Here at Cause Machine, we are all about taking a bold vision and amplifying its message far and wide, and one of the best ways to do that is to start a nonprofit.
Nonprofits are important actors in society, helping motivated people of all kinds serve their communities, further causes they believe in, and generally make the world a better place. As a one-stop shop for building and growing a digital presence, Cause Machine can guide organizations into a custom website platform, customer engagement strategy, email marketing, and much more.
We offer a powerful, all-in-one tool to put people power into motion, and ultimately achieve big goals – but that comes after the nonprofit is up and running. Starting a nonprofit is a serious endeavor, and today we’ll walk through some strategies to do it right.
Before getting too far into actually starting a nonprofit, you should first make sure this is the right call. There are many benefits to doing so – the organization’s nonprofit status allows you to solicit tax-exempt donations to achieve broad goals and apply for grants. Plus, nonprofits don’t have to pay corporate taxes, helping put the money raised to good use.
But, there are monetary, compliance, and time commitments that need to be met. Starting a nonprofit will also mean ongoing IRS scrutiny to maintain tax-exempt status, board meetings, keeping detailed records, and more.
You should make sure the cause behind your nonprofit idea is one you are truly passionate about – and that it will be something the world truly needs … and that your nonprofit could operate in an effective manner, better than any others which are already in the space.
Now that you’ve taken a hard look in the mirror, decide which kind of nonprofit is best for your mission. There are three common types, laid out below.
Starting a nonprofit generally costs between $2,500 and $5,000. That should cover registration fees and any legal costs associated with getting started. You can check with the National Council of Nonprofits to get an idea of all you’ll need to do – which we’ll also lay out next. All along, keep in mind those previous questions, like “Can I really commit myself?” “Are we meeting an unmet need?” and “How are we different?”
The next step in starting a nonprofit is getting its foundation set. You’ll need a name, mission, and purpose statements to guide the organization, and a board of directors to run it. Figure out the areas that need attention – financial, community organizing, etc. – and write out the skills that would best meet those needs. Then search for quality people to fill them. Do the same for any staff positions you might need in the future.
Now it’s time to make things official. By filing articles of incorporation, you ask to be recognized as a business by the state you wish to operate from. Get a federal employer identification number (EIN), and check with the IRS website to read about the process for your state.
At this point, you have a legal business, and it’s time to apply for the tax-exempt status that makes starting a nonprofit different from other organizations. How you do so will depend on the type of nonprofit you choose to start, but again, the IRS website can explain it all in detail. If you are setting up the common 501(c)(3), for example, fill out Form 1023 or Form 1023-EZ. For a 501(c)(4), it is Form 1024-A and Form 8976.
Despite how hard you’ve worked already, this is the tough part. Your nonprofit will be accountable for every action or non-action it takes, and you must keep thorough and detailed records of all financial transactions. You should create bylaws to lay out the division of responsibility on your board, and how you intend to avoid conflicts of interest. Follow those bylaws and document all of your nonprofit’s activities. State and federal authorities will be looking over every shoulder.
Remember, this may all seem like a huge barrier to starting a nonprofit, but in many ways that is intentional. A nonprofit should only be used to legitimately serve the public interest and the cause it was built for, and these rules and regulations are all intended to keep nonprofits running legally and ethically.
Once you get past those requirements, it’s on to changing the world. And that’s where Cause Machine can help. Schedule a free demo today to find out how.
Starting with a community engagement strategy is the secret to building a successful Nonprofit in the long term. Cause Machine helps organizations build the plan of engaging a community well and then begin mapping out the technology to help support that strategy. We’re certain that you’ll find some great resources and powerful tools in Cause Machine to better engage your community. Learn how it can work for you here.
Comments