Tuesday, November 8, 2011

OK, you want to start a nonprofit...

Last Sunday I had my family over for dinner and my younger sister says, "I want to start my nonprofit...what do I need to do?" First of all, it is challenging explaining in detail the nonprofit startup process to a novist; however, I did my best.

A 501c3 tax-exempt nonprofit organization is its own entity, similar to a for-profit corporation; however, none of its earning or profits can be used to benefit its "Board" or members. The revenue and profit, yes nonprofits can make profits,  must benefit the nonprofit organization itself or those that it serves, typically a charitable group such as at-risk youth, distressed neighborhood residents, the poor, etc. You can review the IRS' description of a nonprofit within chapter 3 of the IRS' Pub. 557  http://www.irs.gov/pub/irs-pdf/p557.pdf.

My professional (and brotherly) advice as one with a Graduate Certificate in Nonprofit Mgmt from TSU (Nashville, TN) and more than 10 years exceptional experience was for her (my sister) to write her plan for the nonprofit. The plan answers questions such as what will your nonprofit do, who will it benefit, what programs/services will it provide, who will it provide programs and services to, how much does it cost and where will the funds come from and where will you deliver these programs and services...this of course is not an exclusive plan.

You should do the same!

Next steps are to incorporate (tech term) your nonprofit in your state, create and identify a board (tech term) and complete and submit the IRS 1023 (another tech term) to gain your tax-exempt status...more information on this "form" is available at  http://www.irs.gov/pub/irs-pdf/f1023.pdf. This is a challenging form to complete for a novist.

It is not an easy process, but running a nonprofit is noble and rewarding. You are like an extension of God's hand itself. You can also visit http://missionvisionpartners.com/app/download/2010655604/MVP+-+Nonprofit+Development+Flowchart.pdf and download a neat nonprofit development flowchart tool. Send me an email if I can help you start your nonprofit.

PS...do it right and do not allow your organization to have its 501c3 revoked like the many that did throughout the US. (picture above is me and colleagues presenting a donation to the Red Cross)