Building an effective organizational structure to last takes determination and planning. Being fully prepared and understanding every aspect of nonprofit work goes a long way to easing the process.
If you’re driven by a mission to help others and improve your community, you belong in the nonprofit world. Individuals with passion and drive are particularly well-suited to succeed in nonprofit work, especially when they’re able to direct their own mission.
There are plenty of useful resources out there to get you started, but we’ve cut through the clutter to give you the basic framework. These 10 essential steps are key to not only starting but also growing your new nonprofit organization:
- Identify your new nonprofit’s mission.
- Build your nonprofit’s leadership team.
- Write your organization’s bylaws.
- Legally incorporate to start your nonprofit.
- Find local partners for your nonprofit.
- Secure initial funding to start your nonprofit.
- Apply for and receive 501(c)(3) status.
- Get started pursuing your mission.
- Build your nonprofit’s professional network.
- Plan for your organization’s growth.
As you read through these essential steps, remember that while some may be pursued in whatever order you see fit, others must follow this order. For instance, you must write your initial bylaws before applying for 501(c)(3) status. Even while the legal and logistical obligations of founding a nonprofit might feel overwhelming at times, it’s useful to think of the process in terms of actionable steps like this.
Starting a nonprofit organization is among the most admirable work an individual can do! You owe it to yourself and your mission to fully prepare. Follow these essential steps for building an organization that will last, grow, and benefit its community for years to come.
1. Identify your new nonprofit’s mission.
What first inspired you to start a nonprofit organization?
What issue or need do you see in your community that drives you to act? You already understand your motivations and the goals of your nonprofit’s work, but putting them into words and clearly communicating them to others can be more challenging that you might initially assume.
It’s important that you be able to distill your mission into a single statement, and then understand the purpose of this mission statement. A strong mission statement should accomplish all of the following:
- Clearly express the mission of your nonprofit
- Focus your organization’s work and relationships
- Guide your nonprofit’s growth and development
- Explain your purpose to constituents, donors, and funding bodies.
Remember, a mission statement doesn’t need to explain everything about your nonprofit and its work, but it does need to clearly evoke the essence of your drive and purpose. Here are some strong examples:
Taking the time to draft an effective mission statement before moving forward is a smart move. Establish a clear mission that defines your driving passion, the actions you’ll take, and the impact you’ll have. This will act as a guiding light as you work through all the steps for starting your nonprofit organization, and it’ll keep your vision focused on the bigger picture.
For some more guidance on this crucial first step, check out our tips and techniques for writing an effective nonprofit mission statement.
2. Build your nonprofit’s leadership team.
Next, build a strong team of leaders to help guide the creation of your nonprofit organization. You’re likely already part of a group that shares a vision and has decided to found a nonprofit together.
The founding participants of a nonprofit organization should include:
- Several members of a board of directors
- An executive director
- Other volunteers
Once your organization has gained its footing, you’ll be able to take on dedicated staff members, compensate your executive director, and create a more extensive leadership structure. In the meantime, it’s important to accept help wherever possible but also refrain from taking on too many individuals.
Nonprofit organizations operate on extremely slim budgets, especially when they’re young. This, combined with the inherent challenges of founding a nonprofit, means that you must remain focused on your mission and vision.
Nonprofit organizations tend to grow out of existing networks of individuals who are brought together by a common goal or interest. If you’re part of a group working together to found an organization, this is where you’ll find your founding board members, director, and volunteers.
If you’re driven by your own individual mission, you need to find partners who share it; creating a reliable leadership structure composed of passionate, committed individuals is the only way to ensure that your nonprofit’s operations and culture will be sustainable.
3. Write your organization’s bylaws.
Your mission statement will guide your organization’s goals; your bylaws will guide your organization’s operations. Your nonprofit’s bylaws are an extremely important founding document that will affect both its internal culture and functions.
Comprehensive bylaws to govern your operations are a central element of responsible nonprofit management, and they’re also required for receiving tax-exempt 501(c)(3) status!
Work with your nonprofit’s leadership team to draft a set of founding bylaws. They should directly address, but aren’t limited to, these topics and elements of how your organization will work:
- Clearly defined leadership and staff roles
- A formal mission statement
- Donation solicitation protocols
- Membership program and committee structures
- Policies for resolving conflicts of interest, setting compensation, etc.
- Procedures for amending the bylaws
- Explicitly defined financial reporting protocols
It’s important to draft and vote on a set of bylaws early in the process of starting your nonprofit for two reasons. It’s a required part of the federal 501(c)(3) application, but it also sets a strong precedent.
Organized procedures and clearly defined roles are absolutely essential to the success of your nonprofit organization, and your bylaws will ensure that every founding member holds him- or herself accountable and committed to the organization’s continued health.
4. Legally incorporate to start your nonprofit.
In addition to your founding bylaws, there’s another important document that you’ll need to draft before moving on with starting your nonprofit: your official charter.
Officially incorporating your nonprofit is required for eventually receiving 501(c)(3) tax-exempt status, accepting donations, and essentially functioning as a legal nonprofit organization.
Sounds intimidating, but creating and filing nonprofit articles of incorporation is actually one of the easiest steps in the entire process. Do some quick research on your state’s nonprofit laws, then simply complete the incorporation document with the following information:
- The legal name of your organization
- The official location of its operations
- The names and addresses of all initial trustees, or board members
Each official board member identified in your bylaws then needs to sign the articles of incorporation. Submit this document to your state’s secretary of state office, and you’ve legally incorporated your nonprofit organization!
Of course, this process varies slightly state-by-state, so do your research before starting.
Check out this handy template from the IRS that can guide your team as you draft your own founding charter for more specific guidance.
5. Find local partners for your organization.
Next, identify some local partners in your community who can help support your launch.
At this point in the nonprofit startup process, deliberately cultivating a local network of partners is helpful because it builds momentum and keeps everyone excited.
The next two steps can be quite time-consuming or frustrating if you’re new to them, so having some buzz in the community is a smart way to maintain engagement.
Your community partners will be essential once you actually start reaching out to constituents and donors, too! It can be very difficult to immediately begin engaging new stakeholders without already having a shared connection. Think about the local partners who might be interested and useful to your mission, like:
- Local businesses of any size
- Schools and local universities or colleges
- Other nonprofit organizations
- Local municipal offices or agencies
Remember, you’re founding a nonprofit organization to better your community and address particular problems. Your founding leadership is likely already well-connected, but expanding your local network is always a smart move. The right connections will unlock new donor bases, marketing outlets, and opportunities to directly pursue your mission.
One great idea might be to set up a simple matching gift or volunteer grant program with a sympathetic local business!
6. Secure initial funding to start your nonprofit.
Nonprofit grant writing can be a major challenge. This is particularly true in the earliest days of your organization.
However, finding and applying for nonprofit startup grants is also extremely important! Without some initial funding, it can be difficult to reach and engage the donors who will support your work in the future.
Start by researching the different sources and types of nonprofit startup grants.
Next, familiarize your team with the grant writing process. If most or all members of your team are new to grant writing, doing some research beforehand will go a long way to boost your chances of success. Put generally, the steps of grant writing are:
- Understand your goals.
- Identify grant opportunities and research the sources.
- Build a grant writing team.
- Get started on the proposal, refining your strategy as you go.
- Build a strong case for support.
- Review and submit.
This is an extremely minimal version of the grant writing process, but there are plenty of resources out there that can give you a much fuller understanding of how to write a winning grant proposal.
Securing some initial funding early on is the best way for your nonprofit to get started pursuing its mission. Continue researching and applying for startup grant funds as you work on the next step, too!
7. Apply for and receive 501(c)(3) status.
When imagining starting a nonprofit, this is the step that most people immediately think of, and for good reason.
The federal 501(c)(3) application process is extremely important for any nonprofit. It can be time-consuming and requires a great deal of organization, but it’s not nearly as intimidating as many believe.
The most important tasks associated with applying for 501(c)(3) tax-exempt status include:
- Filing articles of incorporation with your state.
- Receiving an IRS employer identification number.
- Preparing your bylaws, leadership structures, and initial programming.
- Completing the lengthy IRS form 1023.
- Researching and complying with any separate state-level requirements.
For a more thorough explanation, be sure to read our guide to the 501(c)(3) application process.
Even once you complete the application for nonprofit tax exemption, your organization might not officially receive 501(c)(3) status for quite some time. There are policies in place that address nonprofits in this situation, so go ahead and get started engaging constituents and raising funds.
8. Get started pursuing your mission.
While you wait to receive 501(c)(3) tax-exempt status, begin pursuing your mission!
You’ve been excited to get started working towards bettering your community, and now all the official startup processes are out of the way. If you’ve already worked on identifying some local partners who can give you a foothold in the community, start to leverage those relationships.
You might begin reaching out to donors and engaging constituents in all kinds of ways:
- Organize an event with a community partner. Maybe an established local nonprofit also focused on improving the community would be willing to help you host and promote a kick-off event. This is a great chance to meet new donors, hear from your neighbors and civic leaders, and promote your first projects.
- Consider exactly how you’ll collect donations. In the digital age it’s important for nonprofits to accept both in-person and online donations in various ways. For example. a newly-founded church or religious organization should pick an online tithing tool.
- Start to market your nonprofit to donors and constituents. Set up social media pages for your nonprofit and begin building an audience. Ask followers to share your content, and be sure to invite everyone to your fundraising events. Collect some contact information and start an email campaign.
One of your overarching goals at this early point in your nonprofit organization’s life should be to build relationships. Developing and nurturing initial relationships with donors and partners will form a strong bed of support from which you can grow.
9. Build your nonprofit’s professional network.
As your nonprofit gets to work pursuing its mission, you and your team will discover the immense value of developing an extensive professional network.
Important groups or individuals to connect with might include:
- Other nonprofits in your area of any size or mission
- Nonprofits in the wider region with missions similar to yours
- Media or digital outlets, like blogs, that focus on nonprofits
- Other media outlets related to your mission
- Networks or associations that work in your field
Building a professional network for your nonprofit can have some major benefits early on, particularly because others who believe in your mission will be happy to promote your work to their own audiences.
10. Plan for your organization’s growth.
You’ve put in plenty of hard work to get your new nonprofit organization up and running! That’s a real testament to your own passion and the value of your mission.
Now’s the time to plan ahead and invest in your nonprofit’s growth. Having smart development plans in place will greatly reduce any growing pains or internal friction as your hard work starts to pay off.
In addition to building scalable methods into your structures from the very beginning, go ahead and identify some tools that you’ll need in the future, like:
- An adaptable CRM or database system
- New digital donation tools and platforms
- Automated marketing systems
- Volunteer and member management tools
Looking at these tools might seem intimidating at first. You’re still a new organization and would probably prefer to focus your budget on your mission rather than software solutions. The good news is that many of these tools have free, or close to free, options perfect for a starting nonprofit.
These nearly free software are often ideal for new, smaller organizations, and have potential upgrades available for your organization as it grows. But free to inexpensive software can be tricky! Sometimes it’s true when they say, “You get what you pay for.” Explore all your options and do extensive research to make smart decisions.
Conducting extra research about these tools will pay off in the end. It is important to decide whether free software will benefit long-term or if your organization is better off with a more expensive, but durable, software.
Consider how your staffing and leadership strategies will adapt to growth, as well. Have some plans in place for officially growing your board, instituting membership programs, and creating new staff positions.
Planning for your nonprofit’s successful future is the best way to invest in its stability and healthy growth!
No one works in the nonprofit world because it’s easy. Nonprofit organizations are founded for just one reason: to better the world and the communities that make it up.
If you’ve made the admirable decision to start your own nonprofit, familiarize yourself with the entire process and be prepared to learn as you go! Always be on the lookout for useful resources that can provide you with new insights and resources, like these:
- Snowball’s guide to online donation platforms. Choosing and managing a digital platform for collecting donations is essential for modern nonprofits.
- Top Nonprofit Social Media Tools from Salsa. Social media is the best way for new organizations to start marketing their work. Check out these top tools!
- 33 Innovative School Fundraising Ideas by Snowball. Learn some unique fundraising strategies perfect for new nonprofits with educational missions.
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