Once you have done research and determined that a new nonprofit organization is necessary, then think like a reporter and ask these six basic questions:
WHO? Who will be involved?
Just as it takes “takes a village to raise a child,” it takes much more than a solo founder to keep a nonprofit alive. If the only people excited about this idea are the founder and his/her family members, then perhaps this is a good idea for a for-profit rather than a nonprofit. Having lots of people willing to help launch a nonprofit – as board members, volunteers, etc. – can signal broad community support. So look around to see who supports creating a new nonprofit.
WHAT? What do you need to do?
- Determine feasibility – Consider the economic climate and real facts
- Think ahead to normal evolution of a nonprofit
- Develop a detailed strategic plan with multiple parts including a mission, organizational structure, 3-year budget, fundraising plan, marketing plan, business plan, governance, and staffing.
WHEN? When should you file paperwork?
Generally speaking, you can think of the paperwork process as involved five phases:
- Phase I: Incorporating at the state level
- Phase II: Securing your tax exempt status from the federal government
- Phase III: Filling out your operational paperwork at the state and local levels
- Phase IV: Completing your internal paperwork
- Phase V: Ongoing reporting – to state entities (in your state and any other where you might solicit funding from), annual federal reporting, regular reporting to funders (both large foundations and individual donors)
WHERE? Where can you get QUALITY assistance?
For help filling out and filing the mountain of papers at the state and federal levels, make sure you turn to true experts, not just friends who are free. Your next door neighbor just won an award for her skills as a lawyer, yet being “Drug Prosecutor of the Year” doesn’t mean she knows anything about nonprofit law. Traditionally, law schools have not offered courses on nonprofit law, meaning most lawyers don’t have training unless they have chosen to specialize to some degree in this area of practice. Seek help from an attorney or accountant who has direct experience working with nonprofits. You may want to consider contacting your state bar association to see if they have a nonprofit specialty division.
HOW? How do you create and sustain a nonprofit organization?
This may be the most important question and the answer depends on your business plan. If the organization can achieve its mission in less than three years, it would likely be better as a program housed at an existing organization. If it will take longer than three years, you will need a long-term plan to ensure that the doors stay open, that you can pay your employees, and that you can reliably offer the services you are planning to offer. If a nonprofit is not sustainable, it can actually do more harm to the community than good.
WHY NOT other options? Why shouldn’t you create a nonprofit?
After considering these questions, ask yourself once again – is starting a new organization truly the right decision?