There are more than 10 million nonprofits and non-governmental organizations worldwide. And, with 73 being the median number of grants awarded by foundations, starting your own non-profit can be a great way to support a worthy cause. However, what many don’t realize is the amount of work that goes into such an endeavor. Whether you’re looking into whether starting a nonprofit is right for you or you’re already set on the idea, here are just a few things that you should take into consideration.
The value in thinking ahead
When looking into starting your own nonprofit organization, it can be extremely valuable to conduct a needs analysis, which will give you insight as to whether or not there are any organizations already established that are doing the same thing. While this will allow you to assess whether or not your nonprofit idea will bring anything new to the table, this is also the ideal time to consider alternatives. If you already own a business, alternatives to starting a nonprofit can include starting a charity campaign, which will allow you to donate to an existing program. However, volunteering, or even partnering with an existing organization are also worthy considerations.
For those who choose to continue starting a nonprofit, establishing your mission statement and recruiting a board are two essential first steps, which will aid in laying a foundation for success later on. With a mission statement showcasing what your organization will be all about, establishing a board of trusted individuals (also known as directors or trustees) will be invaluable as well. These individuals will aid greatly in overseeing activities and will help execute endeavors (like managing everyday operations, etc.) that will make your mission possible.
The cost — and paperwork — involved
After conducting a needs analysis and putting together the foundation of your nonprofit, it’s important to realize that there will be paperwork (and fees) involved in order to ensure that your organization is both tax-exempt and officially established as a nonprofit.While getting incorporated in the state you’ll operate in is essential, the details involved regarding what forms and fees are needed vary from state to state, so reaching out to your Secretary of State’s office can aid in finding out the specifics. On the other hand, filing for 501c3 tax exempt status, however, can usually be done with one of two forms (depending on your situation, of course) — the 1023EZ or 1023 forms, which will involve their own fees as well.
Investing in the right insurance
In addition to the legal paperwork involved with starting your own nonprofit, investing in the right insurance is also essential in ensuring you’re properly protected. General liability insurance, for example, will insure your organization for damages that it’s ordered to pay someone in the event of an injury on the property. If your nonprofit is working from a physical location, property insurance may also be needed to protect against events like fire, vandalism, etc. For nonprofits with employees, workers compensation insurance will help cover factors like lost wages, medical expenses, and legal protection when people get hurt on the job, like in the event of slips, trips, and falls. Regarding workers compensation insurance, Cerity notes that month-to-month pricing, affordable rates, and simple policies can be great for small businesses who are looking for flexibility in addition to quality coverage.
For those looking to start their own nonprofit organization, it’s important to realize the many steps involved with such an endeavor. From conducting a needs analysis to investing in the right insurance and getting the proper paperwork filed, each step aids in laying the foundation for success.
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