If you’re entrepreneurial-minded and are thinking about your own startup, consider whether setting up a non-profit is the best form of business organization. This may be a good way to get your business off the ground, particularly if you serve a community need that would allow you to qualify for this designation. If you want to learn more about launching a non-profit, this guide can help you lay the groundwork for a wonderful community-focused organization.
What Is a Non-Profit?
Non-profit organizations typically value their reputations and are known for making wise business choices. They’re seen as good financial risks, as non-profit leaders serving the community are typically more focused on integrity and service than on profit generation. Non-profit boards are also guided by certain requirements and are typically responsible for organizational oversight. They can also aid in decision-making processes around major projects that address specific community needs.
Non-profit organizations also tend to focus on a certain cause. For example, there are many non-profits that serve veterans in a number of different capacities, including the Wounded Warrior Project, the Gary Sinise Foundation, and the Fisher House Foundation, to name a few. So, if helping veterans is your passion, find ways to provide services to vets in your community that aren’t currently available.
Many of the pre-start-up efforts of establishing a nonprofit are similar to any type of incorporation, in which you choose your business structure, write your business and marketing plan, and think about your organizational functions. It will be a bit different for a nonprofit, however, as nonprofits have specific regulations around nonprofit governance, non-profit board establishment, and leadership requirements. Some requirements vary from one state to another.
After filing your articles of incorporation, you’ll need to apply for tax-exempt status, which can be a bit of a time-consuming process. Depending on your state of operation, you may also need to apply for a solicitation license that will allow you to hold fundraisers and take donations. The National Council of Non-Profits is a great resource for not just getting your organization up and running, but for maintaining compliance with the various rules and regulations that govern non-profits.
Other Startup Needs
Just like any business venture, you’ll need to think about where there is a need in your community you can fill. According to Donor Box, from there you’ll need to establish a location of operation, develop a comprehensive strategy of targeted outreach, and you may need employees, depending on the type of non-profit you’re running. In this instance, you’ll need to develop job descriptions, advertise, interview, hire, and train staffers.
Just like running a business, you’ll need to get the word out about your nonprofit. One inexpensive way to reach a wide audience is through Facebook ads. Designing ads is easy when you use a Facebook ads maker. You can make custom ads within minutes by working with a predesigned template and adapting it to your needs.
Keep in mind, not all non-profit funding is long-term, which means you need to continually plan ahead for financial needs. If you don’t secure new or continuing funding once a grant cycle comes to an end, you could jeopardize the fiscal health of your organization.
Non-profit organizations may qualify for certain types of loans, grants, and other community funds. LENDonate often engages leaders from nonprofits and their chairs or boards before they seek lending approval to help understand financial goals. This type of support can help both with the structuring of your organizational functions and your budgeting, particularly if you’re setting yourself up for grant writing and administration and ongoing support. According to Stanford Social Innovation Review, there are a number of funding models to choose from.
Things to Consider
Some people are under the mistaken impression that a non-profit is a big money-making venture that allows them to access “free cash.” Non-profit status and operation, in reality, are subject to strict oversight. There are many rules and regulations about how you operate, how you receive funds, and how you demonstrate community impact. It takes time to apply for grants and other monies, and even if you receive them, you’ll have to track stats and provide regular reports and updates to demonstrate how the money is being used.
Running a successful non-profit can be rewarding, both personally and professionally. Startup and operation require a few more steps than traditional businesses, but once you’re established and get into regular funding cycles, the sky’s the limit!
-Written by Brittany Fisher for Military Money Matters
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