Starting a charitable organization can either reward or pose challenges. It’s a challenging process that can be full of pitfalls. However, individuals passionate about the cause that drives them to start a nonprofit organization can navigate all phases of formation of a charitable organization. With dedication and direction, you can be sure to establish an entity that can be critical in transforming the world. Below is a guide to starting a successful charitable organization.
Compose the Mission and Vision Statement of Your Company
Nonprofit entities often turn to these statements for overall direction and function strategy needs. For example, the vision statement uses the efforts of a charitable organization to depict the world. It should be brief, not more than three sentence. It shows the extent the nonprofit entity will go if all it utilizes all its efforts successfully. Contrary, the mission statement comprises of a few short sentences that indicates how a nonprofit entity intends to direct its efforts. For example, a vision statement could read “Our organization will eradicate domestic violence in Dallas, Texas.” On the other hand, the mission statement could read “We shall provide shelter for victims of domestic violence and sensitize the need to stop the gender-based domestic violence.”
Select a Board of Directors
You will want to select board members that will commit and believe in the mission and vision of the entity. The board should comprise of directors who have experience in the world of nonprofit ventures. Alternatively, select board members with expertise in the market niche that you target. The board of directors provides the entity with invaluable advice and direction regarding its operations. You cannot understate the role of the board of directors towards the success of a nonprofit organization. The committee helps keep managers on track and aligned with the nonprofit’s mission. Moreover, board members may also aid a charitable organization in securing funds it needs to accomplish its mission. They also provide much of the expertise required to run a successful nonprofit organization. All you need is to select the right people and make them believe in your mission and vision statement.
Draft the Articles of Incorporation
Anyone that wants to start a charitable organization must draft the articles of incorporation and file them with the state authorities. You can work with a corporate attorney at this stage to help you navigate some of the legal complexities. Furthermore, an attorney will help you review and ensure that all your documents are appropriate before filing them. You could also invite the attorney to help you compose bylaws for your charitable organization. These are rules that govern the board of directors and direct the efforts of a nonprofit entity. Philanthropic organizations are heavily regulated by both the federal government and the states in which they operate. Regulatory agencies protect donors from fraud and ensure a nonprofit stick to its mission. It doesn’t mean an organization can’t get itself into troubles because it is a nonprofit entity.
Develop a Fundraising Plan
You might need to apply for grant funding to get all the necessary resources to start a nonprofit organization. Alternatively, one can seek financial partnership with well-established charitable ventures. For example, a large nonprofit organization can sponsor the startup of a new nonprofit entity. Fundraising is often a sophisticated and competitive endeavor. Fundraising is unavoidable for charitable organizations. However, don’t think all you need to raise funds for a nonprofit entity is to hold a fancy dinner or bake sale. A nonprofit organization may also need to work with a provider of accounts payable automation services to make it easier to track donor funds electronically without the need of scanning documents and making phone calls.
Apply for Tax Exemption
Nonprofit organizations can apply for 501 (c) status with the internal revenue service (IRS). Afterward, one can apply for a tax-deductible status with the IRS so that the nonprofit organization can receive donations from for-profit ventures. Next, a charitable organization can file for any municipal or state tax exemptions that it might be eligible for and comply with the Department of Revenue.
