Although founding and running a nonprofit organization is an endlessly rewarding endeavor, it is certainly not without its fair share of frustrating complexities. This is especially the case during the initial planning stages as well as all the subsequent steps leading up to officially filing for tax-exempt status. If you are interested in giving back to your community in a substantial way, the five steps that follow will allow you to do so through the creation of a sound and properly organized nonprofit organization.
Advance Planning: Drafting Your Business Plan and Mission Statement
The decision to found a nonprofit is not to be taken lightly, so make sure you have evaluated whether or not a nonprofit organization is the ideal vehicle for pursuing your goals. Once you are certain that a nonprofit is indeed the ideal course of action, it is time to turn your attention to drafting a business plan and mission statement clearly outlining what it is your organization intends to achieve and how it will go about doing so.
Critical Paperwork: Establishing Governance and the Process of Incorporation
Due to the abundance of paperwork involved, the process of incorporation is often a lengthy one. Of course, establishing governance and putting a formal structure in place ensures your organization is founded with the credibility it will ultimately require to accomplish the goals and objectives associated with its mission. The incorporation process also limits the liability the directors and officers of the organization are exposed to while also laying the foundation necessary for attaining federal tax-exempt status.
Ensuring Brand Identification
Every organization benefits from the use of effective branding strategies, and nonprofit organizations certainly fall into this category. During your nonprofit’s early stages, make sure you consider the importance of branding and brand identification as you file the necessary paperwork involved in the incorporation process and in filing for status as a tax-exempt organization. This is often overlooked during the founding process, so take great care to consider the role of branding in ensuring the short- and long-term success your organization will ultimately be able to achieve.
Legal Accountability: Recruiting the Board of Directors and Establishing Nonprofit Bylaws
Recruiting the ideal board of directors is necessary to ensure your organization is always focused on achieving the core goals and objectives associated with its mission. The board must recognize the deep commitment required to carry out the organization’s mission over a lengthy period of time, not to mention the role they will play in establishing the bylaws governing the manner in which the nonprofit will operate as it continues to evolve over time. The nonprofit’s bylaws are also necessary for filing your Articles of Incorporation during the process of securing tax-exempt status.
Selecting the Ideal Legal Structure and Filing for Tax Exempt Status
There are several legal structures available to you when founding your nonprofit organization, and the process of selecting the ideal structure should always include consultation with a legal expert as well as an accountant specializing in this particular field. With the ideal legal structure in place — assuming, of course, that your organization is indeed eligible for tax exempt status — you can file for status as a 501(c)3, thereby allowing you to turn your attention to carrying out the goals and objectives associated with your organization’s mission.