Non-profits are a great way of addressing certain needs within a community, and as such, are a popular type of organization to form. While starting a non-profit is similar in many ways to incorporating a business, there are some important processes to follow in order to obtain tax-exempt status, and having the help of a company experienced in such procedures, can help you achieve your non-profit status far quicker, and with less hitches and holdups.
If you’re looking for a general guide as to how you can start a non-profit in the U.S. before you seek professional help, however, you should find the following information useful:
Tailor an engaging, meaningful Mission Statement
Putting your vision for a thriving non-profit into writing is the first step in the process, and its importance should not be underestimated. The statement should provide an overview of the work you do and the reasons behind it, and be written in concise, memorable form.
Come up with a business plan
Your non-profit will need a sound business plan, just as a small business would, and it should almost certainly include a definition of the problem your non-profit aims to address, along with evidence of the size of the problem and how your organization plans to address it. With so much competition for donations, you’ll need to be able to show potential donors (including individuals and foundations offering grants) how their money will help solve the problem you’ve identified, and how necessary it is.
Research other organizations that may already be offering a similar service to yours, and try to identify a clear need for the work you want to carry out.
Incorporate in your state
The next step once you’ve written a strong Mission Statement and created a robust business plan, is to incorporate the organization, and this can be done by following the steps listed below:
Select a name – make sure that your proposed name isn’t already registered by another organization, and that it follows state laws.
Register the name – you’ll most likely be required to register with your Secretary of State’s office, and for a list of state websites to begin the registration process, you can refer to the list provided by The National Council of Non-profits.
File articles of incorporation – next, you’ll need to file Articles of Incorporation with the relevant state, detailing the main rules on how you will govern your non-profit. Depending on the state your non-profit will be registered in, you may also be asked to file the following:
- A Certificate of Disclosure
- Proof of corporate name
- Filing fees
For more detailed guidance on any of the steps listed above, consult with an experienced entity management firm.
Apply for tax-exempt status
Lastly, the relevant paperwork will need to be filed with the IRS in order to receive tax-exempt status, and once approved, there may be additional paperwork required by local and state governments before you’re able to function as a tax-exempt organization.
It can be helpful at this stage to consult with a professional tax consultant or entity management firm to ensure that you’re compliant with all the necessary regulations.
There’s no doubt that non-profits can make a significant impact within a community, and in some cases, on a global scale, but it does take a lot of work and patience to get the process right and achieve your tax-exempt status.