What You Should Know to Start a Non-Profit
Whether you’ve been in a commercial industry for a while and are looking for something new, or are just following through on an idea, starting a non-profit could be on your mind.
It sounds simple from the get-go: pick a cause, think about how you’d like to support it and get started. But, there’s more that you should know. In fact, in many ways, starting a non-profit is similar to starting a regular business in that there are steps that must be taken from the start. Consider the items below if you’re interested in starting a non-profit.
Do Your Research
Just like any other business, if you’re starting a non-profit, there’s a certain amount of research to do up front. A few questions to consider include:
- What are you hoping to accomplish?
- Who are your target team members?
- Who is your audience?
- What resources are necessary to accomplish your goals?
- What’s your timeline?
By answering these questions, you’ll be able to put together a mission and vision for your non-profit, along with a detailed business plan (remember, non-profits are still businesses). These documents are necessary to file your federal Form 1023, which grants tax-exempt status and allows for fundraising.
You’ll need initial startup costs to get started. These should be detailed in your business plan and could include:
- Costs for Infrastructure development
- Office rental space or purchase
- Technology (tools to accomplish your goals)
- Licenses, certifications, permits
- Monthly costs (utilities, etc.)
Incorporate Your Non-Profit Business
To obtain a 501(c)(3), which establishes tax-exempt status, the following steps are necessary:
- Picking a unique name. Run a search to ensure you are not infringing on existing businesses or non-profits.
- Recruit your Board of Directors.
- Draft By-Laws which will determine how your non-profit will run. Consider it an operations manual.
- Decide on your structure. These effect how your business is viewed by the government and include non-profit corporation, b-corporation, non-profit LLC and more.
- File the articles of incorporation necessary based on your structure. To do this, you’ll need to provide your organization’s purpose, the names of board members, the names of your incorporator and agent and your Federal Employer Identification Number (EIN).
- To obtain your EIN, you will need to file IRS Form SS_4. The EIN is required for all tax documents, bank accounts and new hires.
Hire an Attorney
An experienced business law attorney, like Michael Hynum of Hynum Law can ensure that your non-profit is off to the right start.
Research business law attorneys in your area and set up a few consultations. Ask questions, find out if they have the experience necessary to help protect your new non-profit. Make sure you feel comfortable and that your new attorney understands the vision you have for your non-profit.
If you’re serious about starting a non-profit, the value of an experienced attorney cannot be understated. Hynum Law is available to answer any questions you may have. If you’re ready to get started, we’re ready to work with you. Contact us today to get started.