How to Start a 501c3 Nonprofit Organization
Having a step by step guideline on how to start a 501c3 Nonprofit Organization will greatly reduce the time that you need to invest into getting your life changing endeavour off of the ground. 501c3 organisations (in the US), are exempt from income and property tax, hence it is a good idea to operate your nonprofit organisation under these guidelines. Keep it simple.
1- Work out what is there need for. A large contributing factor to the success of your charity depends on the worthiness of the cause and the need for it to be aided. As well as identifying what needs the public’s attention, you need to find a cause that you truly believe in, as, ultimately, its success depends on your motivation and drive to see it reach its full potential.
2- Write a missions statement. What is it that your organisation hopes to achieve in general? This piece of writing needs to be precise, concise, and compelling, but not overly emotive. Your missions statement will be the first thing, other than your name, that the public and funding bodies will read, so make it perfect.
3- Establish your Board of Directors. Who will be useful? Who is well connected? Who do you find it easy to get on with?!
4- File for Articles of Incorporation. These are official statements of creation of an organization. These will protect the Board and staff from legal issues. You can obtain information on how to file these through the Attorney General’s office or your state Secretary’s office. It may be an idea to consult with an Attorney who is experienced in non-profit organisations at this stage in order to avoid common pitfalls.
5- Write the organizations policy document/bylaws. They aren’t required, however drafting them early in the organization’s life gives you a benchmark on progress and may avoid complications in the future.
6- Draft a conservative budget. Drafting a budget can be quite difficult especially when you have absolutely no idea on how things may pan out. The best approach to this is to formulate a conservative model in order to budget for a ‘worser (bot not worse) case scenario’.
7- Establish a book keeping system from day one. Think long and hard about what information may come in and what you will need to keep. Managing an efficient database from day 1 will reduce the risk of massive information and account overhauls.
8- Through the IRS, apply for a federal employer identification number regardless of whether or not you will have employees. You will need form SS-4. Also fill out a 1023 application and publication 557. The fee for filing depends on your predicted budget. Be as truthful as you possibly can be.
9- Contact your state or county department of revenue to file for state and local tax exemption.
10- Be aware of charitable solicitation law requirements in your area. Do not fall foul of the law, especially early on in your organizations life. Contact the Department of Revenue for more information.
11- Apply for a Nonprofit mailing permit through the US Postal Service. Ask for Publication 417, Nonprofit standard mail eligibility.
Do things by the book! Regulations are stringent for obvious reasons so be prepared to be scrutinized!