We all love an organization that has helped people that are in dire need of assistance in their life and this could even include yourself. Together with their team and supporters, they would go the extra mile just to provide help – assisting the needy and protecting the weak. Starting a nonprofit is a noble cause. Here’s how to get yours off the ground and keep it running efficiently with best practices.
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What is Nonprofit?
Nonprofit organizations- also known as not-for-profit organization/institution or non-business entity, are organizations that are dedicated in promoting and advocating a social cause and shared point of views. I
t is an organization that is tax-exempt. They could be formed for charitable, religious, literary, artistic, scientific or educational purposes. Financially, its trustees or shareholders do not benefit from this. Any financial earnings must be retained by the organization and utilized for its own operations, programs and expenses.
How to Start a Nonprofit
Inspired individuals like you, have a dream to start a nonprofit to help serve your community. Starting a nonprofit is not an easy task, but we congratulate your commitment to helping others.
Just like starting any other venture, you’ll need a lot of time and a lot of patience to get it off the road. There are many ways in making an impact in the society, making a nonprofit is one of them. To avoid struggling to attract fund, you need to identify and calculate the need for your specific organization. You have to research if there are other groups engaged with the same mission that you would want to work on and ensure that starting a new nonprofit is the right solution.
Here are the steps how to start one:
1. Do Your Research
- Is there a verified need in the community for a new nonprofit with the mission we foresee?
- Do we have a well-founded plan for financing the organization during start-up and in the future?
- What are the costs to start the organization?
- How will this new nonprofit deliver its influence?
- Is this the right answer for your community?
2. Establish a Solid Foundation
- WHO? Who will be involved?
- WHAT? What do you need to do?
- WHEN? When should you submit paperwork?
- HOW? How do you create and sustain a nonprofit organization?
3. Create Nonprofit Business Plan
If you’re making your own plan from scratch, there are seven major areas you’ll need to cover, links are provided to free templates you can use online.
- Executive Summary
- Products and Services
- Market Analysis
- Marketing Plan (free sample plans available on MoreBusiness.com)
- Operational Plan
- Organizational Structure
- Financial Plan
4. Your Four Main Sources of Revenue
Majority revenues form for profit organizations comes from products and services. Nonprofits differ in that they have additional major sources revenue: Here are four:
- Fees for Services and Goods from the Private Sector
- Private Contributions
- Government Grants
- Fees for Services and Goods from Government
5. How to Choose the Best Name for Your Nonprofit
The best nonprofit names are easy to remember, revealing of what they do, and sound interesting.
If you don’t have come up with a name yet, these questions will help you come up to one.
- What will my nonprofit do…? To help answer this question, write all the action words you can think of to describe your nonprofit (give, teach, heal, feed, rescue, etc.)
- Who will my nonprofit helps…? Describe the market you plan to serve (children, hungry, homeless, elderly, dogs, environment, etc.?)
- Who are our members…? If your nonprofit has a specific type of member then it may be important to include them in your name.
Save the Children is a good one.
6. How to Recruit Your Board
Who to Recruit for Your Board?
The board can quickly dismantle a nonprofit especially if they are unsupportive and unmotivated. Office drama is very common and board members scrapping the mission to not let this happen, here are some characters that should help you.
- Strong work ethic: Setting and achieving goals
- Dependable: Consistently following through
- Positive attitude: Creating a good environment
- Self-motivated: Working effectively with little direction
- Team-oriented: Making the most out of collaboration
- Effective communicator: Understanding the benefits of clarity
- Flexible: Adapting in a meaningful way
7. 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.
File all the necessary files and you will be good to go.
How to Manage Nonprofit
As the head of a non-profit, it is essential to create a working atmosphere with a team who collaborate productively with the best interest of the organization in mind.
- Strategic planning is the key to achieve success. To understand the direction of the nonprofit, it is essential to make strategic, tactical and operational plans and policies for the organization. To focus on goals, one can use weekly plans to attain objectives.
- Develop clear roles and responsibilities of the board and its members to guide all key players of their respective functions in the organization.
- Ensure that necessary resources are available to sustain the organization.
- Effective control system must be established through proper monitoring of performance, program and services of the non-profit. One strategy is the use of project plans for better communication and risk assessment.
Best Practices
Successful non-profit organizations are also made up of corporate management structures with effective governance and sound financial controls.
It is necessary for a nonprofit to have Board of Directors who provide the high-level monitoring and control. Boards should have established policies for good governance cascaded to its members, for optimal performance of the whole organization. This includes policies on planning, staffing, compensation, conflict management, among others.
The nonprofits must have experts in financial controls through auditing and monitoring of the inflows and outflows of funds. Transparency and accountability is always in mind of a responsible fundraising organization.
Research nonprofit best practices for your type of nonprofit organization to ensure sound fiscal management and growth; proper membership or donor attraction and retention; industry supplier participation; cross-organization cooperation; and other areas of specific nonprofit operations.
Good management structures and proper management principles of nonprofits is an advantage, as it can be a good advertisement to recruit more volunteers and solicit support and donations. Good planning equates good results which could only mean, having contingencies to support the main plan in order to succeed.
Collaboration also initiates members to share the passion for your organization. This could also encourage teamwork to aim for better results.
