Non-Profit | The Biz Knows

Starting a Non-Profit

A non-profit business is like a for-profit organization in the sense that it strives to provide customers with valuable services, requires adequate leadership, and needs enough funding to successfully operate. However, unlike businesses that operate for financial gain, non-profit corporations must serve the public and are required to re-invest funds back into the organization. Initiating the process may seem overwhelming, so we’ve put together a list to help as a starting point.

Research is a must. Are you sure non-profit is the best business structure for your organization. Consider your personal and professional goals. You also need to ensure your desired business qualifies for non-profit status. And check to see if there is a need in the community and if so, find out if another organization already exists. There may be an option to work with an existing organization or even allow them to be your financial sponsor permanently or temporarily until your non-profit is fully established.

Write a business plan. A non-profit is a business, so you’ll need to take some of the same steps as would be necessary when starting any other business. A business plan is a vital tool to any organization. In order to succeed, you need to have a well thought-out plan. Also, prior to writing the business plan, be sure to read 501(c) requirements.

Register your business. State and federal governments heavily regulate non-profits to guard against fraud. You’ll need to register articles of incorporation, obtain a federal EIN, write board bylaws, as well as meet all other licensing and incorporation requirements in the state where the non-profit will operate. Seek assistance from experts if needed.

File for 501(c) status with the IRS. Copies of the company’s incorporation documents are usually required when applying to obtain non-profit status.

Check eligibility for 501(c)(3), which allows contributors to make tax exempt donations. Organizations must operate exclusively for religious, charitable, scientific, public safety, literary, educational or amateur sports purposes, or for the prevention of cruelty to children or animals.

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