We live in an area where there are many opportunities to launch your own business and concentrate on supporting environmental and social causes. If you want to make a difference in the world, using your business talents and setting up a nonprofit organization may be a no-brainer.
Before you make it official and get started, here are some useful tips to take on board to help you launch and run a thriving nonprofit organization.
Understand Your Options
If you’re thinking of running a nonprofit organization, it’s important to understand your options first. You may be wondering, what makes a business nonprofit? The answer is simple. The purpose of a nonprofit is to fill a need in the community or society. While you can command a salary from your nonprofit, you will never take home business profits.
Alternatively, a for-profit business may do a lot for the community. However, its primary goal is to make a profit for the owner. One of the key benefits of opting for a nonprofit business is that you can obtain tax-exempt status. You’ll also be in a better position of attracting donors, grants, and volunteers. Whatever route you’re leaning toward, take your time before making a decision.
Build a Solid Foundation
If you’ve decided on a nonprofit organization, it’s time to build a solid foundation. This begins by drafting your mission statement. This will communicate to donors and the wider public the purpose of your nonprofit, what group it serves, and how it will serve them. Each action and decision in your nonprofit organization should strengthen and further your mission.
Next, you need to develop a solid nonprofit business plan. This should outline your ambitions and goals in more detail. A business plan can also outline new projects or ventures. You must include a section for your budget in your business plan too. To make things easier, you can use Givebutter’s nonprofit budget template. Their nonprofit budget template will help you reach your goals. Never rush through the planning stages of your nonprofit business. It may feel like a chore to sift through, but you need to go into this venture with your eyes open. That way, you will be prepared and ready to run a successful nonprofit.
Incorporate Your Nonprofit
Once you reach this step, it’s time to look for resources that are specific to where you’re based. You should consider incorporating your nonprofit, and for a multitude of reasons too. For one, incorporating your nonprofit provides you with more freedom to expand and bring about the change you’re passionate about.
Having a formal structure will boost the credibility of your services and programs too. Also, incorporating your nonprofit organization makes it simpler to get tax-exempt status. This means there may be private and public grant money available to you. Combining will also provide limited liability protection for the directors. Should you not form a legal entity, the director’s and members’ personal assets, like their home or retirement savings, are at risk should a lawsuit occur.
Apply for State Tax Exemption
Once you have incorporated your nonprofit organization, the next step is to apply for state tax exemption status with the IRS (Internal Revenue Service). However, be warned that the user fee can be upwards of $600. The amount you pay will depend on what application method you choose. Also, it can take between 3 and 12 months for the IRS to come back with its decision.
Obtaining tax-exempt status is important for your nonprofit business for several reasons. Firstly, doing so will exempt you from paying federal income tax. Secondly, it will open the door for grant funding. Finally, you will have an exemption from local and state taxes.
Build Your Skillset
While nonprofits differ from traditional businesses, there are certain attributes you must hold in order to make your nonprofit a success. Whatever cause you’re passionate about, you need to have the right skills to manage and run a thriving nonprofit.
Some of the top qualities include enthusiasm and dedication to your chosen charitable cause. Having excellent team-working skills and knowing how to communicate effectively. Things won’t always go your way when running a nonprofit, and some periods will be more stressful than others. Therefore, learning how to work well under pressure is key to keeping your nonprofit afloat. Once you learn and master these transferable skills, you should have no problem setting up a successful nonprofit.
Launching a nonprofit organization can be a remarkable way to give back to your community and provide help to those who need it most. However, it’s essential you read and take all the tips above into account before moving forward. Growing and sustaining your nonprofit will take years of hard work, determination, and motivation. But, once you utilize everything that’s been said, we’re confident you’ll gain tons of success.