How To Start A Nonprofit Company

How To Start A Nonprofit Company

The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.

Interactive Training
Learn more about the benefits, limitations and expectations of tax-exempt organizations by attending 10 courses at the online Small to Mid-Size Tax Exempt Organization Workshop.

IRS Exempt Organizations offers specialized education programs to help exempt organizations understand their tax responsibilities.

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Tax-Exempt Purposes
A sensible starting point for finding nonprofit business ideas is the list of charitable purposes required by the IRS for tax-exempt status. Your nonprofit business may receive tax-exempt status if it’s organized for any of the following purposes: charitable purposes; prevention of cruelty to children or animals; literary, scientific or educational purposes; public safety testing; and amateur sports competition. Within those arenas are countless ideas for a nonprofit business. You might choose to start a nonprofit publishing business for new authors, for example, or a Saturday youth academy to spark interest in science and math. Your nonprofit business could raise funds to sponsor amateur sports teams that can’t afford to travel to competitions; a nonprofit thrift store could support local no-kill animal shelters.

Personal Interests
Often, the best idea for a nonprofit business is a cause that interests you. A business that renovates homes for the newly disabled, for example, might be a constructive use of your construction or carpentry skills. Or, you can combine your interests in youth and your community with a graffiti-removal business that mentors youth while providing them with a way to make a difference in their neighborhoods. Your fundraising knowledge can help you operate a fundraising business that sponsors special events such as charity auctions or walkathons. A retired teacher can open a no-cost or low-cost teacher supply store in her school district and stock the shelves with donated items.

Community Needs
Viable nonprofit business ideas can come from need that’s specific to your community. Address high unemployment rates with a business that helps people develop job-searching skills, for example. Narrow your focus even more and start a nonprofit business that works with people reentering the community from prison. Start a youth center in your rural community to provide recreation and intervention. Your nonprofit business can focus on high levels of obesity with nutrition and fitness programs tailored for churches or community centers. If specialized transportation is lacking in your community, apply for federal grants and open a transportation business for seniors and the disabled.

Existing Programs
National nonprofit initiatives may operate like nonprofit business franchises. These programs provide the entire package — name, marketing, materials and technical assistance — for you to get started. Contact YouthBuild USA and join the social entrepreneurs who launch new YouthBuild programs across the country. YouthBuild focuses on youth development and community development through building houses and providing education and mentoring to young people. The national HandsOn Network can help you implement a HandsOn Action Center in your city and start matching volunteers with organizations that need help.

Types of Non Profits
A nonprofit is a type of business structure where the profits of the business are not distributed among the owners and shareholders. In fact, not-for-profit businesses are not allowed to create stocks, though they can invest in other stocks as a source of income. Often these organizations are created for charitable purposes.

The IRS classifies several different kinds of nonprofit business structures, some of which may be tax-exempt, depending on the nature and purpose of the organization. Each is listed as a subcategory under Section 501(c) of the Internal Revenue Code, and each has its own requirements and regulations, limitations, and tax implications, as well as the ability to apply for tax exemption. Here are some major types of nonprofits:

501(c)(3) – Charitable Organizations. The most common nonprofit is a charity, and refers to an organization that operates to fulfill any of the following purposes: religion, education, science, literature, public safety testing, amateur sports, and the prevention of cruelty to children or animals. Common types of charitable organizations—which the IRS uses in its generally accepted legal sense—include food banks, museums, theatre groups, colleges, low-income housing organizations, and day care centers. Both public and private charities are usually prohibited from or limited in engaging in lobbying activities. As charities, 501(c)(3) organizations can apply for tax-exemption for all income related to the business or mission. You can find a complete list of all 28 types of 501(c) corporations through the IRS.

501(c)(4) – Civic League, Social Welfare Organization, or Local Employee Association. These types of nonprofits are created to promote community and individual welfare. Lobbying activities are not limited by law, and regulations regarding partisan political activities Labor and Agricultural Organization. This is created for educational or instructive purposes, designed to improved conditions and efficiency of work. Types include labor, agricultural, or horticultural organizations.

501(c)(6) – Trade or Professional Association. These are created to improve business conditions. Types of these nonprofits include Chambers of commerce, retail merchants associations and real estate boards. They are typically not subject to legal limitations on lobbying and political activity.

501(c)(7) – Social or Recreational Club. Types of these nonprofits include hobby clubs, country clubs, and other groups created for recreational purposes.

501(c)(8)- Fraternal Societies. These types of organizations must operate under the “lodge” system, and provide substantial programs and activities for members, whose membership is based on common ties or pursuit of a common goal, and who receive benefits.

501(c)(9) – Employee Beneficiary Association. This kind of association provides for the payment of life, sickness, accident, or other benefits to its employee members.

501(c)(14) – State Chartered Credit Union and Mutual Reserve Fund. These nonprofits offer their members high-quality financial services and enable them pool and organize their own financial resources.

501(c)(19) – Veterans Organizations. This type of nonprofit is comprised primarily of past or present members of the United states Armed Forces, and organized to provide benefits for these and other USAF members.

50 Non-Profit Business Ideas with Huge Impact​

1. Green living

The earth has undergone much damage over the years due to various human activities such as industrialization, deforestation and so on. Only very recently did people start realizing the gravity of these activities. And this is why there is increasing global awareness of the benefits of green living. As of present, the green living campaign hasn’t gone very far. In fact, in many countries, the concept of green living is literally unheard of. If this is what obtains in your vicinity, then you can start a non-profit that advocates green living.

2. Proper health care practices

In many countries (especially developing countries), improper health practices such as self-diagnosis, self-medication, drug abuse, and quackery are rife. If you live in one of such countries, then you should consider starting a non-profit that campaigns against these practices and enlightens people on better practices for improving their health.

3. Critical health conditions

Critical health conditions such as diabetes, sickle cell disease, cancers, Down syndrome, leprosy, HIV/AIDS, and others that require long term management are common in most societies. And the cost of managing these conditions is usually enormous, since the management is usually for a long term or even for the rest of the patient’s life. A good non-profit idea is to come to the rescue of people with these conditions. You may consider starting a non-profit that generates funds for the procurement of drugs and financing of other management procedures for such people.

4. Elderly care

In many places, elderly people usually don’t get enough care. And since they are no longer strong enough to get whatever they need themselves, they usually face very hard times in their old age. You can help improve the welfare of the elderly in your locality by starting a non-profit aimed at taking care of them.

5. Save animals from going extinct

Many animals are on the brink of extinction. We often read in newspapers and hear in T.V. documentaries that there are less than 50 of certain animals left on the earth. You can prevent certain animals from going into extinction by starting a non-profit that advocates for their protection and preservation, and also to encourage individuals to stop poaching these animals or species at the brink of extinction.

6. Encourage tree planting and preservation

Many natural disasters such as hurricanes and erosion have been attributed to heavy deforestation. By encouraging tree planting and discouraging deforestation through a non-profit, you can help improve the environment and protect people from the harsh effects of natural disasters.

7. Education for the poor

Even though education cannot be downplayed, not everyone can afford the costs. Some people find it hard to get money to feed themselves; let alone get quality education. A good way to ensure that poverty doesn’t deny such people access to quality education is to start a non-profit that generates funds to sponsor their education. Better yet, you can start a school that will offer high quality education for absolutely free.

8. Disabled people

In many societies, people with physical disabilities are looked down upon. They are not able to enjoy many of the benefits that others enjoy. And they face episodes of hardship and abuse. If you feel the need to help such people, then you can start a non-profit that that defends the rights of the physically disabled and help them to enjoy various benefits that other people enjoy.

9. Trade and professional

Sometimes, there may be need for the establishment of non-profits to serve an industry. A prominent example of such non-profits is the American Medical Association.

10. Campaign against vices

Violence, racism, child abuse, and other vices are rife in many societies. You can start a non-profit that campaigns against any of these and supports people who have fallen victim to such vices.

11. Alcohol-Free Club

There are numerous benefits for starting a dance club or nightclub that does not serve alcoholic beverages, as opposed to a nightclub that does. The benefits include: less investment capital required to start and operate the business, fewer government regulations, and substantially lower liability insurance premiums, less competition within the industry, and a clear definition of the target market, increased choices in terms of operating location. In addition to the aforementioned benefits, people are also starting to lead a healthier lifestyle that does not include consumption of alcoholic beverages, making this a very timely business get going.

12. Charity Auction Service

If you’re looking to start-up in the non-profit world, this could be the right business for you. One of the best methods for charities to raise funds for their particular need is to host a charity auction. Typically, local merchants will donate products and services to be auctioned. The focus of this business start-up is to organize the event and act as the auctioneer and solicit local business owners for donations of products and services to be auctioned. The best charities to build alliances with are local ones that serve the community exclusively.

13. Charity Casino Organizer

There are two options available for generating revenues and profits by starting and operating a charity casino business. The first option is to simply hire some casino equipment to charities for their events. The second option is to completely organize the event, supply the equipment, and supply dealers and staff to operate the event, and finally supply the location for the charity casino event. The first option will be less costly in terms of establishing the business, but with that said, the amount of revenue the business is capable of generating will also be less than the second option

14. First-Aid Kits

Putting together first-aid kits is a great business for those looking to help. Two of the best aspects about starting a business that assembles and markets first-aid kits are the facts that the business can be set in motion for less than a $3,000 investment and first-aid kits are in high demand. First-aid kits can be assembled, packaged, and sold to retailers on a wholesale basis. Or, the first-aid kits can be specially designed and marketed to specific industries, such as construction and transportation.

Furthermore, fantastic markets for first-aid kits include manufacturing and warehousing firms, as these types of businesses are required by law to have first-aid kits on site. Providing you can maintain a 100 percent mark-up on the first-aid kits that you assemble and achieve $100,000 per year in gross sales. This inexpensive and simple business start-up can generate profits of $50,000 per year, prior to overhead costs.

15. First-Aid Training

If you have a passion for helping people and you have the skills, first-aid training is always in demand. Make no mistake; starting an instruction business that focuses on teaching first-aid training has the potential to generate profits in excess of $100,000 per year. Best of all, the business can be managed from a home based office and started for less than a few thousand dollars.

Clients can include construction companies, warehousing and distribution companies, and clubs and organizations. Furthermore, the first-aid courses are best taught on the customer’s site in a group-training format, as this can keep the cost per student to a minimum while keeping business volume and profits to a maximum.

Additionally, be sure to offer all clients yearly refresher courses for their employees. The first-aid refresher courses can be slightly discounted as a method of ensuring a 100 percent yearly retention rate. Marketing first aid training services is as simple as designing a high-quality presentation brochure and setting appointments with potential customers to explain all the benefits to their firms by having employees receive occupational first-aid training.

16. Fundraising Consultant

This involves using your sales and financial experience to be a fundraising consultant. Acting on behalf of charities as a fundraising consultant can earn you as much as $100,000 per year, of course providing you have the skills and abilities to raise funds for the charities that your service represents. The first step required for establishing a fundraising service is to build alliances with local or national charities to represent the charities as a fundraising specialist.

The next step is to establish a fundraising program for the charity, similar to a business plan. The plan or program should outline how the funds will be raised, as well as the fee you will charge for your service. Typically, fundraising consultants charge a commission for services based on a percentage of the total amount of money raised, and the commission rate will range from 10 percent on amounts in excess of $100,000 to percentages as high as 50 percent for amounts under $1,000. As lucrative as the business sounds, remember the cost to establish, advertise, and manage the fundraising program comes directly from the fees charged for providing the service.

17. Graffiti Removal

Look anywhere and you’re sure to find graffiti’ walls, sidewalks, signs, and fences ‘making. A graffiti removal service is a very timely and in-demand start-up. Removing graffiti does not require a great deal of work experience. In fact, it can be learned on the job through trial and error. The market is unlimited, largely untapped, and is constantly being renewed so there is lots of upside growth potential.

The only equipment required is a portable pressure washer (water) and perhaps a portable sandblaster, but in recent years most graffiti removal services have been getting away from sandblasting because of the potential to damage surfaces. Regardless, both machines can be conveniently mounted on a trailer for easy transportation to and from job sites.

18. Pawnbroker

This involves using your negotiating skills by opening up a pawn shop and bringing in second-hand goods. Pawnbrokers sometimes get a bad rap, and unfortunately it only takes a few bad apples dealing in stolen merchandise to give the industry a bad name for all operators of pawnshops.

However, like any business venture, eventually the bad business operators will disappear and the good operators will flourish. Starting a pawnshop business is a good choice as a business start-up for a few reasons, such as no special business skill requirements, relatively low initial investment, and excellent profit potential.

Furthermore, utilizing used product pricing or value guides such as the Blue Book take away any guesswork in terms of the wholesale and retail value of products. The key to success for operating and profiting from a pawnbroker business is to keep all transactions legal, establish the business in the right location, deal only in up-to-date merchandise that has real value, and always practice good negotiation skills.

19. Portable Storage Service

A portable storage service resonates with good things coming in small packages. Simply start by purchasing good-quality commercial-grade power tools, design an information brochure listing tool descriptions, and indicate day and weekly rental rates. The rental price list can be distributed to local construction and renovation companies. Your advantage over the competition is that you can advertise that you guarantee free delivery of the rental tool (if in stock) to the job site in one hour. The entire business can be conducted right from a delivery truck with the assistance of a cellular phone for incoming rental inquiries.

20. Refitting Houses for the Disabled

Improving the quality of life for the disabled is a business that means caring for others. Millions of people live with disabilities, and often these physical disabilities can turn life’s simplest tasks into stressful and daunting chores. The housing needs and requirements for people living with disabilities are much different from those for people without disabilities.

Doors must be wide enough to accommodate wheelchairs, light switches have to be lower, and electrical outlets have to be higher. Kitchens and bathrooms often have to be completely customized, and ramps and other safety items have to be installed in the home. Starting a business that specializes in refitting homes to accommodate people with disabilities can be both a profitable and personally rewarding venture to initiate.

The most effective way to market this type of renovation service is to construct a showroom that reflects the alterations and improvements that can be made to a new or existing home to make the house more functional and user-friendly for the disabled person. Alternatively, if your budget does not allow you to implement this type of showroom display, you can still market your services with the use of brochures and other sales aids. However, this type of marketing does not have the same kind of tangible quality that a hands-on showroom can provide for clients.

21. Stress Management Courses

We live in a high stress world. Helping others deal with it can put you on Easy Street. During the 1970s, many futurists were predicting that due to the rapid gains in technology, the average workweek would shrink to only 30 hours by the year 2000. I wonder if these same futurists are now rubbing their heads in disbelief. According to the U.S. Department of Labour, the average American employed full-time is now working 47 hours per week, as opposed to 42 hours per week in the 1970s.

This fact, coupled with an increased workload and potential financial and family complications, makes it no wonder that the average person is at the end of their rope and suffering from stress-related health problems. Without question, starting a business that assists people in learning how to cope with stress and how to avoid stressful situations is a business venture with an unlimited number of potential clients. The marketing of the stress management classes could be targeted at individuals seeking to reduce or eliminate stress from their daily lives.

22. Used Furniture Retailer

Help others out of their financial hardships by picking out classic furniture to sell. Purchasing second hand furniture at auction sales, garage sales, from classified advertisements, and estate sales is the starting point for opening a used furniture store, or reselling second hand furniture right from your home.

There are a great number of benefits to starting a business that sells second hand furniture: No special skills or equipment requirements, relatively low initial start-up and monthly operating costs, Great profit potential, as used furniture can be marked up by 100 percent or more, Very little in the way of government regulations beyond a business license, Proven stable and profitable retail industry.

23. Opening a thrift store

The thrift store is a traditional non-profit business operated to raise funds for the organization. Thrift stores also provide visibility for non-profit causes while allowing the public to donate to stores that support specific causes, like animal protection. Unlike many charitable donations, income earned from the thrift store is undesignated, which means the owner or the organization can decide how the funds are used.

24. Opening animal adoption organization

These groups take unwanted, abandoned, abused, or stray pets and attempt to find suitable homes for them. Many business groups are created by and run by volunteers, who take the animals into their homes and care for them — including training, playing, handling medical issues, and solving behaviour problems — until a suitable permanent home can be found. Many animal adoption services send representatives out to do a home visit before the family can be approved to adopt their new pet, or even to drop the pet off once an adoption is finalized.

25. Creating a television inner master Chef

A nod to cooking reality TV is good way to make things flourish and create a landmark in the non profit business. Try rounding up supporters and foodies around a friendly culinary competition. Contestants can create their best dishes with a specific ingredient, or other criteria, and people will have to pay to taste and cast their votes. This sort of non profit business draws attention and audience which in turn can bring about an increase in people willing to help the needy and less privileged.

26. Hosting sales Charity events

Collecting barely used clothes or artefacts and host a weekend sale can be a business that raises fund. Taking pictures of the items beforehand, post them on social networks and generate buzz around your event. This business idea is most times mistaken as an auction event but unlike an auction event, you have to get or buy the products that would be sold at a fore mentioned price without the rancour of pricing and noise.

27. Breakfast in Bed

As awkward as it may sound, this business idea involves you soliciting local businesses to donate breakfast foods, have supporters and their networks place orders, and deliver the goods. Individuals willing to patronize in turn pay or donate cash and materials.

28. Scavenger Hunt

Picking out trash can be a very lucrative business idea in the non profit industry for career focused individuals. You just have to organize a scavenger hunt and send participants all around town. Charge a registration fee and offer extra tips and hints for different donation amounts.

29. Donate for Talent

Crowd source talent with this quick business idea and put on a talent show. In addition to an entry fee, supporters can donate to cast votes for winning numbers of different categories. No matter how annoying you see it, people are always interested to see the display of talents and vices.

30. Tie-Dye Party

Tie-dying and selling T-shirts can be a lucrative business idea if you really know what you’re doing. Host a get-together with materials for people to make their own tie-dye shirts and charge an entrance fee, or offer to tie-dye personal items for a donation.

31. Organising a Give it up show

Organising a give it up show to demonstrate how the smallest donation can make a difference, ask fundraisers to give up a daily beverage or meal and donate the money to a worthwhile cause instead. Intensify the appeal by asking supporters to participate for a certain number of days or encouraging them to meet a personal fundraising goal.

32. Hosting Bike Relays

This business idea might have turned a tried and true fundraising idea and a lucrative non profit business idea too– the traditional bike race – into a team-oriented activity. Set up a relay style race with prizes for the teams that place. Competitors will all have to pay a token to get into the race and you could attract investors using this unadulterated business idea.

33. Film fundraising

Starting a non-profit business that Host film festival and have participants enter their own unique productions is a very big money making idea. You can even turn it into a contest, where attendees can give $5 in order to cast votes for their favourite films.

34. Hairless Fundraising business

Participants pledge to shave their heads (or long-lasting beards) to raise money. This business idea has been making waves in the recent years with almost all individuals looking to start a non profit business in a small way beginning from here.

35. Trash Art Auction

This quick business idea isn’t just for the eco-friendly, but for all zealous individuals who have eyes for the non profit business. Enlist local artists to create some avant-garde masterpieces out of recyclables or other waste products, and auction off the pieces.

36. Quiz bowl

You can also start a non profit business that Host a “quiz game” night and charge an entrance fee for attendees. Group people into different teams to see who can gain bragging rights and raise the most money!

37. Run the Race

Host a costumed race where people dress up in alignment with a pop culture phenomenon, whether it’s zombies, Star Wars, Harry Potter, Hunger Games, or another theme. With all the different options to choose from, this business idea never gets old.

38. Roller Race

How about switching up the usual 5K run/walk with a roller-skating marathon? In addition to fundraising for entry, participants can raise money for proper gear like helmets, rollers, hover boards and kneepads.

39. A Dance Marathon

Starting a non-profit business that hosts a dance marathon and challenge participants to dance, for as long as they can; can be very lucrative. Supporters can also request songs for $5. Last one standing receives a prize.

40. Dodge ball Tournament

You can also start a business or organization that host dodge ball tournaments to raise fund for charity. Ask each team to fundraise a certain amount to participate and to come geared up for some serious dodging.

41. Organising House Party

This business idea is one that can grant you enough fame and fulfilment. Invite supporters and their friends and family to your charitable house party, which you can fix around a certain holiday or pop culture event. Incentivize donations by offering prizes for different levels of sponsorship, like discounted tickets to your next event or other unique party favours.

42. Gaming for Good

Starting a non-profit business that instigates charity and prominence into gamers can be mind blowing. Gamers can raise money by participating in a video gaming marathon. You can start a non profit business that brings gamers to raise funds. Live stream the event to reach a larger audience, and viewers can donate in order to submit challenges or request other forms of entertainment.

43. Battle of the Bands

Gathering local bands to put on a charity concert can be a super lucrative business. Both performers and attendees pay a registration fee. Having influencers on the judging panel, like popular radio hosts or a local celebrity can also be a great way to get people interested in your show.

44. Athletic Tournament

This business idea rallies locals around a sports tournament to raise money, whether it’s baseball, flag football, or bowling. You can even establish a theme or costume rule, requiring each team to come up with its own unique getup.

45. Craft Sales

Gathering talented friends and family members to help create and sell your crafts, whether they are bracelets, buttons, key chains, or other wares.

46. Good all Pub Crawl

The business idea that started Classy, a pub (or any kind of) crawl can be a great way to put a philanthropic twist on a Saturday night. Charge a fee for people to participate in the crawl, get people to dress up, and have participants earn sponsorships for each bar they make it to.

47. Localympics

Putting together an Olympics-style sporting event for locals, and ask each participant to fundraise a minimum amount to help you reach a collective goal can be exceptional lucrative.

48. Recipe Books

You can start a business that crowd source recipes from different supporters, and even across your friends and family, to compile a solid, hard-copy charity cookbook.

49. Art Show

Creating a platform for artists to showcase their works can be a mind blowing business. Local artists and supporters can pay a nominal registration fee to have their pieces showcased, and attendees can pay a registration fee to browse the collection. Afterwards, artists can choose to auction off their pieces for charity.

50. Trade and Professional

The business community often supports nonprofits to serve an industry. The American Medical Association is a prominent example. An entrepreneur might consider establishing a charity in a profession with which he or she is familiar with. It might support local artisans in a home industry such as carpentry. It would promote the trade and educate the public.

51. Start a Homeless Shelter

In conclusion, nonprofits organizations, also known as non-governmental organizations, or public charities, are in business to get a job done, not to make money. They nearly always tackle jobs that no for-profit business would want. They have no owners and are funded by contributions, not by investments. Many public charities are small businesses. They offer entrepreneurs no return on investment, only a salary and enormous job satisfaction. A non-profit may be established in any field and you could easily inculcate two or more business niches together.

Social Advocacy Groups
Social advocacy groups are classified under 501(c)(4). Social advocacy groups lobby or promote some sort of social or political effort. Funds typically come from donations or membership dues. Examples of social advocacy groups include Greenpeace, NAACP, ACLU, and the National Organization for Women. They also engage in fundraising, lobbying, and efforts to educate the general public about their cause.

501(c)(1)
501(c)(1) are nonprofits organizations that are organized by an Act of Congress such as federal credit unions. Since these organizations are set up by Congress, there is no application, and they do not have to file a tax return. Contributions are permitted if they are made for public purposes.

501(c)(2)
501(c)(2) nonprofits organizations are created to hold titles for exempt organizations. Interested parties must apply for this status with IRS Form 1024. They are required to file taxes annually with forms 990 or 990EZ.

501(c)(3) – Charitable Organizations
Most nonprofit organizations fall under 501(c)(3). This includes religious, educational, charities, scientific, and literary organizations. Donations made to 501(c)(3) groups are tax deductible.

Public charities are the largest type of 501(c)(3) with nearly 1 million registered in the United States. Some examples include food banks, museums, art groups, amateur sports, colleges, low-income housing organizations, and animal welfare organizations. Charities are typically funded through donations, government grants, or membership dues. All income for 501(c)(3) groups are tax exempt.

There are five types of 501(c)(3) organizations:

• Private Foundations
• 509(a)(1)
• 509(a)(2)
• 509(a)(3)
• 509(a)(4)

Foundations
There are an estimated 103,430 foundations in the United States. Typical missions include funding other nonprofits and sponsoring events and programs for awareness or education. Most foundations focus on finding worthy nonprofit organizations to support through donations and guidance. Foundations are usually established by wealthy individuals or businesses.

In order to remain classified as a foundation, it must donate a certain portion of its income on an annual basis. This is to prevent the misuse of a foundation for personal gain or tax avoidance. Foundations are also prohibited from any sort of political activity, although it may support organizations that engage in political lobbying. Two examples of well-known foundations are the Bill and Melinda Gates Foundation and the Ford Foundation.

501(c)(4) – Civic League, Social Welfare Organization or Local Employee Association
Civic leagues, social welfare organizations, and local employee associations fall under the 501(c)(4) classification. They have fewer restrictions when it comes to political activity such as lobbying. The purpose of these organizations is to support individuals within the group who may have fallen on hard times and the general welfare of the organization’s members. Nonprofits can apply for this designation with Form 1024 and file annual returns with Form 990 or 990EZ.

501(c)(5)
Labor, agricultural, and horticultural organizations fall under this designation. Their missions are education, improvement of working conditions, and increases in efficiency and quality. These organizations are permitted to engage in lobbying. 501(c)(5) organizations are funded through donations and member dues.

501(c)(6) – Trade or Professional Association
Some examples of 501(c)(6) organizations are business leagues, chambers of commerce, and real estate boards. Their purpose is to improve business conditions for its members. Nonprofits seeking this designation must file Form 1024 with the IRS.

501(c)(6) organizations are permitted to engage in political activities. Typically, they are funded by member dues and offer programs and services for member education. In the United States, there are around 63,000 501(c)(6) organizations. Some examples of well-known 501(c)(6) organizations are the American Farm Bureau, the National Writers Union, and the International Association of Meeting Planners.

501(c)(7) – Social or Recreational Club
501(c)(7) organizations are social or recreation clubs. The purpose of these nonprofit organizations is to organize activities that lead to pleasure, recreation, and socialization. Common examples include hobby groups, country clubs, and sports leagues. To qualify for this designation, IRS Form 1024 must be filed. Tax returns are filed with Form 990 or 990EZ.

501(c)(8) – Fraternal Societies
501(c)(8) nonprofit organizations are fraternal societies. They are created to provide for the payment of life, sickness, accident, or other benefits to members and to further the development of its members. They can include service clubs, lineage clubs, or secret societies.

In order to qualify for the 501(c)(8) designation, fraternal societies must have parent and subordinate organizations. Additionally, it must provide some sort of insurance to its members. Some well-known examples of 501(c)(8) nonprofit organizations are the Knights of Columbus and the Shriners.

501(c)(9) – Employee Beneficiary Association
501(c)(9) nonprofit organizations are voluntary employees’ beneficiary associations. They provide payment to members and their dependents in the event of sickness, accident, or other unfortunate events. Membership is reserved for employees with a common employer or membership in the same union. Organizations can apply for this designation with Form 1024 and must annually file Form 990 or 990EZ.

501(c)(10) – Domestic Fraternal Societies and Associations
501(c)(10) nonprofit organizations are fraternal societies that do not provide any sort of payment to members. Basically, 501(c)(8) are fraternal organizations which exists to support members, while 501(c)(10) are fraternal organizations which use member dues to support outside causes with no benefits for members.

501(c)(11) – Teacher’s Retirement Fund Associations
501(c)(11) are nonprofit organization which manages teachers’ retirement funds. Its sources of income are membership dues, tax proceeds, and investment income. These are local organizations. Form 1024 must be filed to qualify for 501(c)(11) designation.

501(c)(13) – Cemetery Companies
501(c)(13) are nonprofit organizations which are created to provide burial services for its members. These organizations exist solely for this reason. Common sources of income are membership dues and donations.

501(c)(14) – State Chartered Credit Union and Mutual Reserve Fund
501(c)(14) are state chartered credit unions and mutual reserve funds. These organizations offer financial services to their members and the community, typically at discounted rates. Sources of income are business activities and government grants. Each state’s law differs when it comes to formation of these types of nonprofit organizations. There is no application form for this type of nonprofit but 501(c)(14) nonprofits must annually file Form 990 or 990EZ.

501(c)(15) – Mutual Insurance Companies of Association
501(c)(15) are mutual insurance companies. These nonprofits provide insurance to its members at cost. Usually, they are formed at the local level. Typically, these organizations provide insurance for property damage, burial, and funerals.

501(c)(16) – Cooperative Organizations to Finance Crop Operations
501(c)(16) nonprofit organizations are created to finance crop operations. Typically, these organizations are created by a group of farmers to work together to pool resources for agricultural operations. Some examples of these operations are purchases of farm equipment, crop cultivation, livestock, shipping, and marketing.

501(c)(17) – Supplemental Unemployment Benefits Trust
The 501(c)(17) designation applies to supplemental unemployment benefit trusts. These organizations exist to provide support and payment to individuals who are permanently or temporarily unemployed. These nonprofits must be supported by the employer or employees. They must also pay beneficiaries in an objective manner.

501(c)(18) – Employee Funded Pension Trust
501(c)(18) applies to employee funded pension trusts created before June 25, 1959. These are funded exclusively by member contributions. Payments can only be used to pay benefits to members. Additionally, objective standards need to be created for any distributions.

501(c)(19) – Veterans Organizations
501(c)(19) is for veterans organizations. To be considered eligible, 75 percent or more of members must be active or past members of the armed forces. These organizations purposes are to provide benefits for United States Armed Forces members. Most veterans’ organizations are funded through donations.

501(c)(20)
501(c)(20) are nonprofit organizations which apply to qualified legal service plans. As of June 30, 1992, this status has been eliminated so only older organizations qualify with most choosing another designation. These organizations were created with the purpose to provide legal services to members.

501(c)(21) – Black Lung Benefits Trust
501(c)(21) nonprofit organizations are trusts created to pay claims that arise from the Federal Black Lung Benefit Act of 1969. Coal miners who become sick due to black lung disease are eligible for benefits. These trusts are funded by coal mine operators.

501(c)(22) – Withdrawal Liability Payment Fund
501(c)(22) nonprofit organizations are created to provide funds to meet liabilities of employers who are withdrawing from multiemployer pension funds. These organizations’ purpose is to help employers fulfill their pension obligation. They are funded by employers.

501(c)(23) – Veterans Organization
501(c)(23) designation is for veterans organization which were established before 1880. They provide insurance and benefits to members. In order to be eligible, at least 75 percent of members have to be present or past members of the United States Armed Forces. Funding comes from donations and government grants.

501(c)(26) – State Sponsored Organizations Providing Health Coverage for High-Risk Individuals
501(c)(26) are nonprofit organizations created at the state level to provide insurance for high-risk individuals who may not be able to get insurance through other means. Members are typically patients with health risks or preexisting conditions. Funding comes from donations or government grants. Examples of states with these high-risk insurance pools are North Carolina, Louisiana, and Indiana.

501(c)(27) – State Sponsored Workers’ Compensation Reinsurance Organization
501(c)(27) nonprofit organizations are created to provide insurance for workers’ compensation programs. Organizations that provide workers compensations are required to be a member of these organizations and pay dues. Typically, these organizations are supported by government grants and member dues.

501(d) – Religious and Apostolic Associations
501(d) groups are religious based groups that share a common treasury. Their defining feature is the pooling of all members’ income and then paying tax from this amount. There is no restriction on political activity. Donations are not tax exempt.

501(e) – Cooperative Hospital Service Organizations
501(e) nonprofit organizations provide cooperative services for two or more hospitals. These are typically service organizations which look to support sick patients and their families. Most funding comes from donations which are tax exempt. Form 1023 must be filed to qualify as a 501(e).

If you need help filing to be recognized as a nonprofit organization, you can post your legal needs on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

The Nine Steps to Incorporate a Successful Nonprofit

(psst: save this beautiful infographic of all the steps!)

How Do You Form a Nonprofit in the USA?
Here are the 9 steps to starting a 501c3.

It’s worth noting that some of these steps will change depend on your state, but at a basic level, they remain the same:

1. Three Things To Research Before Starting a Nonprofit
2. How to Build a Lasting Foundation
3. What to Include in Your Business Plan
4. Your Four Main Sources of Revenue
5. How to Choose the Best Name for Your Nonprofit
6. How to Recruit Your Board
7. How to Incorporate Your 501c3
8. Filing to be Tax Exempt
9. Ongoing Compliance

Step 1: Three Things To Research Before Starting a Nonprofit

“I wish I knew that before I started.”

These are words you never want to say.

Unfortunately, nearly half of all nonprofits are set up to fail from the start because they don’t put enough time into research and planning.

And while there may still be some things you wish you knew, you can at least limit your worry by answering these three questions which lead most successful nonprofits down the right path:

1. Do you have proof that your nonprofit will fill an unmet need in your community?Gathering support, receiving grants, and getting donations will become a whole lot easier if you have strong numbers to back up your idea. For example, if you want to start a tennis club, you’ll need to have a good estimate of how many tennis players live in the region that don’t have anywhere else to play.
2. Are there any other organizations already serving the same need you plan to? Even if your nonprofit is targeting a very niche need, there may be another organization already servicing that need. As I mentioned in the intro, large organizations are using “big data” to deliver extremely personalized experiences to large groups of people, meaning they can now fulfill the roles that small organizations used to play. For example, if you wanted to start a children’s illustrators association, you may have competition from a children’s writers association, many of which also service children’s illustrators. The National Council of Nonprofits offers a locator tool to find nonprofit organizations in your area and throughout the United States.
3. What sort of people will join or support your organization? Gaining support for your nonprofit quickly is one of the most crucial steps in building a successful organization. That’s why knowing exactly who your targeted demographic is can make it easier for you to find supporters and members, and create resources they’re interested in. One good tool to help you research demographic information is the American Fact Finder.

Once you’ve answered these three questions, you’ll have a better idea of how to give your nonprofit the best chance at success.

Now, it’s time to use what you’ve learned to build a plan to give your nonprofit a lasting foundation.

Step 2: How to Build a Lasting Foundation

After you’re able to explain the necessity of your new nonprofit, it’s time to build a strong foundation, and the strongest foundations start with the founder. If you’re the founder… that’s you!

According to leadership expert Brian Tracey, who’s worked with more than 1,000 organizations, there are five traitsthat all successful Founders must possess:

1. Self-Discipline: As Brian says best, “If you can discipline yourself to do what you should do, whether you feel like it or not, your success is virtually guaranteed.”
2. Integrity: All successful organizations are built on trust. People will be more willing to work with you and support you if they can trust you, especially during difficult times. “Be perfectly honest in everything you do and in every transaction and activity,” Brian says. “Never compromise your integrity.”
3. Persistence: If you are able to develop a habit of persistence even before you meet obstacles, they will be much easier to get through once you meet them. “The courage to persist in the face of adversity and disappointment is the one quality that, more than anything, will guarantee your success.”
4. A Clear Sense of Direction: In Brian’s experience, he’s seen motivated entrepreneurs get hijacked by the day-to-day tasks and short term problems that naturally arise from starting an organization. That’s why Brian says to develop a clear sense of direction, not only for your own work, but for the people who work with you.
5. Decisive and Action Oriented: Successful founders must think and make decisions quickly. Seek feedback just as quickly and self-correct when needed. Brian says, “The key to triumph is for you to try. Successful people are decisive and they try far more things than other people do.”

If you can instill these traits in yourself, and live them out in practice, you’ll have built the strong foundation your nonprofit needs to succeed in today’s world.

The next step to start a nonprofit is to develop a clear plan on how your organization will operate.

Step 3: What to Include in Your Nonprofit Business Plan

The mistake many founders make in the beginning stages is that they skip ahead to incorporating their nonprofit without spending the time to create a business plan.

And while a “business plan” may sound like it only applies to “for-profit” organizations, nothing could be further from the truth. As you’ll quickly discover, potential investors, donors, and board members will all ask to see copies of your business plan, and if you don’t have one, you’ll miss out on a lot of opportunities.

If you need help creating your business plan, here are 18 examples of different nonprofit business plans you can follow.

If you’re creating your own from scratch, there are seven major areas you’ll need to cover:

1. Executive Summary: This is a short overview of your business plan. When writing yours, think of it as an elevator pitch.
2. Products and Services: Here you fill out the type of value will you be creating and what makes it unique. Besides membership and events, many nonprofits offer additional merchandise like custom t-shirts to help bring in some extra money (revenue will be covered in the next step). For example, the New York Association of School Psychologistsoffers travel mugs, jewelry, books and apparel to help raise more money.
3. Market Analysis: In this area, you will explain what the market landscape looks like: your competitors, your stakeholders, and a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) on why your organization will succeed.
4. Marketing Plan: A strong marketing plan is arguably the most important thing when it comes to nonprofit success or failure. Just take the story of Kari Keir, a Minnesota native who started her own nonprofit in 2012, but just a year later was forced to shut it down, because she didn’t have a marketing plan in place. “We were naïve to think we would form and people would hear about us through word of mouth and we would be successful.” To avoid her mistake, it’s necessary to develop a strong marketing plan that does three things:
   • Explains who your organization will service
   • Explains how you will find these people
   • Explains how you will convince these people to support you
5. Operational Plan: The “operational plan” is just a fancy way of answering the basic questions of:
   • Where will your office be?
   • What supplies and equipment will you need?
   • How will you deliver your services?
   • What kind of staff or volunteers will you need?
6. Organizational Structure: This is the place to list out your staff, their roles, and how they’re organized. Talk about what expertise each role will have and how your organizational structure can make your nonprofit successful. To create a simple organizational chart, here’s an easy tool called Organimi that can help.
7. Financial Plan: This is the page any potential investor will flip to before deciding to support your organization. It will also help you apply for grants and loans. To create yours you will need some knowledge of basic accounting principles to project cash flow analysis and budget. If you need help, The Wallace Foundation has some excellent resources and calculators to get you started. Another part of your financial plan is how you plan on generating revenue for your organization. I cover this in full in the next step.

Many organizations have difficulty building their business plan, but it can be easier by using the example templates I provided. In the next section on how to start a nonprofit I’ll cover the four main sources of revenue for nonprofits and how to create the best strategy for each.

Step 4: Your Four Main Sources of Revenue

In the business world, organizations make the majority of their revenue from products and services. Nonprofits differ in that they have three additional major sources of revenue. Here are all four:

1. Fees for Services and Goods from the Private Sector
   • Membership dues and event tickets
2. Private Contributions
   • Regular Individual Donors
   • Fundraising
   • Corporate Sponsors
3. Government Grants
4. Fees for Services and Goods from Government
   • Note: I will not be covering this as it only applies to nonprofits that provide services on behalf of the government, like healthcare, or public education.

In the below graph, you can see the average proportions of each revenue source.

(Source: Nonprofit Sector in Brief 2014 National Center for Charitable Statistics, the Urban Institute)

No nonprofit I’ve come across has figured out how to do all four exceptionally well. While some do well with donations, others do better with grants, etc. But, what I have seen work best when approaching all four at once is to have separate strategies for each different revenue source. Below I’ll cover the basics of each revenue source and how to develop a strategy for your nonprofit.

1) Fees for Services and Goods from the Private Sector

Revenue from goods and services include money made from membership dues, event tickets, professional services, and products like merchandise. For example, the writing association I’m a member of charges a yearly membership fee, event ticket fees, fees for professional editing, and they sell t-shirts.

The two biggest contributors in this form of revenue are from membership dues and event tickets, which I cover below.

Membership Dues
Membership dues are the monthly or yearly price people pay to become a member of your organization. But, people will only join your nonprofit if there’s something in it for them. A study of over 800 associations reveals the two main reasons anyone joins an association (this also applies to other types of nonprofits):

1) Access to a unique community of like-minded individuals

Nothing engages and attracts members greater than the desire to belong to a community who shares their personal interests. And among the most popular ways to build a community of like-minded individuals is through networking events. In fact, here’s an example of an association who grew over 1,000 members just by attracting new people to network at their annual conference.

2) Access to specialized information and resources in your niche

What can your organization offer that someone would actually pay for? Imagine you’ve started a Writing Association. The types of specialized information you can offer could look like this (in fact, these are some of the specific reasons I joined my Writing Association):

• Writing workshops
• Education sessions on how to pitch a novel to agents
• Legal advice when it comes to copywriting

How to create a community people want to be a part of and resources people can’t wait to access
People join communities and access resources, because they create value.

Unfortunately, creating value is one of the biggest struggles of new nonprofits.

“Why aren’t people coming to my events? Why aren’t people asking to use our services?” These are questions I hear all the time. The reason is because holding the right types of events and creating the right types of resources take a lot of understanding and hard work. You need to know who exactly to attract and what exactly they’re looking for. Surprisingly, this is actually where the for-profit world can lend a hand. For-profit businesses don’t have grants, donations, and dues to rely on for revenue, so they must figure out how to create enough value with their products and services to generate profit.

To create value, for-profit businesses follow five steps, which can easily be applied to any nonprofit strategy. Here are those 5 steps as offered from Inc.com, which I’ve tailored to a nonprofit standpoint:

Step 1: Understand what drives value for your members

The only way to understand what drives your members is to talk directly to member prospects and find out what kind of information, events, and services they would be willing to pay for.

Step 2: Understand your value proposition

Having a clear and concise value proposition is the easiest way to interest a prospective member in your organization. As Wordstream explains, “A value proposition tells prospects why they should do business with you rather than your competitors, and makes the benefits of your products or services crystal clear from the outset.” Or, in nonprofit terms — “Why should someone become a member and what promise are you offering them in return.” But, a successful value proposition is more than just words, it’s the look and feel of your brand, your website, your services, your events, and how you treat members.

Take for instance the Apple iPhone. Wordsteam suggests that the Apple iPhone experience IS the product. Anyone who owns an iPhone can tell you how simple the interface is, how beautiful the design is, and how easy (and addicting) it is to use. In the same way, what value proposition are you offering prospective members that will want them to join your organization? Imagine you’re a tennis club. What makes you stand out from the other tennis club down the street. When a prospective member visits your tennis club, what’s the impression of the courts, equipment, change rooms, etc.?

Step 3: Identify the members who you are able to create the most value possible for

The most successful nonprofits create profiles of their ideal members so they know where to find these people, how to talk to them, and their needs. It’s because they know these ideal members so well that they can offer them exactly what they want. Ideal members are also referred to as a Target Market. “Nonprofits are so passionate about serving as many people as possible, they tend to think wide versus deep,” says Susan Burnash, Nonprofit Marketing Strategist. “They would rather say ‘We serve homeless people,’ than ‘We service homeless senior adults in the city of Atlanta.’ Although this is admirable from an organizational standpoint to have such a philanthropic mission, from a marketing perspective, this blanket statement (and Target Market) is a marketing disaster waiting to happen.” Susan also suggests some questions you can answer to help you create your own Target Market:

• Who would join your organization?
• What is their age and gender? What are their interests? What is their income level?
• Where do these people live? Where do they hang out? Where do they get their news from?

Once you have your Target Market identified, you’ll have a much better idea about what products and services to offer and how to advertise them to these people.

Step 4: Create a win-win price

The price you charge members to join your organization is called a member due. Member dues are often paid on a monthly or yearly basis, and quite often nonprofits make their member dues renew automatically monthly after month or year after year until a member cancels their membership (this saves a lot of time in administration).

While there is no perfect formula for determining your member due price, your goal is to create a win-win scenario:

A win for your members that keeps member dues low.

A win for your organization that covers as many administrative costs as possible through member dues.

With some basic math, you can figure out how much revenue you can expect for your organization from member dues:

Expected Members x Yearly Member Dues = Yearly Revenue

Ex. 500 Members x $50 Yearly Member Dues = $25,000 Yearly Revenue

In the above example, $25,000 is certainly not enough to run an entire organization and pay staff. That’s where event fees, donations, grants, and products and services also contribute. But before you jump to other sources of revenue, there’s one more step to ensure you build a robust member-due driven revenue stream.

Step 5: Focus investments on your most valuable members

Which do you expect to be more valuable to your organization in the long run?

1. One new member?
2. One retained member?

The answer is definitely one retained member. That’s because the costs with finding and convincing a new member to join your organization can be up to 25 times more expensive than keeping a current member engaged. So, when creating value to attract members, consider how you will retain them in the long run. As time goes by, you may have to refresh your strategy to keep up with the times. To help you out, here are 12 practical ways to engage and retain members in today’s world.

Event Fees
I know a Lawyer’s Association that runs completely off event fees without charging membership dues. That’s because they’ve created a regular schedule of amazing events that sell out every time.

However, this isn’t the case with most organizations who use events as a tool to supplement their revenue, and to attract new members.

How much you rely on events for revenue depends on what type of organization you’re starting (a tennis club, vs a foundation would have drastically different event revenue). However, to help you see what most nonprofits do when it comes to events, I analyzed over 1,000,000 events created by Wild Apricot’s nonprofit customers.

Here are some of the highlights:

• Member meetings are most common in February/March (think educational workshops, banquets, etc.)
• Networking events are most common in February/March (think industry events, speaker sessions, etc.)
• Conferences, conventions, and retreats are most popular in March/July/September/October

You can view the full details of what I call The Ultimate Nonprofit Event Calendarhere.

If you plan on making paid events a major source of revenue for your organization, here is a full guide on how to plan an event and a fantastic event planning checklist that you can print off and use.

2) Private Contributions

Private contributions are made in the form of donations. But, before you can accept donations, or engage in fundraising activities, many states require you to complete Charitable Solicitation Registration. You can do this in tandem with incorporating your nonprofit. Some states even require you to register for “Games of Chance” like raffles and 50/50 draws, whereas in other states, these activities are actually illegal. To find out your State’s regulations, and to register, select your State from this map.

The Nonprofit Council has also put together a great article on Ethical Fundraising to help guide you when it comes to soliciting donations.

When you’re ready to start soliciting donations, there are three main ways to do so:

Regular Individual Donors
To reduce personal income tax, many people contribute to nonprofit organizations. However, people won’t give to your organization unless they believe in your cause and can see you doing good work. Once you’re ready, try some of these 18 ways pro nonprofits are collecting donations from individuals.

Fundraising Activities
Fundraisers are the simplest tactic to increase revenue. That’s because they utilize the people who already believe in your organization to reach new people through fun events and campaigns. Even the smallest nonprofits are able to quickly raise thousands with some simple fundraising tactics. Take for example the story of one woman who raised $8,000 for her football club in just one month by shooting a video and having her club members email it out to their friends.

Fundraisers are also often best paired with events. If you want to raise money by holding a fundraising event, you’ll want to read this. A study of 99 nonprofits discovered that fun runs are the most cost effective, easiest to plan, and have the highest fundraising potential of all other types of fundraising events. We also have a list of 200+ fundraising ideas to help you find the right one for you.

Sponsorship Relationships
Sponsorships can be the toughest type of private contribution to seek. Some organizations have a whole team setup just to seek out sponsors and maintain relationships. But if you’re just starting out, there’s only one activity you need to do that has the highest chance of landing a corporate sponsor. According to sponsorship expert, Chris Baylis, that one thing is a discovery call. The reason discovery calls win over all other tactics (including creating the dreaded sponsorship package) is because you can qualify a potential sponsor on the spot and begin a relationship right away with those interested.

Learn More: How to Write a Sponsorship Letter

3) Government Grants

If you’re new to grant applications, beware! The words “grant application deadline” have been known to cause panic in the nonprofit world, as this comic indicates.

(Note, the Happy Healthy Nonprofit bookin the image is a great book by Beth Kanter and Aliza Sherman on eliminating stress in the nonprofit workplace.)

Filling out a government grant correctly, within wordcount, and on time can be a very stressful task. My best advice here is to know what grants you can apply for and start the application far in advance. I’ve heard way too many stories of computers crashing the night the application is due.
Here are some helpful places to begin your search for grants relevant to your nonprofit:

• Foundation Directory Online
• Grants.gov
• Catalogue of Federal Domestic Assistance
• National Endowment for the Humanities
• National Endowment for the Arts
• The Puffin Foundation is a private fund for individuals and foundations.

To help you get started with an application, the United States Government has a great guide on how to determine your eligibility, application instructions, and even how to avoid grant scams. Or, if you enjoy webinars, Charity How To has a free webinar on how to write your first grant.

Building a business plan and creating your revenue strategies from scratch is not a lot of fun, but the payoff is definitely worth it. Once you’ve completed all these steps, it’s finally time to do the one thing most are itching to do from the start: pick a name.

Step 5: How to Choose the Best Name for Your Nonprofit

Typically the best nonprofit names are easy to remember, indicative of what they do, and sound appealing.

If you haven’t come up with a name yet, Nonprofit Ally has a number of tips to give your nonprofit the best name. They say that the best nonprofit names answer three questions:

1. My nonprofit will…? To help answer this question, write all the action words you can think of to describe your nonprofit (give, teach, heal, feed, rescue, etc.)
2. My nonprofit helps…? Describe the market you plan to serve (children, hungry, homeless, elderly, cats, environment, etc.?)
3. Our members are…? If your nonprofit has a specific type of member then it may be important to include them in your name. Doctors without Borders and Mothers Against Drunk Driving are good examples of this.

If you need more examples, here are three great nonprofit names that answer the above questions. Also note that it’s okay to choose a longer name as long as it’s descriptive:

• World Wildlife Fund
• The Association for Library and Information Science Education
• Corporate Volunteer Council of Atlanta

Once you’ve picked a name, you’re not done yet. Make sure another organization doesn’t have the same name as you by conducting a quick Google search. Then you’ll need to check if it’s available with the Secretary of State in your State. Here is a map with links to each Secretary of State where you can check.

Once you have a business plan and a name, there’s one more step before being incorporated: to gather your board.

Step 6: How to Recruit Your Board
Some States will require you to gather your board before incorporating, because you must list their names in the documents.

If your State doesn’t require this, it’s still a good idea to recruit your board first, because they can help you with the incorporation process and lead your new nonprofit on the best path when faced with challenges at the start.

In this section, I will cover how to recruit the best board members for your nonprofit and the five steps to get them up to speed as quick as possible.

Who to Recruit for Your Board
An unsupportive and unmotivated board can quickly dismantle a nonprofit. Unfortunately this isn’t a rare occurrence and I’ve heard many stories of office drama, board members scrapping the mission, and even forcing staff to carry out their own initiatives. If you’re worried about this happening to you, here are 14 interview tips to help you uncover a toxic board member from the start.

On the other hand, a supportive and motivated board can help your nonprofit grow quickly. It’s all about finding the right fit during the hiring process. But what is the “right fit” exactly?

You may be tempted to hire someone with the right fit when it comes to skills and experience, but a survey of over 2,000 HR professionals reveals that the right fit has more to do with the following seven characteristics:

1. Strong work ethic: Setting and achieving goals
2. Dependable: Consistently following through
3. Positive attitude: Creating a good environment
4. Self-motivated: Working effectively with little direction
5. Team-oriented: Making the most out of collaboration
6. Effective communicator: Understanding the benefits of clarity
7. Flexible: Adapting in a meaningful way

Another important point, as The Nonprofit Answer Guide mentions, is your board should be made up of individuals who have expertise and resources in different areas. A good rule of thumb when recruiting is:

• One-third from individuals who have access to financial resources or soliciting donations.
• One-third from individuals with management expertise in areas of financial, marketing, legal and the like.
• One-third from individuals connected at the community level, with expertise in your service field.

If you recruit a team who possess the right experience, skills, and characteristics, there’s a good chance you’ll build a strong team that will make your nonprofit a success.

To help you recruit such a team, I’ve broken down the whole recruitment process with into four steps, including templates to follow and places to find diverse board members.

1) Define Success and Build Job Descriptions
Before you can begin your recruitment process, you’ll need to determine which roles you need filled. This is where you can refer back to the organizational structure you created in your business plan.

Most nonprofits have similar roles when it comes to the board. Here are the three most common ones for you to consider and examples of what success in each role might look like for your organization:

• Leader: This person is the key representative who can lead the nonprofit and act as a spokesperson. The role title might be: President, CEO, Board Chair, etc. If you’re creating this nonprofit, this role is likely yours. Sometimes boards have a second in command to the Leader, typically called the Vice Chair.
  • Success for the Leader might be to grow the organization a certain percentage year over year, develop a strong culture within the nonprofit and build up the brand of the nonprofit as a professional organization within the community.
• Secretary or Committee Chair: This role is responsible for helping the Leader execute projects, write meeting minutes, keep track of office activities, help organize meetings, make sure the board complies with all local bylaws, etc.
  • Success for the Secretarymight be to organize all meetings on time, facilitate discussion between board members and make sure all board members are informed and on track.
• Treasurer: This person is responsible for keeping track of money, fees, expenses, paying bills, etc.
  • Success for the Treasurer might be to stay within budget and file all tax forms on time.

After determining the roles of your board members and defining success, it’s time to craft job descriptions to recruit your board and formalize their roles. Here are some great job description examples of each role, but overall your job descriptions must include:

• Benefits of the position
• How long the term of board member is for
• General duties
• Weekly time commitment
• Legal / Financial commitments
• Qualifications / Skills requirements

This is also a good time to note that board members are typically not paid, and are often expected to contribute financially to the organization. When writing up your job description, it is a good idea to mention this. If you do decide to pay your board members more than $600 a year, you must issue them an IRS Form 1099 Msc.

Another important note is that your organization will need bylaws, which all board members must follow when carrying out their duties. Your bylaws will establish procedures for the affairs of your organization (operations, elections, conflicts of interest, etc.). To help you get started drafting your own bylaws, consider this helpful template with examples.

Once you have full job descriptions, it’s time to find the best candidates.

2) Where to Find the Best Candidates
Most new nonprofits looks for candidates from their personal connections — colleagues partners, or volunteers, as these people already have access to their community and are in line with their mission and values. However, a word of caution when approaching family and personal friends as often emotional matters can take precedence over business goals.

If you need help finding potential candidates for your board members, there are a number of great resources perfect for just that, including:

• LinkedIn Groups
• Board Match
• Board Net USA
• The Bridgespan Group

Once you have a short-list of potential applicants, the next step is to interview these people to determine the right fit.

3) How to Screen and Select Your Board Members
Before you begin interviewing, develop a standard set of questions to ask all candidates. This will help you objectively evaluate each against the other.

To help you out, here are five necessary questions developed by Joan Garry, the “Dear Abby” of nonprofit leadership to ask your candidates:

1. What do you know about our organization? Why are you interested in committing your time and energy to us?
2. What do you think are the characteristics of a great board member?
3. Fundraising is a significant obligation of board service (state give/get clearly). Can you tell us about your experience in fundraising?
4. Board members bring experience, wisdom, strategic thinking, and their rolodexes. Can you tell us about yours?
5. What kind of autonomy do you have over your calendar? There will be meetings between board meetings, occasional donor lunches.

When you conduct the interview, don’t do it alone. Gather a small committee of people whose judgement you trust to help you make the right decision.

Once you’ve selected your board members, have them sign a Board Member Contract to officiate their role. Here’s a great Board Member Contract template you can use.

The next step to ensure success is to give your board members the training and tools to let them hit the ground running. A comprehensive orientation program will do just that.

4) Five Steps to Get Your New Board Members up to Speed Quickly
Every smooth transition into a new role starts and depends on orientation.

If you need help with this, here is a great template to get you started. However, since you’re just starting out, a more simple process that you build on over time may be best. At a minimum, you’ll want to cover the following:

• An overview of the organization – its history, mission, vision, and strategic plan
• Organizational chart
• Schedule of board meetings (and locations)
• Contact information – board chair, members, staff contacts etc.

Once you’ve created your guide and materials, the next step is to orient your members. Rachel Muir, a seasoned nonprofit founder suggests five critical steps to orient your members in the most effective way:

1. One-on-one orientation. This should be done by the founder, or CEO. Include a tour, meeting of the rest of the board and reviewing of the board contract.
2. Match them with a board buddy. At the beginning, everyone will feel like the new kid on the block. Board buddies can help your new members get up to speed faster and eliminate feelings of intimidation from insecurity. Plus, one of the most common reasons people become board members is so they can network and socialize.
3. Provide them with your orientation guide. These are the materials you created in your guide. Since your board members are volunteers, take-home materials will allow them to get up to speed in their spare time.
4. Host a welcome reception. This is a great way for everyone to get to know each other, including staff, donors, volunteers, and community leaders.
5. Announce it publicly. As Rachel says, “Send a press release announcing your new board members to your local newspaper and business journal. Most have an “On the Move” section, and this is a simple, free way to get publicity for your organization and your new board member.”

A well oriented board is one of the best ways to ensure success of your new nonprofit. Once you’ve completed the above steps, it’s time to finally incorporate your nonprofit.

Step 7: How to Incorporate Your 501c3

With your business plan and board in place, you’re ready to incorporate your nonprofit. I’ve taken this section directly from the USA.gov website so that the steps are very clear:

Choose a business name: (covered in the above section)

Appoint a Board of Directors: (covered in the above section)

Decide on a legal structure: Choose whether your organization will be a trust, corporation, or association.

File your incorporation paperwork: Regulations differ from State to State. Check with the National Association of State Charity Officials (NASCO) for your state. If you plan on soliciting donations from more than one State, you will have to register there too. Generally you will have to register:

• Your nonprofit’s name
• Name and address of the registering agent (the founder)
• Address of the nonprofit
• Names and address of the board members
• Statement of purpose to which your nonprofit will operate

Apply for nonprofit federal and state tax exemptions: A nonprofit organization may be eligible for exemption from federal income tax. The IRS provides guidance and instructions on applying for tax-exempt status, but I cover more of this in the next step.

Obtain necessary licenses and permits: Does your nonprofit have all the licenses and permits needed to comply with federal, state, and local rules?

Step 8: Filing to Be Tax-Exempt

One of the main benefits of incorporating a nonprofit and starting a 501c3 is tax-exempt status. This means that your organization does not pay any tax to the IRS.

There are 29 types of nonprofit organizations that can file for tax-exemption under section 501(c) of the Internal Revenue Code. The most common of these is the 501(c)(3), which includes all charitable, religious, scientific, and literary organizations. Other types of tax-exempt nonprofits fall under different 501(c) codes such as:

• Fraternities: 501(c)(8)
• Social and Recreational Clubs: 501(c)(7)
• Trade associations and Chambers of Commerce: 501(c)(6)

If your nonprofit identifies with one of the above, or another type of organization, you can view the whole list here.

In order to receive tax-exemption, you will need to register with the IRS as your appropriate 501(c) organization. This involves filling out Form 1023, which the IRS estimates can take about 90 hours for record-keeping requirements. There is also a Form 1023-EZ, which is an expedited form. You can find out if you’re eligible to fill out a 1023-EZ here.

Here is the link to apply for 501(c)(3) status on the IRS website.

If you need help, you can phone the IRS Tax Exempt and Government Entities Hotline, or check out this guide from Donorbox.

The application process can be lengthy (anywhere from 3-12 months to receive a decision), so start as early as possible. To make sure you complete everything correctly the first time, read through these 13 common reasons why applications are rejected. You should also familiarize yourself with all related IRS resources, which offer more details on completing your application:

• Application for Recognition of Exemption
• Governance and Related Topics for the 501(C)(3)
• Life Cycle of an Exempt Organization
• Compliance Guide for 501(C)(3) Public Charities

It’s also important to note that there are fees for filing for tax-exemption:

• $600 for Form 1023
• $275 for Form 1023-EZ (a streamlined form you may be eligible for if you have gross receipts of less than $50,000 and less than $250,000 in assets)

The final step is to receive tax-exempt status for your nonprofit is to register with your state. This is usually accomplished through the state tax commission, but the IRS State Links for Exemption page will help you find the correct office, filing procedures and annual reporting requirements in every state.

By following these steps on how to start a nonprofit, you’ll have all your bases covered and be in a top-notch position for staying in compliance with both federal and state regulations. Once you are exempt, you will also be required to fill out a form 990 on a yearly basis to report your finances to the IRS and public. You can also check out this guide to filling out a 990 form for your nonprofit and helping your nonprofit remain tax exempt for more help.

Step 9: Ongoing Compliance

Once you’ve successfully incorporated your nonprofit, there are a number of things you must do every year to keep your tax-exempt status.

The first thing you must do is file a 990 Form. This form collects information regarding your revenue, expenses, board members, achievements, and other operational information. However, which form you fill out depends on your gross receipts.

• If you have gross receipts over $50,000 (or gross receipts plus total assets), file a 990 Form with the IRS
• If you have gross receipts under $50,000, file a 990-N form, or e-Postcard with the IRS

After the 990 Form, there are a number of things you must do to remain in good standing with the IRS. If you’d like to learn more, we’ve created a full checklist to nonprofit compliance here.

This is also a good time to note that before you can accept donations, or engage in fundraising activities, many states require you to complete Charitable Solicitation Registration. You can do this at the same time as incorporation.

If you and your board follow all of the compliance regulation (remember that this is part of the responsibility of the Secretary or Committee Chair), then you shouldn’t have any problem maintaining your tax-exempt status. (Just beware of private inurement.)

Now that you’ve completed all the legalities of starting your nonprofit, it’s time to set up shop.

Part 3: Setting Up Shop and Hiring Staff

In this section, I’ll cover which staff most new nonprofits hire first.

If you’d like to learn more about setting up a nonprofit office as cheaply as possible, check out this post.

What You Need To Do Before Hiring
Just like any business, your nonprofit needs to get an EIN, or Employer Identification Number, before

In fact, you’ll need this number even if you don’t intend to hire any staff. That’s because you also need it to open a bank account in your organization’s name, and fill out many of the necessary registration forms that local government requires. You can think of it as being like a Social Security Number, but for your nonprofit.

To apply for an EIN, you can visit the IRS website and complete it online, or download the form they provide and mail it in.

All you need to complete it is the physical mailing address of your nonprofit, its legal name, and your SSN.

Which Staff You’ll Need to Hire
Many small nonprofits start with only one part-time or full time staff until they reach a point where they need extra help to grow larger.

The writing association I’m part of has a few thousand members across the country, but only one part-time staff. That’s because most of the association’s value is offered through online resources, and once-a-month meetings for members in the headquarters’ city. The board is also very active in the association and many members volunteer to help see to other operations (myself included).

If you’re unsure of how many staff you will need, the best thing to do is reach out to another nonprofit of a similar size and consult them. The other determining factor on whether or not you’ll need a staff is how your nonprofit will operate. Below I’ve listed some common nonprofit staff roles and what type of organizations they’re typically found in.

• Membership Manager / Administrator: If your nonprofit will gather members (like in a club, association, or society), this role is crucial for maintaining member records, developing member recruitment strategies, and engaging/retaining members.
• Communications Manager / Administrator: If your nonprofit will greatly rely on social media campaigns, public relations (PR) activities, public speaking events, and member and volunteer management, then consider hiring someone to fill this role.
• Fundraising Manager: If your nonprofit relies primarily on government grants, public fundraisers, or corporate sponsors (like a charity or foundation), you may consider hiring someone who specializes in raising money.
• Events Manager: If your nonprofit will coordinate large monthly events, yearly conferences, and other types of events like a speaker series, or educational workshops, then an Events Manager is a must.

Even if the above positions don’t apply to your nonprofit, you should still consider hiring a general administrator either full time or part time. Just like the story of Kari Kehr, who had to shut down her new nonprofit after just a year, the failure of many new nonprofits is that they can’t find the time to do everything themselves.

“I met with other nonprofits to learn their best practices and heard over and over we would need a full time person working to grow it in order to be successful,” says Keri. “Our board of directors was made up of four women with big full-time jobs. Our passion was there, but the time commitment was not possible.”

If you do decide to hire staff, many of the steps involved are similar to the steps described in the section to gathering your board members:

1. Define Success and Build a Job Description
2. Find Candidates
3. Screening and Selection
4. Orientation

The major difference is that your staff will be paid, whereas your board members are typically not. Because of this, there are some extra steps that will need to take place. Here they are:

1. Determine how much you can spend on salaries
2. Determine whether your staff will be contract work or salaried
3. Decide what types of benefits you can offer employees. Here is a full overview of benefits you may offer for your staff.
4. Create a formalized performance review process. Here is a free template you can use.
5. Register for all necessary programs with your State, including setting up Worker’s Compensation, Unemployment Insurance, and determining if employees are eligible to work in the US. Here are some helpful resources to help you with this step:
   • IRS: Hiring Employee Guidelines
   • US Small Business Administration: Hiring Your First Employee
   • Hiring Your First Nonprofit Employee

One last tip is to take your time.

Many nonprofits are anxious to find someone right away, only to wish they had spent more time finding the right person down the road. My advice is to start the recruitment process early, and don’t settle for something that’s “good enough”. Your new nonprofit needs the best chance at success it can get, so you need someone who will be a rockstar.

Part 4: Choosing Nonprofit Software and Building your Website

In this section on how to start a nonprofit I’m going to cover how to choose the right software for your organization and everything you need to know about building a complete nonprofit website that will grow your organization for you.

How To Use Software To Run Your Organization For You
Most nonprofits reach a tipping point with the way their organization operates within their first few years — the systems and processes they originally set up don’t scale as the organization grows. Unfortunately, if you’re unable to make a drastic switch in how your organization operates, you may be closing your doors.

This happened to one nonprofit I know of, a Lawyer’s Association. At the time, the organization had reached about 300 members, but as they continued to grow, so did the administrative work (processing payments, coordinating events, data management, etc.). Unfortunately they didn’t have the budget to hire any new staff, so the current admin found himself overworked to the point that events became half planned, the monthly newsletter was dropped, and no one was seeking out new sponsors.

Fortunately, the association was able to break out of the conundrum they were in, and they’re now growing well (currently past 700 members). How did they do it? Using software.

Just like that Lawyer’s Association, it’s possible to use software like an army of robots (inexpensively) to do all the administrative work for your organization so you can focus on the activities that will actually create more member value and help you grow. You can set up software to automatically:

• Allow members to join your organization and pay online
• Register attendees for events and accept online payments
• Collect donations online and send them to your bank account (or PayPal)
• Manage a database of members, volunteers, donors, and sponsors
• Update your website and email your contacts with ease

The list goes on and on. When most nonprofits reach their tipping point, they take one of two paths with software. They either:

1. Use multiple software programs to handle separate administrative tasks
2. Use all-in-one nonprofit software called membership management software to handle all administrative tasks

In the next section on how to start a nonprofit, I’ll cover why nonprofits choose one option over the other.

Option 1: Multiple Software Programs
In this option, nonprofits choose separate softwares to run separate administrative functions. For example, they get a finance software to help with finances, an event software to help process registrations and payments, and an email software to send out newsletters, etc.

If you’re considering using multiple software programs to manage your nonprofit, here are some of the advantages and disadvantages of doing so, along with two types of nonprofits that typically take this route.

Advantages:

• Freedom to choose or switch software whenever you like.
• Many softwares offer a free version for low-usage customers.
• Only use and pay for what you need.

Disadvantages:

• You will have to learn how to use and teach others how to use multiple systems.
• No integration between platforms, so you will have to copy and paste data between systems.
• May end up more expensive in the long run as each software will require pay upgrades as you use them more.

The two types of nonprofits that typically prefer multiple software programs are:

1) Nonprofits with very limited software budgets (<$500/year)

In this scenario, the staff at the nonprofit will start off completing all processes by hand. As the nonprofit’s budget grows, so does the amount of software they are able to purchase.

2) Nonprofits with highly technical staff

If you’ve got a “techie” on hand, they likely have the expertise and sometimes a preference to learn multiple systems. Some techies even like to write their own code to help automate tasks like scheduled email reminders. If you do have a techie on hand, one thing to consider is a transition plan in case that person leaves your organization. I’ve heard a few stories where a nonprofit is left high and dry after no one in the organization knew how to take over the highly-customized processes setup by a past techie.

Regardless of your reason to choose separate softwares to run your organization, here are some common programs I’ve seen nonprofits use:

Email your contacts, members, and donors

Gmail: Free, paid for upgraded plan

• Gmail gives you basic email service. Once you grow past 100 members, you may find that Gmail becomes more trouble than it’s worth to send customized messages to large groups of people and you may consider upgrading your service to another email provider like MailChimp (paid).

Accept and process donations online

DonorPerfect: Paid

• This is a comprehensive online donation processing software.

Create nonprofit policies, documents, and files

Microsoft Word Online: Free

• Word offers document writing and editing on the cloud. You will need a Live account to use Microsoft Word Online. Another option is to use Google Docs for a more basic platform.

Create and manage a contact database and keep track of budgets and finances

Microsoft Excel Online: Free

• Excel is great for building a basic contact database and financial management. You can also use Google Sheets for a more basic platform. However, once you grow past 250 members, Excel and Sheets will become more trouble than they’re worth (even though they’re free) and you may want to explore membership management software.

Create and manage online event pages and registration

Eventbrite: Free for free events, paid for paid events

• One of the most popular options for online event management.

Online accounting and financial management

Quickbooks: Paid

• An easy way to do all of your basic accounting and financial management.

Create and update your nonprofit’s website

WordPress: Free for basic, paid for upgraded accounts

• WordPress is the most popular choice for website management. They also have a number of plugins for online membership forms and other functions.

Accept online transactions for membership, events, donations, and sales

PayPalaid

• A basic online system for collecting member dues, donations, and event payments.

One word of caution: if you choose to go with multiple software options, be sure to evaluate the total cost of all the different systems you use. As your nonprofit grows in membership and transactions, you may be required to upgrade your payment plan for each individual software.

Option 2: All-in-one Nonprofit Software – “Membership Management Software”
All-in-one nonprofit software is called membership software, association management software, or membership management software. Just to be upfront, Wild Apricot is a provider of membership management software (the most popular too!). We regularly help new nonprofits attract, engage, and retain members in order to grow.

If you’re unfamiliar with membership management software, think of it as a one-stop shop that can handle all the administrative tasks in all areas of your organization. You won’t need to purchase any additional softwares. Membership management software enables you to:

• Create and manage a contact database including members, donors, and sponsors.
• Create and manage online event registration and payment
• Accept and manage online donations
• Create and easily update a membership website for your nonprofit
• Allow new members to join your organization through your website
• Automatically create financial reports
• Process payments without needing an external vendor
• and more.

Here are some advantages and disadvantages that come with using an all-in-one system.

Advantages

• Integration between functions (the events module integrates with the database module, etc.) means that you save time and don’t have to switch back and forth between systems.
• Lower costs in the long run as you’re only paying for one system. You also only have to learn one system.
• The software is setup for nonprofits to hit the ground running and caters specifically to nonprofit needs.

Disadvantages

• It’s hard to get highly customized, advanced functionality if your nonprofit has very specific needs.
• It’s hard to switch software providers since all your data is stored in one database.
• It doesn’t integrate well with other softwares if you do choose to buy other software.

If you’re thinking of choosing membership management software to run your organization, here are five considerations to help you decide which provider to go with:

Price Structure

• As your contacts, members, and transactions increase, so does the cost of membership management software. Be sure you’re comfortable with the pricing structure of the software you choose. If you’d like to get a good feel for what membership management software might cost you, I encourage you to check out Wild Apricot’s pricing structure.

Integration with Other Systems

• Many nonprofits who choose membership management software still prefer to build their website on WordPress, or send their emails through MailChimp. It all depends on your preferences. If you choose to do this, research whether the membership management software provider you go with offers integration with that software. Wild Apricot for instance integrates with WordPress and Quickbooks.

Support

• Some providers offer free support, while others offer paid support. Most nonprofits need some help setting up their database and membership levels at the start with their chosen provider. If you are very tech-savvy, you may not care about needing support, but if not, be aware of how much support might cost you. Wild Apricot offers free, unlimited support.

Setup Fees

• Some providers charge setup fees, while others don’t have setup fees. Be sure you know if your software does before choosing. Wild Apricot does not charge setup fees, and even has Coaches who can help you get setup right away for free.

Ease of Use

• Some systems are more complex than others. Before you choose your software, see if you can give it a test drive. Wild Apricot offers a 30 day free trial to help you get comfortable with how the system works before you upgrade.

Whichever you choose — multiple software, or membership management software, there’s no doubt that software can drastically change the output of your organization. In fact, here’s the story of how one nonprofit tripled their membersby using membership management software.

How to Get Free or Discounted Nonprofit Software
Before you purchase software for your nonprofit, make sure that you investigate whether you may be able to get it free or even at a discount. Here are four ways to do that:

1. Contact TechSoup, an organization that distributes software to nonprofits for free or a discount.
2. Browse this list of 199 free or cheap software tools for nonprofits.
3. Contact the software provider’s sales staff. Often companies provide a discount for registered 501(c)(3) nonprofits.

Once you have your new nonprofit software set up, the next step is to start creating a presence for your organization to start attracting members. The best and easiest way to do that is to start with your website. In the next section on how to start a nonprofit, I’ll cover how to get your website to grow your organization for you and what fundamentals you’ll need to include for it to be complete.

How to Build a Website That Grows Your Organization For You
I joined the writing association I’m part of without ever speaking to anyone from that organization. I simply typed “local writing association” into Google and clicked one of the first results. About fifteen minutes later, I had paid for a yearly membership.

Just like my writing association, setting up a website with a good understanding of what potential members and donors want can help you grow quickly by attracting members right from the internet.

What Potential Members Want
Potential members want three main things:

1. They want to know you have a thriving, engaged community. Research shows the number one reason anyone joins an association is because they want the opportunity to network with like-minded individuals. If you can prove this on your website, there’s a great chance someone will join online. You can showcase this by doing the following:
   • Including pictures of members and events
   • Member testimonials and quotes about the value your organization offers
   • Information about upcoming events
2. The second most important thing potential members want is access to specialized information, or educational content. You can attract new members on your website by publishing industry reports, educational webinars, or creating a members’ only section with restricted access to valuable resources.
3. The third thing potential members want is instant access and an easy way to join and pay for things online. Why? Online shopping and same day delivery has made people expect instant gratification from the organizations they interact with. I’ve seen nonprofits fall behind, because they require all new members to download a PDF form, print it out, physically fill it out, and then mail it in — a process that can take a whole week. On the other hand, I’ve also seen organizations who’ve modernized this process by allowing new members to join online. The result? An instant increase in members and event registrations (here’s the story of a ski club that sold out in record time after accepting online payments).

What Potential Donors Want
Potential donors also want three things. And the nonprofits I’ve seen focus on these things have been successful in growing their online donations. Overall, potential donors want:

1. To know your organization’s mission. This lets potential donors know why you exist and why they should give to your organization. In fact, this information is the most important thing potential donors want to know before donating.
2. To know where their donations are going. Research shows the number two thing potential donors need before making a donation is to feel comfortable about where their donation is going. Including explicit information on the breakdown of what happens to a donation can help increase donations.
3. The last thing every online donor wants is similar to what members want — an easy way to donate. Nothing is more frustrating than multiple steps, downloadable forms, or complicated processes. A simple donation button, or form with instant online payments is best. If you’re looking for tips to make your own donation page, I’ve written a full guide here.

If you craft your website with the right information and allow online registration and donations, your website will start to grow your organization for you. This is a concept we talk a lot about at Wild Apricot, because we’ve seen how drastic the results can be if done right. If you’d like to learn more on how to do this, we have a free webinar called, Turn Your Website Into a Membership Growth Engine, which covers:

• Three website changes that will start attracting new members right away
• How to get anyone on your board to easily make updates by themselves (even if they don’t have any tech experience)
• The top website features our most successful clients use to drive membership growth

In the next section on how to start a nonprofit, I’ll cover the rest of the pages your website needs to be complete.

What Pages your Nonprofit Website Needs to Be Complete
Now that you have an understanding of what people want, the next thing to do is to build out your website.

From studying hundreds of nonprofit websites, I’ve seen that there are 22 features the best nonprofit websites have in common.

You can check out that page for a full list, or keep reading for the abbreviated version.

Here are the most common pages I’ve seen:

Homepage

• Think of this page as a one-page pitch to get someone to join your organization or donate (so include buttons to join or donate). Besides that, many nonprofits include recent news, featured members, upcoming events, and lots of pictures.
• Here’s an example of a great homepage from Livestrong.

About Us

• This is where your mission, vision, history, staff, and general information about your nonprofit goes.
• Here is an example of a great About Us page from the Greater Kendall Business Association.

Join Us

• This page has all the information about what a new member might need to know before joining your organization as well as the online form to join.
• Here is a great example of a Join Us page from the Kapolei Chamber of Commerce.

Donate

• This page has all the information about what a potential donor needs to know before donating to your organization as well as the online form to donate. Here’s a complete guide on how to build this page out.
• Here’s an example of a great donation page from Rotary.

Events

• The best way to make this page is to simply host a calendar of upcoming events where people can register. It’s also a good idea to list some benefits of joining one of your organization’s events.
• Here is an example of a simple event calendar from the Wayne County Chamber of Commerce.

News/Blog

• This is the area for you to post important updates about your organization. If you need help building up your blog traffic, here’s my formula and advice for doing it: How I Quadrupled My Nonprofit Blog Traffic in Less Than 1 Year

Resources (if applicable)

• If part of the value your organization creates is from publishing resources, this is the place to host them.
• Here is an example of a good resources page of publications from the Medical Library Association.

Member-Only Area (if applicable)

• This is where you give restricted access to resources intended for members only.

Contact Us

• This page includes basic contact information for your organization.

While these are the most common pages for nonprofit websites (and most websites admittedly), whatever pages you decide to publish, having an organized structure will allow website visitors to find information faster, and can even boost your search engine optimization results.

One more point is to make your nonprofit website accessible to all visitors, including those with disabilities. Air-Rallies, a global web accessibility awareness and skills development program gives some tips on how to make a website accessible to all:

• Videos have captioned text, so that those with hearing impairments can still get the message you are trying to communicate.
• All links use descriptive text; instead of “click here”, you say “Here is a list of our staff,” for instance.
• Within the HTML for a web page, all photos and graphics have “alt” tags, allowing someone with a sight impairment to hear, via their screen reader, what graphics and photos are on a page.
• All text that is within a graphic is also represented as text somewhere on the page; for instance, the name of the organization may be a part of the logo, but it should also be found as text on the page, so someone with a sight-impairment can find the name of your organization.
• There is not a need for a mouse in order to navigate web site or online feature.

And if you find creating your own nonprofit’s website is overwhelming, you have a few options:

• Build your website using a membership website builder, which is an easy-to-use, drag-and-drop system, ready with all the pages and templates your organization will need (including membership forms, event calendars, member only areas, and more)
• Create your website with WordPress and use plugins for all the membership-related modules (like membership forms) you’ll need
• Hire a freelancer to build a website to your liking.

Once your website is set up, you’ll have a base to start building your online presence and attracting new members and donors. The next step on how to start a nonprofit is to setup your social media channels to increase your organization’s awareness.

[paste:font size=”4″]Which Social Media Channels You’ll Need to Set Up For Your 501c3
Below is a screenshot of the Google results when I searched “Livestrong Foundation”. Notice how many of the top results are actually Livestrong’s social media profiles?

That’s because Google treats social media profiles with high importance when determining what to show in their rankings.

If you take the time to set up social media profiles for your organization, you’ll be able to see the same result, which can instantly increase awareness of your nonprofit on Google when you’re first starting out.

On top of this, the rise of the internet and smartphones has actually decreased people’s attention spans, making it harder for nonprofits to stand out and get their your message across. This means that your organization must have multiple presences across different social media channels. People check their phones 80 times a day, and if your organization doesn’t come up in their feed, they’re not going to think of you.

There are three social media platforms that I recommend you set up first for your nonprofit: Facebook, Twitter, and Linkedin. These social media platforms are some of the biggest and also relatively easy to set up and maintain. Here are three step-by-step guides to help you create your social profiles.

• How to Create a Nonprofit Facebook Page
• How to Create a Nonprofit Twitter Account
• How to Create a Nonprofit LinkedIn Page

Once your social profiles are set up and your website is ready to go, it’s finally time to start attracting members.

Part 5: How to Get Your First Paying Members[/paste:font]

At this point, everything for your organization is setup:

• You’ve created a business plan
• You’ve got strategies in place to start generating revenue
• You’ve registered your nonprofit
• You’ve hired your board and staff
• You’ve set up your website and social profiles

And while completing all of that is a lot of hard work, going through the process of trying to attract your first paying members will put your nonprofit through the gauntlet. This is the real test to see if your organization will create enough value in your community.

So, if I asked you to recruit 100 for your organization by the end of the month, would you be able to do it?

A lot of the time, when I ask this question, I get responses like, “I’ll need a bigger budget,” or “I’ll need more time to come up with a full marketing strategy.”

But, I know many new nonprofits who have gained a hundred members or more in under a month with a little creativity and a good understanding of their target market. While I definitely recommend planning out a full marketing strategy and budget to attract new members, in the early days you won’t have a good understanding of which tactics will or will not work so you’ll need to get creative, try new things, and move on quickly when something isn’t working.

Take for example, Sarah Rintamaki, the Founder of Connecting for Kids, who faced a similar challenge. When her son was diagnosed with a rare genetic disorder, she started a nonprofit to support the educational and emotional needs of other parents like her. At first, Sarah tried and tested a number of tactics to attract members, and some of them worked alright, but she stumbled upon one tactic above all others got the attention of every parent in the city. And the best part was it cost virtually nothing.

Sarah spoke with the principals of every public school in her region, and got permission to send informational flyers home in the backpacks of every child. It seemed to work right away and in just three years, her flyer strategy had been crucial to gaining 700 new members for her organization. This spike in new members also led to revenue growth from just $14,000 a year to over $100,000 a year.

Just like Sarah, it’s important to brainstorm, get creative, and try new things quickly. To help you get the wheels turning, here are a number of tactics that nonprofits often find successful in attracting new members to their organizations.

• Email everyone you know and ask them to become a member, and ask them to pass the message on to all their contacts.
• Host an open house networking event and invite everyone you know.
• Publish industry resources online and drive website visitors to them through blog posts, emails, social media, speaking events, and news publications. In fact, this is the strategy used by a growing nonprofit run by Dr. Samuel Dryer. Every year he publishes an industry salary survey which people must become members to access. In just four years, this tactic grew his organization from 12 members to over 500.
• Connect with similar organizations in different cities to ask how they attract new members.
• Work with a Public Relations agency to get into local newspapers, radio stations, and breakfast television shows.
• Join established communities where your target market is (like Facebookor LinkedIn Groups, Meetups, or similar events) and notify them there.

I’ve also heard of a number of low-cost, highly creative ways to get the word out, including:

• Leaving informational bookmarks at your local library’s check-out desk.
• Placing coloured stickers on new members’ watches to remind them to tell their friends about your organization.
• Sending care-packages to your local radio hosts to get them to mention your organization on the radio.
• If you’re still stumped on where to start, here are 101 more ideas.

Whatever tactics you start with, the most important thing to remember is to adjust quickly. As soon as you are able to get even one member to join, interview them to discover where they found out about you and what was their main reason for joining. Then do more of those activities that attracted them in the first place.