You have an idea for a nonprofit organization, but don’t know where to start. Sit back, grab a cup of coffee, take a deep breath and read on.
Over the past seven years, I have met with soon-to-be founders who wanted to “pick my brain”. These meetings have been such an enjoyable time for me and have provided an opportunity to share my insight and experience on founding a nonprofit. As a nonprofit organization Founder, I understand the desire of individuals to change their world and the impending challenge of creating a new organization from scratch.
In 2002, I produced the first San Diego Women’s Film Festival along with my co-Founder, friends, colleagues and family. The event was such a success that we decided to apply for nonprofit status to create a charitable organization that would produce an annual film festival and offer year-round programs. We successfully produced six film festivals, operated 20 after school and summer youth film programs and hosted dozens of film screenings. Unfortunately we had to close our doors in 2009 due to funding cuts. I am so grateful for the experience and learned how to found, develop, and manage a nonprofit organization.
I figured it was time to share my success, challenges and failures with you. Over the next couple of weeks, I am going to blog about the very basics of developing your idea into a nonprofit organization.
You, the Founder.
Founders are charismatic and enthusiastic creatures who are passionate to change the world on a small or large scale. This passion can be carefully molded into a cause, providing the foundation for a nonprofit organization. Nonprofit organization founders are incredible individuals who find a cause they are very passionate about and find a way to help. Founders have a unique charisma that raptures those around them and inspires others to become involved in a cause.
Passion is the number one thing you need to start a nonprofit. Passion is more powerful than you can imagine. It is what keeps you up late at night working on your nonprofit, it is what drives you to reach out to people in the community and inspire them to help you, it is the backbone of your organization – because ultimately, you have nothing else, but your passion for an idea.
Unfortunately, this passion does not come with an instructional manual on how to found and operate a nonprofit organization. So, let’s dive into the basics of creating your nonprofit organization.
Do your homework. Are there other organizations offering the same programs and services that you are proposing to offer through your new nonprofit? Utilize Guide Star and the Attorney General’s website to research their databases of nonprofits.
- What other nonprofits are serving the same population of individuals that you are proposing to serve? In the same geographical area that you are proposing to serve?
- Who has a similar mission?
- How would your programs be different from the programs already offered in your community to the same individuals?
- How will you distinguish yourself from the other organizations to potential funders?
If you do find another nonprofit who is similar, don’t panic. You have a couple of opportunities. You can still start your own nonprofit, IF (and only IF), you can truly distinguish your organization’s mission, programs, and individuals served from the nonprofits that are already out there. Your second option is to partner with an established nonprofit. You can integrate your unique program ideas and techniques into their already existing and successful programs.
Nonprofit organizations have benefits such as being tax exempt and having the ability to issue tax deductible receipts to individuals, private foundations and corporations who donate money. In order to be tax exempt, a nonprofit must file paperwork to be a 501(c)3 nonprofit organization. There are two options to complete this paperwork.
1. A lawyer will cost you between $2,000 and $5,000 including fees
2. The Do-It-Yourself (DIY) option is you can complete and file the paperwork yourself which will just cost you the filing
fees (approximately $500-750)
If you are going to “do it yourself,” I would highly recommend Nolo’s “How to Form a Nonprofit Corporation in California with CD-Rom” by Anthony Mancuso. This manual guides you clearly through the process to apply for nonprofit status. The book includes a copy of each form that needs to be filed along with detailed instructions on how to fill out the forms. Also, it includes a very helpful CD-Rom with templates.
Here are the general steps to filing for nonprofit status:
- Obtain an Employee Identification Number
- File Form 1023 with your State department using your Employee Identification Number
- Write the Articles of Incorporation
- File the 501(c) Papers with the Federal government. In order to be able to complete these legal documents, you will need to draft and define:
a. Mission Statement
c. Board of Directors
d. Annual Budget