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How to Start a Nonprofit: The Simplified Guide

Updated: Jun 3, 2022

What does it take to start a nonprofit? Launching and sustaining a nonprofit organization requires more than a mission and a dream. It also requires getting the word out to the world, which entails a solid and well-executed marketing and PR strategy.

That said, 501(c) nonprofit status confers a lot of benefits, but it also involves a lot of red tape. If you're researching how to start a nonprofit and your head is spinning, PosterGirl Marketing, PR & Media would like to share these step-by-step resources for launching a nonprofit organization.

Forming your nonprofit organization

  • Nonprofit corporations are a/an increasingly popular legal structure for many organizations.

  • Nonprofit corporations are further classified as a public benefit, mutual benefit, or religious corporations. Most charitable organizations are formed as nonprofit public benefit corporations.

  • Structuring your organization as a nonprofit corporation doesn't automatically confer tax-exempt status. For that, you'll need to apply for 501(c) status by submitting Form 1023 to the IRS. 501(c)(3) status is used for charitable organizations and private foundations, but that's only one type of 501(c) organization.

  • After receiving a 501(c) determination, organizations may apply for state tax exemption. States without federal 501(c) status may file Form 3500 for state tax exemption.

  • To help keep things in order, set aside dedicated office space in your home where you can work. If some renovations are required to provide the space you need, good news: certain home improvements also improve your home’s appraisal value as well!

Alternatives to the nonprofit corporation

Before doing the hard work of forming a 501(c) nonprofit organization, make sure nonprofit status is right for you. Depending on your goals, one of these alternatives may be a better fit.

  • Hybrid business models that pair for-profit ventures with a social purpose are increasingly popular. Harvard Law School notes that the most well-known of these is the benefit corporation.

  • Low-profit limited liability companies, or L3Cs, are another blended model. Unfortunately, L3C status isn't available in all states.

  • Nonprofit Quarterly explains that fiscal sponsorship is another alternative to forming a nonprofit organization. Fiscal sponsorship allows a project to be housed under an existing nonprofit corporation.

Maintaining your nonprofit status

Creating your nonprofit organization is only the first step. Nonprofit organizations also have to meet management and reporting requirements to maintain legal compliance.

  • Every nonprofit needs a board of directors. Founding board members are responsible for assigning the number of directors, term lengths, and a meeting schedule. Nonprofit board members should understand their duties, responsibilities, and roles on the board of directors.

  • Basically, bylaws are a nonprofit's rulebook. Bylaws include detailed information on a nonprofit's purpose, governance, and recordkeeping and reporting requirements. They also include provisions for compensation, conflicts of interest, and future amendments of the bylaws.

  • Keeping up with annual filing requirements is among a nonprofit's most important responsibilities. Tax-exempt organizations must file an annual report known as Form 990 with the IRS.

  • States have their own annual filing requirements and can depend on the type of nonprofit, its gross receipts, and other factors.

Starting and sustaining a nonprofit organization is hard work, but you don’t have to do it alone. Whether you’re seeking assistance with business and organizational planning, the tips above will help you work through the process and achieve your goals the right way.

PosterGirl Marketing, PR & Media is your one-stop solution for all your sales, marketing, public relations, and business branding needs. Contact us today and let’s team up! +1 347.786.7998


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