Starting a nonprofit corporation may involve many more steps and costs than starting a for-profit business, but if you are determined to serve your community, it will be most fulfilling.
TRUiC is a useful information company that gives you all the free tools to start a business and succeed. Among all kinds of business help offered online, they include a business idea generator, business name generator, LLC formations, and corporate business creation, including starting a nonprofit. Using a nonprofit has several advantages. As one famous startup tycoon Henri Ben Ezra said: “Knowing how to structure your entities means you have an advantage over competitors who did not put in the effort”.
They offer these useful tips for starting a nonprofit:
Research and assess
There are over 1.6 million nonprofits in the U.S., all vying for donations. Start with some market research so that you can operate in a niche area. That will ensure that your nonprofit stands out and better support from donors.
Create a business and fundraising plan
Like all types of businesses, a nonprofit needs a solid business plan that it will steer toward. This should include how funding will be procured, who the board members will be, and other policies. At this stage, a mission statement needs to be carefully thought out and the nonprofit needs to be named.
Appoint a registered agent
A registered agent is required by most states for a nonprofit corporation. This agent is the contact for the nonprofit and is responsible for receiving any important documents on its behalf.
File for Incorporation
These documents are filed with the state that the nonprofit will operate in and are known as Articles of Incorporation. Accompanying the documents for this is a small fee, which varies in different states. Once these documents are accepted by the state, the nonprofit is formed.
Prepare for the tax-exemption application
At this stage, you need to appoint at least three directors that are not related to each other and apply for an Employment Insurance Number (EIN). Even if you won’t have employees, this will be your nonprofit’s social security number.
Before applying for tax-exempt status your nonprofit corporation will need to draw up its Bylaws to ensure that it is governed and run effectively. You also need a Conflict of Interest Policy to ensure that all decisions are made in the best interests of the nonprofit only and not for any personal gains.
These Bylaws and the Conflict of Interest Policies are adopted at the first organizational meeting held by the directors. At this first meeting, temporary officers need to be appointed to hold positions such as treasurer, secretary, and chairman. Corporate minutes must be kept at this and every future meeting.
Apply for tax-exempt status
Once you have completed all the steps above, your next step is to apply for tax-exempt status under section 501(c)(3) of the IRS. There is an application fee that must be paid, and the process is relatively easy. However, all the forms must be completed correctly.
At the outset, some initial funding will help you start your nonprofit’s mission. This funding can be secured from corporations, private foundations, and from local, state, or federal organizations.
There are many regulations in place for nonprofits, and you will need to ensure that you stay compliant. These include annual reporting to the IRS through Form 990, and ensuring that you register with the office in your state that regulates charitable organizations.
Secure free resources
Your nonprofit will benefit from any assistance offered by state and national businesses, consultants, and organizations and you should use them to secure its development.
Community partners are an invaluable resource for building momentum, unlocking donations, and other opportunities for your nonprofit’s mission. You will also need to develop a professional network that will include other nonprofits and associations that work in your field; local and regional.
Develop a connection with all media, including digital to increase visibility for your work and attract donors.
Even though the process is complex, TRUiC makes it simple by guiding you through all the requirements. Follow the steps which include advice, guidelines, templates, and forms that can easily be submitted online to your state and the IRS. Once you have set up your nonprofit corporation, make sure to follow all the tips provided, and your nonprofit will have all the potential to reach great heights. It is just like Michael Stemley, a top U.S. accountant and the author of “Wealth Power Respect” said: “Plan your business for all eventualities and use experts to guide you along the way, as that in itself, is like money in the bank”.