char it able nonprofit 7 steps to st ar ting a succe ssful
TRANSCRIPT
7 Steps to Starting a Successful 501(c)(3)Charitable Nonprofit
From Business Plan to Fundraising
BY
Updated November 20, 2019
The number of charitable nonprofits has proliferated in recent years. As of 2013, there were
nearly a million such organizations in the US according to the Urban Insitute.
We're talking about "public" charities, the kind most of us support with our donations. They
are called 501(c)(3) tax-exempt nonprofits.
There are many classifications of "nonprofits" within the IRS tax code. You probably do
business with some of them without even realizing they are nonprofits. For instance, your
daycare center might be nonprofit as well as your local credit union.
We're most familiar with public charities like the American Red Cross or your favorite
museum. The number of public charities has grown rapidly, much faster than other types
of nonprofits.
Consequently, there is fierce competition among charities. All charities must raise funds
from the public in order to qualify for tax exemption from the IRS.
Just as there is a high rate of failure among business startups, charities can go under just
as quickly. That's why the founders of new charities must think long and hard about why,
where, and when it makes sense to start a new organization.
Unfortunately, not everyone who starts a charity has thought out his or her idea. Don't
make the mistake of just jumping into the nonprofit arena. Think carefully before starting
your charitable nonprofit and follow these steps.
NONPROFIT ORGANIZATIONS STARTING A NONPROFIT
JOANNE FRITZ
Do Your Research01
Having a passion for your cause is essential, but remember that a nonprofit is primarily a
business, and you need to be realistic in starting one.
Is there a need for your organization? Or could you team up with another, existing
nonprofit? Another nonprofit can even serve as your fiscal sponsor instead of or until you
can become registered. Are you sure that a nonprofit is the best business structure for your
idea? There are other ways to accomplish a social mission.
What Is a Nonprofit Organization?
How Does a Nonprofit Di�er From a Business?
Ask Yourself These Questions Before You Start a Nonprofit
Eight Alternatives to Starting a Nonprofit
Common Nonprofit Startup Mistakes
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Nonprofits are very similar to for-profit businesses in many respects. For instance, you
need to have at least as much money coming in as going out even to survive, much less
Develop a Business Plan02
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succeed in your mission. Many nonprofit start-ups launch on a wing and prayer rather than
a well-thought-out plan. Here are some "plans" you need to have in place before you
startup or soon afterward.
What is a Business Plan and Why Do I Need One?
How to Develop a Strategic Plan for Your Nonprofit
A Nonprofit's First Fundraising Plan
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Make Sure That Your Organization Will Actually Qualify as a Nonprofit03
You might have a great idea, but are you sure it will qualify as a charitable cause? There are
many types of nonprofits. Which one is yours? It may not be what you think.
What's the Di�erence Between a Church and a Religious Organization?
What Is a 501(c)(6) Membership Based Nonprofit?
What Is a 501(c)(7) Tax-Exempt Social Club?
What Is a Foundation?
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Be Sure to Take Care of All the Legal Requirements04
Nonprofits are heavily regulated, both by the states in which they reside and by the federal
government.
Regulation is needed to protect donors from fraud and ensure that nonprofits continue to
serve the public good. Just because you are "nonprofit" doesn't mean that you can't get
into some serious trouble.
An Overview of Nonprofit Incorporation
What Is an EIN and Why Does My Nonprofit Need One?
What Are Articles of Incorporation?
What Are Bylaws?
How to Write Your Nonprofit's Mission Statement
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Keep Good Records and Manage Your Risk05
Good record keeping is a must, and nonprofits have some reporting requirements that are
special to them. Start with good records, and you are less likely to run into problems later.
Manage risk with safety procedures and proper insurance.
How Business-Like is Your Nonprofit?
Things You Need to Know About Form 990
5 Kinds of Insurance Your Nonprofit Should Consider
Nonprofit Accounting Guide: What You Need to Know
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Develop a Fundraising Plan06
Fundraising is a sophisticated, complex, and competitive endeavor. But it is unavoidable for
a nonprofit. Don't make the mistake of thinking that all you need is a bake sale or a fancy
dinner to raise the money you'll need to adequately fund your organization.
Where Do Nonprofits Get Their Income?
6 Steps to a Fundraising Plan for a New Nonprofit
Is Your Nonprofit Ready to Apply for Foundation Grants?
How To Write a Grant Proposal
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Build an Effective Board07
FAQS
4 Mistakes That Could Cripple YourNonprofit Startup
STARTING A NONPROFIT
What Is a 501(c)(3) Tax-ExemptOrganization?
FAQS
What Qualifies a Nonprofit for TaxExemption?
STARTING A NONPROFIT
Is Your Nonprofit Ready to Apply forFoundation Grants?
NONPROFIT ORGANIZATIONS
Why Your Nonprofit Needs a Board ofDirectors
GRANTS
Grant-Writing Myths Nonprofits ShouldReject
STARTING A NONPROFIT
What the Heck Do Nonprofit Boards ofDirectors Do?
STARTING A NONPROFIT
How Much Does It Cost to Start aNonprofit Organization?
RESOURCES
Why Stakeholder Relations Are SoImportant
BASICS
6 Steps to a Fundraising Plan for NewCharities
STARTING A NONPROFIT
6 Ways Your Nonprofit Could Lose ItsTax Exemption
CHARITABLE GIVING
The Basics of Tax Deductions forCharitable Donations
FOLLOW US
RESOURCES
How Do Charities Make Money?
GRANTS
How to Write the OrganizationalBackground for a Grant Proposal
FUNDRAISING
Why Donation AcknowledgmentLetters are So Important
STARTING A NONPROFIT
What Your Nonprofit Needs to KnowAbout Form 990
ALSO FROM THE BALANCE TEAM
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It cannot be overstated how important your board is to your nonprofit's success. It is legally
responsible for keeping you on track with your mission, helps you to secure the funds you
need to accomplish that mission, and provides much of the expertise that you will need.
Find the right people, get them on board, and keep them interested.
What the Heck Does a Nonprofit Board Do?
Your Nonprofit's First Board of Directors
Where to Find Nonprofit Board Members
How to Get Your Board to Step Up to the Plate in Fundraising
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