Launching a nonprofit organization requires careful planning and compliance with regulations. The document outlines key steps including defining the mission, recruiting a board of directors, incorporating as a nonprofit at the state level, and applying for federal and state tax exemption. An experienced attorney can help navigate the incorporation process and identify any issues with draft documents to help gain swift approval. Seeking professional advice is also recommended when unfamiliar with nonprofit regulations.
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Launching A Nonprofit
1. Launching a Nonprofit
By: Alpa Patel
Launching a nonprofit? If you want to start a not-for-profit organization, this article on
starting nonprofits is a must-read.
The decision to launch a nonprofit organization is an exciting step for an entrepreneur.
But taking your organization from the drawing board to your first board meeting takes
more than a good idea. It requires knowledge, discipline, and a lot of hard work. Here's
how to get started...
Right off the bat, you need to understand that nonprofits are subject to specific
regulations governing their operation. Much of the startup process involves laying the
groundwork to bring the organization into compliance and gain necessary approvals from
state and federal government.
Define Your Mission
Your organization's stated mission is the initial litmus test for qualification as a nonprofit
entity. A legitimate nonprofit must be "organized and operate for some religious,
educational, charitable, scientific, literary, testing for public safety, fostering of national
or international amateur sports, or prevention of cruelty to animals or children".
Additionally, your mission should be comprehensive enough to encompass the complete
scope of your activities, but specific enough to differentiate yourself from other
organizations.
Recruit a Nonprofit Board
Like for-profit corporations, incorporated nonprofits are governed by a board of directors.
Carefully consider who you will invite to sit on your board since the initial board
members will be instrumental in your organization's development and fundraising efforts.
On the other hand, don't procrastinate in selecting board members, either, since your
incorporation documents will require individual board members' names and addresses.
Nonprofit Incorporation
You don't need a lawyer to incorporate a nonprofit organization - but it helps. The
incorporation process requires the completion of several forms and documents. The first
step is to draft articles of incorporation and bylaws that have been approved by your
board. With these documents you can then file for incorporation with the state in which
the organization resides. But here's the catch . . . An experienced attorney knows the
words and phrases that are most likely to gain swift approval. You don't. If you go it
alone, there is a good chance the incorporation process will drag on for months without
resolution. At a minimum, find an attorney or experienced nonprofit professional who is
willing to examine your documents for any red flags.
2. Federal & State Tax Exemption
Tax-exempt status is one of the perks of nonprofit incorporation. But this exemption is
not automatic. You will need to apply for 501(c)(3) tax-exempt status with both the IRS
and the appropriate state agency. Although it usually only involves board approval and
filing a couple of forms, it's important to make sure you do this early in the process.
Otherwise, you may be forced to waste very limited resources on taxes you didn't need to
pay.
There are several other items you should also consider during the startup phase including
insurance coverage, property tax exemption (if the nonprofit owns real estate), a federal
employed ID number, and a bulk mail permit. Fortunately, many of these tasks can be
accomplished after your organization is up and running. Just be aware of the fact that as a
nonprofit you may be subject to different regulations than a typical business and don't
hesitate to seek professional advice when you find yourself in unfamiliar territory.
Media Contact: Alpa Patel
Phone Number: (714) 634-1992
E-mail: hello@weprint-oc.com
Website: http://www.weprint-oc.com