Research, lots of it; paperwork, you bet. Hours of volunteer
work and relentless dedication; thatís just the beginning when it comes to
developing and running a non-profit organization (NPO).
There are countless organizations and charities already in
existence, but there is always a need for a spotlight to be focused on another
and it takes a very special person to shine that light. Choosing to take the
initiative to even consider forming a non-profit organization is an admirable
task. If this is something youíve considered, perhaps the following
information might help you decide if itís really something youíre ready to
First of all, what is a non-profit organization (NPO)? Stated
plainly, itís an organization that uses surplus revenues for the goals in
which it was formed to achieve, rather than distributing profits. Some NPOs may
have paid staff or management, while others run on volunteer strength alone. To
be considered a non profit and be deemed eligible for tax exempt status by the
Internal Revenue Service, an NPO must qualify under the 501c code; but weíll
get to that fun IRS stuff later.
There are two major types of NPOs; membership organizations and
those with a board only. In the case of membership, generally a board is
elected; the organization holds regular meetings and has power to amend the
by-laws established for the organization. With a board only organization, often
the board is self elected and membership powers are limited to those delegated
by that board. (wikipedia.com)
Still thinking about starting an NPO? Best advice Ė do your
research and see what, if any, organizations already exist for your cause. If
there are already some going strong, it may be more beneficial to work with them
than reinvent the wheel. If there is a need, do your homework. You need to
determine the feasibility of starting your organization. Consider the current
economic climate and what your funding needs may be. Youíll need to develop a
mission statement, create an organizational structure and draft a three year
budget. This needs to encompass your marketing plan, any salaries youíd need
to pay and other resources as well as fundraising plans. You will also want to
include volunteer needs and possible community partnerships in your business
I promised weíd get back to that super exciting IRS stuff Ė
here we goÖThere will be a bit of paperwork to fill out, most importantly
filing for tax exempt, 501(c) status, with the IRS. This is an integral
component of any NPO. It is highly recommended that you seek out qualified
assistance when forming an NPO. This isnít a time to ask Mom for advice,
unless Mom is an attorney with experience dealing with 501(c), non-profit
organizations. Legal counsel with this kind of experience will be an invaluable
asset to you if you are considering organizing a new non-profit organization and
will save you a lot of headaches along the way.
Now, you have your plan and your paperwork Ėwhatís next?
Honestly, itís time to think about implementation. How can you create and
sustain this organization? This really goes back to your business plan. If you
think that you can achieve your goals of offering reliable, sustained services
to your chosen beneficiaries (basically you can open your doors and keep them
open) in less than three years; it may be best to be housed within an existing
organization. Itís something called "fiscal sponsorship" in which
one organization shares their tax exempt status with another. (National Council
of Non Profits) In some cases, being "sponsored" by an existing tax
exempt organization allows for better success.
Of course, filing with the IRS and determining the best funding
avenues for your NPO isnít the only paperwork youíll have to complete. There
are numerous State and Federal forms that must be legally filed to get your
non-profit up and running. There are many resources that can assist with this,
Here youíll find advice from local professional advisors on starting a
non-profit, managing your organization and fundraising. If all that IRS stuff
has your eye twitching already, rest assured they do try and help in any way
they can, including providing fee webinars on tax exempt filing and other
helpful information at www.irs.gov/charities/.
Locally, you can find information on starting a non-profit by contacting the
Colorado Non-Profit Association at 303-832-5710 or www.coloradononprofits.org.
Donít let this overwhelm you. If you are considering sticking your neck out
to start a badly needed NPO, more power to you. Volunteers and those who are
passionate for their chosen causes make the world a better place. The biggest
and best non-profit organizations were once the ideas of someone just like you.
After all, Paul Newman stuck his likeness on some salad dressing bottles and,
years later, millions and millions of dollars have been raised for charity. What
simple yet sensational idea are you ready to unveil?