Starting a Nonprofit Organization Checklist: 10 Steps You Need to Take

Establishing a nonprofit organization is a great way to give back to your community and help those in need. Not to mention, it’s also a great method to preserve your family’s legacy. There are various types of nonprofit organizations, and which you choose is generally determined by the issue or cause you would like to address.

Starting your own nonprofit, though a rewarding endeavor, can be challenging due to the various steps involved. These also vary by state. However, this 10 step nonprofit organization checklist can serve as a basic guide to get you started.

starting a nonprofit organization checklist

10 Steps For Starting a Nonprofit Organization the Right Way

1. Determine the Need That Your Organization Will Meet

The most important step to developing your starting a nonprofit organization checklist is to determine why you wish to establish a nonprofit organization.

  • As with any business, you first need to determine the demand or problem as well as the market that your nonprofit will address in order to meet the demand.
  • The name that you select for your organization should also identify your organization’s mission and identity. This way, your market understands from your organization’s name what to expect.

2. Research

There is fierce competition for limited funds, via foundation grants and individual investors. So, the more detailed you are about the demographics, how their needs is unfulfilled, and how your nonprofit can fulfill that need, the more effective you will be at attracting funds. Therefore, you should conduct thorough research to make sure there’s a need for your service.

You should also research how many other organizations in your area are supplying the same service so you are not repeating the same work. This can also make it harder to obtain funding.

3. Assemble a Board of Directors

The experience of your founding board members is crucial for fulfilling various positions and legal obligations within your organization. Therefore, you need to choose wisely.

  • Your board should begin with at least 3 people that are well capable of fulfilling their duties.
  • Typically, you should expand it as your organization continues to mature.
  • You may also consider incorporating training, orientation, and evaluations etc. in order to ensure the stability of your organization.

4. Develop a Mission Statement

Another crucial component to developing your starting a nonprofit organization checklist is to create a mission statement.

Your mission statement makes known, in detail:

  • Your organization’s objectives;
  • What population it serves;
  • How it plans to achieve this goal.

This will serve as the base for every decision and action within your organization. It can also assist with developing your business plan.

5. Write a Business Plan

As part of your starting a nonprofit organization checklist, you will also need to develop a business plan.

  • A sound business plan further explains in detail how your organization plans to accomplish its goal. This provides an organized way to review and plan important operational issues.
  • It can also be used to outline new projects.
  • And, because it contains important financial details, such as the time and cost to start your nonprofit, how everyday activities will be managed, and how you will achieve future funding, it can also serve as proof of financial sustainability to funding providers that your organization is sustainable and worth investing in.
  • You will also need to demonstrate to funding providers that your organization is making a difference. Therefore, you need to determine how you will gauge and display your impact in your business plan.

6. Incorporate Your Nonprofit

Incorporating your nonprofit helps establish credibility for your organization as well as its programs and services. It also helps limit the liability of your organization’s board members.

Furthermore, the IRS requires certain organizing documents and procedures typically associated with corporations in order to grant specific tax deductions. Therefore, it is recommended that you incorporate your organization in order to take advantage of available tax benefits.

7. File for Federal Tax-Exempt Status

To be recognized as a tax-exempt organization by the IRS, your nonprofit must be established as a corporation, a trust, or an association. Therefore, your organization will need to submit a tax-exempt application in addition to appropriate corporate forms in order to gain recognition as a tax exempt organization.

In some cases, the IRS may also require tax returns in the state where your organization was incorporated. So, if your organization received income prior to becoming tax-exempt, you will need to submit your tax returns.

women in small office

8. Develop a Sustainable Fundraising Plan

After being awarded 501(C)(3) federal tax-exempt status, your organization will then be eligible to apply for foundation grants. Therefore, as part of your starting a nonprofit organization checklist, you will need to develop a sustainable fundraising plan to apply for foundation grants and establish ongoing funding.

9. Develop a Marketing Plan

A good marketing plan, which includes establishing a strong online presence, will help enlist volunteers and donors for your organization.

When forming your online presence, remember, it is important to include a nonprofit web design and campaign on social media that is professional so that it reinforces your credibility.

10. Ongoing Compliance

As part of your starting a nonprofit organization checklist, you also need to consider ongoing compliance as part of your organization’s sustainability.

To help ensure your organization remains in compliance, be sure to register with your state’s Attorney General or other agency that governs nonprofits and solicitations in your area. Also, if you plan to request donations in other states, be sure to register in those areas as well. Registration requirements vary from state to state.

Summing Up

There are various steps involved in starting a credible nonprofit organization; however, the benefits far outweigh the efforts. After all, wouldn’t it be nice to have your name attached to something so significant? In addition, having a sound starting a nonprofit organization checklist, such as this one, helps make it easier.

Once you have successfully started your nonprofit, be sure to share your experience on your Facebook, Twitter, or other social media page in order to help others on their journey. Or, if you already have inside experience with starting a nonprofit organization, please feel free to share your insight to help others give back to their community.

The images are from depositphotos.com.

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