If you have a real passion for a cause – maybe it is something for animals, climate change, the elderly, or your local environment – it might just be time for you to consider starting a not for profit organization. The key is always going to be raising more money than you spend, so making sure you have an amazing business plan is essential.
There are a couple of things that you need to think about before you dive into it.
One of the very first things that you will need to do is check that there is not already a non-profit with a similar program in your region. When it comes to charities and not for profit it is really important that you consider the efficiency of the business. And you can’t have an efficient business if there are two competing for the same funding – for the same reason.
Everything will come down to your funding. Most non-profits will collect fees for services of some kind, the many will rely mostly on funds raised from private owners, government grants, and/or foundations too.
Founders of any non-profit should really consider fundraising as their principal obligations to the people that they serve. And something that most non-profits will run into is a lack of a track record, as the fundraising can be tough. It is often the case that any funders will want to see some documentation and records about how the non-profit is meeting at its goals.
And without that data you have to have an exceptional business plan. It helps if you are transparent with your goals and your passion too.
People need to believe in the cause.
Salaries in non-profit organizations can vary massively. Most non-profit heads oversee huge organizations, and that means the salaries can be quite substantial. The average salary for a non-profit CEO was nearly $320,000. Although some do choose not to take a salary, or take a very reduced salary because passion overrides profits personally.
Something you will have to remember is that the difference between a for-profit and a non-profit is that non-profits have to have the tax forms on the public record. Most small and privately held businesses can keep the operating details under wraps, but anyone can access a non-profits tax form. This form is typically known as a Form 990.
So you’ll have to be incredibly comfortable with people knowing how much you make, and how much your business is making too.
Just like every other organization, you are going to have to have all of your paperwork in order. Your organization would need to be recognized as a non-profit by the IRS and conform to all of the state laws it can help if you have a legal team or legal advisor that you can contact to make sure that you get all of this correctly done.
You must register with the state to legally do business as a non-profit operation. Still need to create articles of incorporation for that.
You need to then apply to the IRS for non-profit status. This is very important. You will also need to be able to register to raise the money you’ll need to obtain forms from the attorney general, the secretary of state or any other appropriate agency; and this will enable you to register as a charitable solicitor in most states.
And to qualify as a non-profit you’re going to have to have a board of community stakeholders. The board should not consist of personal friends or people who the charity conducts business with, so you have to really consider who comes through that door.
And finally, your bylaws are going to be one of the most important things that you have. These will describe your non-profits operating procedures. Standard forms are typically available from the Secretary of State corporations office. Although it might be better to hire a CPA attorney to help manage all of this paperwork.
But once you have handled all of the basics. You’ll know for sure that you’re making a huge difference in the lives of others, and seeing your passion through to fruition.