Sources of Assistance to Help You Develop Your Nonprofit
Before starting a nonprofit business, there is some preliminary "business" thinking that
you really should do. Doing this thinking now can save you -- and maybe your employees
and clients -- a great deal of anguish.
Preparation for Planning a Business Venture
1. At is most basic, the mission statement describes the overall purpose of the
organization. It addresses the question "Why does the organization exist?"
2. The statement can be in a wide variety of formats and lengths, ranging from a few
sentences to a few pages. At this stage in the development of your nonprofit, it might be
best to keep your mission statement to at most about half a page.
3. When writing the mission statement, try include description of what you think will be
the new nonprofit's
a) primary benefits and services to clients
b) groups of clients who will benefit from those services
c) values that will guide how your nonprofit will operate
d) how you'd like others to view your nonprofit
4. It's often useful to refine the first, basic mission statement by adding or deleting a
sentence or a word from the mission statement until you feel the remaining wording
accurately describes the purpose of the new nonprofit organization.
• You can be a nonprofit organization just by getting together with some friends,
eg, to form a self-help group. In this case, you’re an informal nonprofit
organization.
• You can incorporate your nonprofit so it exists as a separate legal organization in
order to a) own its own property and its own bank account; b) ensure that the
nonprofit can continue on its own (even after you’re gone); and c) protect yourself
personally from liability from operations of the nonprofit. You incorporate your
nonprofit by filing articles of incorporation (or other charter documents) with the
appropriate local state office. (An incorporated nonprofit requires a board of
directors.) In Canada, you can file for incorporation at the provincial or Federal
levels.
• If you want your nonprofit (and if you think your nonprofit deserves) to be
exempt from federal taxes (and maybe some other taxes, too), you should file
with the IRS to be a "tax-exempt" organization. (The IRS states that you must be
a corporation, community chest, fund, or foundation to receive tax-exempt status.
Articles of association may also be used in place of incorporation.) (Probably the
most well known type of nonprofit is a the IRS classification of 501(c)(3), a
“charitable nonprofit’.) (Being tax-exempt is not the same as being tax-
deductible.) In Canada, you can file for tax-exemption at the provincial and
Federal levels.
• Depending on the nature of your organization, you may also granted tax-
deductible status from the IRS. Publication 526 lists the types of organizations to
which donations are deductible. In Canada, the Canada Customs and Revenue
Agency (CCRA) grants charitable status, and you must be incorporated to achieve
charitable status.
• So, for example, you could start a nonprofit that is incorporated, tax-exempt and
eligible to receive tax deductible donations.
• The particular steps you take when starting your nonprofit depend on your plans
for your organization, including the nature of its services. They also depend on
how the IRS interprets the nature of your organization, including its services.
Again, in Canada, you can file for incorporation and tax-exempt status at the
provincial or Federal levels.
Nonprofit Incubators
Business incubators are usually facilities that help businesses share resources as low-cost
means to getting started. You may have a nonprofit incubator in your community.
Contact the local office of the National Council of Nonprofit Associations to find out.
The following links will give you an overview of business incubators.
What is a business incubator?
The following are a variety of checklists to help you proceed through the various steps to
formally start your nonprofit. It'll help a great deal if you've done some preliminary
planning -- if you haven't, the above link Preparation for Planning a Business Venture
will help you.
You might glance through a variety of the checklists to get an impression of what needs
to be done and to select the checklist that you believe is most useful to you. The topic
Nonprofit Taxes will be useful reading after you've reviewed the following checklists.
2. Here's another checklist with the information BoardSource's "Q & A" and Start a
501(c)(3) non-profit organization
. These are very basic overviews of the major steps to start a nonprofit.
3. You might also see How to Start a Nonprofit. It mentions several of the same steps,
and adds references to more forms needed by the IRS.
4. Once you've got a basic sense of the major steps to form a nonprofit, review Eve Rose
Borenstein's comprehensive and sound advice about Legal Needs Relative to Nonprofit
and/or Tax-Exempt Status of New Organizations in the USA. This information is quite
complete and covers incorporating, nonprofit vs tax-exempt, qualifying for tax-deductible
dollars, how to apply for tax-exempt status, and much more. Also see her sample Articles
of Incorporation. (NOTE: There are more samples of articles of incorporation, along with
bylaws, at Articles of Incorporation at Corporate Bylaws.)
The Nonprofit FAQ provides similar information that's worth reviewing as well, to
enhance what you've learned so far. They summarize many resources in Where to Start.
Basic Guide to Nonprofit Program Design and Marketing provides complete guidelines
and resources to develop your nonprofit programs and services "from the ground up".