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11 Must-Dos for Starting a Nonprofit

11 Must-Dos for Starting a Nonprofit

There’s a lot that goes into starting a nonprofit.  Here’s 11 things to consider…because 10 is never enough!

1. Define Your Nonprofit's Purpose
2. Define Your Programs
3. Understand That You Don't Own This
4. Choose Your Nonprofit's Structure

We won’t go into a lot of detail here on this, because we have covered this topic extensively elsewhere (see links).  Suffice it to say that if you’re starting a 501(c)(3) charitable organization, we will almost assuredly choose between a public charity, a private foundation, or a private operating foundation.  Each has its distinct requirements and reasons for why it may be the right choice for you.

5. Establish Your Board of Directors
6. Conflict of Interest
7. Fundraising
8. Employee Compensation
9. Recordkeeping
10. Compliance Filings

Every year, all 501(c)(3) organizations are required to file some version of IRS Form 990.  Again, we’ve covered Form 990 exhaustively, but it is essential to understand what’s required.  Failure to annually file a Form 990 in a timely annual fashion can result in significant fines. Failure to file a Form 990 for three consecutive years results in an automatic revocation of 501(c)(3) status.

Managing state fundraising requirements can be complicated, too. The vast majority of states require nonprofits to register to solicit donations with that state’s Division of Charities prior to soliciting.  Nonprofits fundraising in multiple states must also register in each of those states, and renew that registration on an annual basis.

11. Who's Going to Help You Do All This?

Starting and operating a nonprofit is complicated.  You need a third-party professional you can trust to help you navigate the complex rules and regulations standing between you and your success.

Having successfully guided thousands of nonprofits through the 501(c)(3) process, we’ve learned a thing or two about what works…and what doesn’t.  Starting and operating a nonprofit is all about tax compliance.  You need a firm who can actually provide tax counsel and help you avoid the pitfalls.  Not only are we licensed to represent your case before the IRS, we’re legally obligated to provide you with the best, most accurate tax counsel for your particular situation.

Conclusion

As I stated in the introduction, there’s a lot to consider before starting a nonprofit.  In fact, this article is excerpted and abbreviated from our eBook, “10 Things You Need to Know Before Starting a Nonprofit“, which has over 10,000 downloads to date.

You can be successful in launching a new nonprofit.  Knowing what goes into it before you do will determine the degree of your success, or lack thereof.

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Greg McRay, EA

Greg McRay is the founder and CEO of The Foundation Group. He is registered with the IRS as an Enrolled Agent and specializes in 501(c)(3) and other tax exemption issues.

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