How to Start a Non-Profit Organization in US

What is a Non-profit organization?

While both profit and non-profit organizations have the same techniques and business strategies, a for-profit organization shares its profit with its owners, whereas a non-profit organization doesn’t share its profits with the owners but donates them instead to reach the goals and objectives of their organization. If we can easily define non-profit, it can simply be said that it is an organization where humans with high values support other highly valued humans, without focusing on income and profit.

What is your “why” to start a non-profit organization?

There are around 1.5 million non-profit organizations and charitable organizations in the US. Before you start one, make sure of your “why” and have clear objectives and goals in place to stand out. Though it is a great and impactful way to serve the community, it does need strategy and proper planning. You may have hundreds of non-profit organization ideas, but cracking and going in the right way will lay a strong foundation for your growth.

Start with a basic mission and vision statement as it defines your purpose behind this idea, on whether it is to build a healthy community by contributing valuable services or just to be tax-exempt. Be specific while you define your outcome or goal.

Types of Non-profit organizations in the US:

Two types of organizations that come under the category of non-profits are non-profit organizations (NPO) and not-for-profit organizations (NFPO). The former often serve as groups and fall under the government at times, while the latter function as private members, groups, and private foundations. There are some types of organizations that include

• Section 501 (c) (4): social welfare organizations and volunteer fire companies
• Section 501 (c) (5): agricultural, labor, and horticulture organizations
• Section 501 (c) (6): organizations related to commerce, real estate
• Section 501 (c) (7): an organization that covers Social and Recreational Clubs
• Section 501 (c) (15): associations and companies that serve for mutual insurance.

Roadmap to start a non-profit organization:

1. Define your way

Doing and being the same as all the other non-profit organizations will cause no good. To stand out and to stand ahead, one has to know the key performance indicators, which are the utmost goals that would differentiate them from the rest of the others.

Starting a non-profit organization, of course, is a tedious and complicated process. Not having a proper mission and vision in mind, and working without any proper intention, is not advised for the long run and welfare of the organization.

Once you are clear about your purpose:

• Find your target audience and collect demographic data about them.
• Find the organizations that are doing similar work and have similar goals, and work on how you can vary from them.
• Choose the right people whom you are going to be working with.
• Think of at least 2-3 short-term goals and the way you are going to process forward.

2. Work on the foundation

"A solid foundation is the key success"

Think about learning and writing in a foreign language, without knowing its alphabet. Regardless of the type of organization, not having a strong foundation is similar to learning a language without knowing its basic steps.

1. Name of the organization - An unique and relevant name for the organization shapes the tone of the company. As it is related to the entire identity of the organization, make sure you take enough time out to decide it, as it is going to last for decades together.
2. Mission statement - The mission statement not only helps at the early stages but throughout the entire journey. It acts as a motivating factor for you and also for the people you work with.
3. Determine the vision and its values - What is the highest value you would like to give to your community? Analyze and find that with your team before you step into the game.

3. Create a Detailed Business Plan

To proceed and move forward most efficiently within your business, one should have a detailed business plan which covers the marketing aspects, the financial plan, the services and products provided, and a business operations plan, as it would help the overall growth of the organization.

4. Build a Strong Team

A non-profit organization requires board members, volunteers, and other staff members who have the right qualities that would elevate the growth of the organization and benefit the organization as well. Form a team with people who meet only the eligibility requirements in order to make the entire process that follows easy and hassle-free.

5. Build Your Identity

Online presence now is as important as the offline presence of the company. Now you have your business plan, your highest goal, and other important above-mentioned aspects ready.

Now it is time to take the predominant measure, and that is to go live in the global internet space. Build your brand identity as it will help you network with people from your industry, and identify and work with your target audience. Make sure your website and social profiles accurately reflect who you are and what you are offering. Showcase your efforts with stunning visuals and storytelling.

6. Incorporate Your non-profit Organization Legally

As you have everything in place right from the name of the organization to a well-qualified team, work on the paperwork and file them into a legal document.

As the 501(c)(3) label is applicable for non-profit organizations, charitable trusts, and other religious organizations, it is advised to work on that sooner the better. Section 501(c)(3) is a part of the United States Internal revenue code that allows tax exemption for non-profit organizations. Registering as one is advised as the first and foremost step of starting the organization, as the sooner the better so that you are exempted from the usual corporate income taxes due to its charitable purposes.

7. Secure Startup Funding

A strong funding source supports the organization for the long term. As such, you should work on finding such reliable and strong sources right from the beginning as it has a huge impact on the longevity of the organization. You can also decide on the funding model, funding sources, and fundraising plan even before the start of the organization.

It’s Up To You…

We agree that beginning and running an organization is no easy task no matter which country you belong to. Thus, we have curated a step-by-step guide for you on how to start a non-profit organization in the United States.