A few months ago, I began the grueling task of starting a nonprofit organization. Seems pretty simple. You think of a name, a mission, a vision and then file the necessary paperwork. During this time, you might be searching for a location, if you are opening your nonprofit outside of your home. That's a whole new set of headaches. While I am not trying to deter anyone from following their goals and dreams of starting a nonprofit, I just want to help others with the reality of it all.
First, you will cry, and probably cry a lot. But, if you stay diligent and organized, you'll get through every mountain. Below are my suggestions to save you a boat load of headaches.
Hire an attorney. An attorney, while somewhat pricey, is worth every penny when it comes to structuring your nonprofit with all the state and federal entities. Trust me, you don't want to go at this alone.
Bylaws. You'll need the bylaws to operate your nonprofit. The attorney will need them to file the paperwork. Simply do a web search of similar nonprofits and view their bylaws as an example. I'd save the money and craft your own, especially since you can find virtually everything on the web.
Organize a Board of Directors. You never "own" a nonprofit, but rather it is governed by a Board of Directors. Choose wisely as these will be the people that create the bylaws and rules and regulations for your nonprofit. Do this sooner rather than later because you will need to conduct your first board meeting before you can open up a bank account. Remember, boards are made up of people who will have varying opinions, choose your board members wisely.
Policies and Procedures. You'll need a policy and procedure for just about everything. Fire safety, emergencies, volunteer services and so on. This is super critical and the board will need to sign off and/or create the policies. Be sure to check with state and local entities to ensure you are following all standards and codes.
Where will you do business? You will operate somewhere, right? You'll need to check zoning laws for your city or town. More than likely you will need to appear before the city council meeting to get zoning the building for operating under a nonprofit status approved.
Tax Accountant. Yes, you will need one of those!!! You can't operate with a profit but that doesn't remove you from the obligatory tax filing. A tax accountant will ensure that you remain in good standing with the IRS.
Record Keeping. You must, and I can't stress this enough, keep impeccable records. Money coming in and money going out, every donation, every purchase, every gift received must be recorded. You can use a notebook system, online spreadsheet or purchase a donation log book. PS. You will need a record keeping policy!!
Trust me when I say you do not want to skip a step or go into this half-baked. The harder you work up front, the easier it will be when you open your doors. Always check with state and local officials. Don't operate under assumptions. For example, on opening day, if you want to serve food, there are a million and a half rules and regulations, along with permits required before you can do so. I hope this helps get you started, feel free to drop me a note if you have questions.
All my fellow nonprofiteers, what steps have you taken? Stay tuned, in a few weeks, I will have a digital download of policy and procedures that I can share with you.
Author Stacey Kranz, Chairman of the Board, Path of the Living Word Church and Stakeholder and President of Josy Group Corp