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:
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.
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:
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.
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:
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.
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:
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.
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:
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.
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:
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!
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:
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!
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:
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.
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:
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.
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:
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.
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:
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:
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