Let’s start this launch process with a solid definition for a nonprofit.
A nonprofit is defined as an organization that exists to serve a community or advance a social cause. It can be a ministry, club, society, trade association, social advocacy group, or charity.
Unlike for-profit businesses, nonprofits don’t distribute profits to their shareholders, but instead, funnel them back into their operations. It’s also important to note that nonprofits typically have an ongoing mission and are established without an end date in mind.
Here are 15 Steps to Start a Nonprofit
1. Hear from God. Are you called?
Nonprofits are a lot of work and take commitment to successfully impact the world around us. Believe me, there are plenty of challenges along the way. It is important to know God has called you to start a christian nonprofit, and how much you will need to lean on Him from the very beginning.
And we know that for those who love God all things work together for good, for those who are called according to his purpose. Romans 8:28 (ESV )
2. Research
Is there a need? Are there any existing organizations already addressing this need? Are there other considerations to keep in mind? What are the required steps to starting a nonprofit?
- Is starting a nonprofit really feasible for you?
- Do you have the time and energy to devote yourself to starting this nonprofit?
- Do you have a cause that people would be excited to support?
- Do you have a few people in mind who’d be excited to join your board and commit themselves to your organization’s success?
- Do you have enough money to cover the startup costs?
- How are you planning to fund your nonprofit?
3. Vision and Mission Statement
A vision statement is a description of your end goal—what is the purpose of your nonprofit? This will be a motivator and a driving force for your day to day and team activities.
Your christian nonprofit’s mission statement is a brief description of what you do and why you do it. It plays an important role in your organization’s success because it tells people why your work is worth supporting.
4. Name your Non-Profit
Choose a name that is easy to remember, explains what you do, and sounds appealing.
The best nonprofit names answer three questions:
- My nonprofit will…?
- My nonprofit helps…?
- Our members are…?
Once you’ve picked a name, make sure another organization doesn’t have the same name by doing a quick Google search. Then, you’ll need to check if it’s available with the Secretary of State in your State.
5. Form a Board of Directors
You will want to recruit the best people you know for your Board of Directors, and ensure you trust them to have your best interests at heart.
A good board should be evenly split between:
- Members who are comfortable asking for donations within their own networks.
- Members who have expertise in finances, marketing, and legal matters.
- Members who are connected at the community level and have expertise in your service field.
6. Incorporate
- Choose a business name.
- Appoint positions.
- Decide on a legal structure: Trust, Corporation or an Association.
- File your incorporation paperwork: Regulations differ from State to State. Check with the NASCO (National Association of State Charity Officials) for your state. If you are in multiple states, you may need to register there, too.
- Get an Employer Identification Number (EIN). Just like any business, your nonprofit needs to get an Employee Identification Number. IRS requirements are only the physical mailing address for your nonprofit, its legal name and your SSN.
7. File for Tax Exemption
One of the main benefits of incorporating a christian nonprofit and starting a 501c3 is tax-exempt status. This means that your organization doesn’t pay any tax to the IRS. There are 29 types of non-profit organizations that can file for tax-exempt status under section 501(c) of the Internal Revenue Code023.
The application process can be lengthy (anywhere from 3-12 months to receive a decision), so start as early as possible. Filing fees apply for this necessary step to starting a nonprofit.
8. Build a Foundation
As the Founder, you will decide who will be involved in your nonprofit. Starting a nonprofit is a huge undertaking, and you can’t do it alone. Make a list of roles you need to fill—board members, volunteers, and even a few staff members. Make sure to check your local requirements for how many board members you need to recruit, as this can depend on your location. Also think about someone who can offer legal advice, help fill out paperwork, a mentor, financing, marketing, fundraising, and more.
9. Do a BMGC and Written Business Plan
A BMGC (Business Model Generation Canvas) is a tool to help you create a business plan. Your written business plan is the blueprint for how your nonprofit or business will run and how you’ll achieve your goals. It’s helpful for your planning purposes, but also anyone who is considering supporting, being on the board, or providing financing for your organization. They could request to see your written business plan before making their decision.
This is something you build as part of the WealthBuilders Business Coaching Program and includes multiple parts to help you succeed in your nonprofit or business.
https://www.wealthbuilders.org/business-coaching
10. Revenue Streams and Fundraising Strategy
The BMGC revenue streams section will help you tremendously with thinking about how to build and sustain revenue for your nonprofit. Most nonprofits do this in three ways:
- Providing value
- Fundraising
- Government Grants
One of the things we encourage is looking at ways to fund your ministry through BUSINESS.
MOST IMPORTANT: You must have a plan and strategies in place to fund your nonprofit.
Related Post: Profitable Nonprofits: How to Fund Your Ministry
11. Develop Brand and Identity
Think about things like your logo, the voice and tone of your messaging, brand colors, and design guidelines. A strong and well thought out brand will help you stand out and be easily
recognizable and memorable.Have your team do a Creative Document exercise to help you identify your target market, its needs, your organization’s “elevator speech,” tag line, creative elements, and more. This is also part of WB Business coaching.
https://www.wealthbuilders.org/business-coaching
12. Hire a team
An important step in starting a nonprofit is hiring staff. Many small nonprofits start with only one part-time or full-time team member until they reach a point where they can fund additional help. Here are some initial nonprofit staff roles and the type of organizations who need them:
Administrator: To help set up systems, including operations, financial reporting, website, email and social media, infrastructure, and more.
Marketing Specialist/Contractor: If your nonprofit will greatly rely on social media, website, emails, media, events, volunteer management, etc. then consider filling this role as soon as possible.
Fundraising Specialist: If your nonprofit relies primarily on donations or grants, you will need someone with this expertise.
Events Coordinator: If your nonprofit will hold small events, conferences, and other types of events like a speaker series, or educational workshops, then an events coordinator or contractor will help immensely.
Finance, Legal, HR, Accounting, IT Operations Specialist: Every nonprofit needs expertise in these areas, whether you hire an operations person or contract out, it will be necessary to have these areas covered in your team.
13. Non-Profit Software and Reporting
There are good, inexpensive options available for start-up nonprofits, and if you start out with systems in place where possible, it will make things easier as you grow. With the reporting and donor communication required for nonprofits, as well as website, email, and other outward facing items, building a system from the beginning will save you time and money
down the road.
14. Plan and Prepare for Growth
Document a 1, 3 and 5-year growth plan and revisit it throughout the year with your key team members and Board of Directors.
From the BMGC, build out the current and future revenue stream possibilities so that you are consistently in a forward movement looking to the future. Invite and reward innovation from your team, and be sure you are not just spending time in your business, but you are purposely setting aside time to work on your business.
Related Post: 3 Sources of Funding for Nonprofits and Churches
15. Ongoing Compliance
Once your nonprofit is up and running, there are a number of things you must do every year to keep your tax-exempt status.
File a 990 Form. This form collects information regarding your revenue, expenses, board members, achievements, and other operational information. If you have gross revenue receipts over $50,000 (or gross receipts plus total assets), file a 990 form with the IRS (there are exceptions to this, like the association of churches). If you have gross receipts under $50,000, file a 990-N form or e-postcard with the IRS.
For more in depth information, check out the WealthBuilders University course: Navigating Nonprofits, taught by Billy Epperhart and David Lapp.
Billy Epperhart has started several nonprofits, including WealthBuilders and Tricord Global, and David Lapp is the CEO of Blessings of Hope, a nonprofit that provides the equivalent of 50,000 meals every day to people in need. https://wbuniversity.online/courses/navigating-nonprofits/
Learn more about WBU here: https://wbuniversity.online/
