Do you have a plan to start a nonprofit? Although starting a nonprofit is similar to starting any kind of business, but starting a nonprofit is an exciting entrepreneurial attempt. You will also need government’s obligation to follow. After finalization of the structure of your nonprofit, you have to proceed to obtain the several government affiliations.
Here are a description and procedure for your next step to do. Rules and procedures are applicable for America based nonprofits or those who want to work with America.
Market research and business plan: A strong market research is needed to identify your organization from over 1.4 millions nonprofit nationwide. Your research will help you to find out the category and demand for your nonprofit. Like other business, nonprofit should have a dynamic business and strategic plan. However, research is the great way to learn about fund generation strategy applied by other nonprofits. Therefore, scope of research should include in your business plan.
Cost Analysis- It depends on your organization’s financial strength. A good research and business plan will help to establish a good portfolio to grow up your organization.
Incorporation: Incorporation for nonprofits is same as other organization. Nonprofit organization gets some extra benefits through incorporation, like tax-exempt status. If your nonprofits have a wide mission, high level of liability or have a potentiality to work on a larger financial scale, then incorporation of the nonprofit will support towards granting limited liability, and will make protection shield to your board members and staffs. Through Incorporation, your organization will qualify for more grants and have more legal credibility.
Cost analysis-The cost for filing of nonprofit Articles is 25$ to 100$ depend on in what state you filing for. If your nonprofit have low risk and short-term mission, then it is not compulsory for you.
Corporate name and Trademark: When your nonprofit registered with the Secretary of State, it will protect your name to use by others and give legal protection. On the other hand, a trademark is an owned property of unique brand, allowing exclusive rights to the trademark.
Cost analysis-The cost for registering business name is less than 50$.The cost for state–level trademark is about 100$. In both cases, you should have to apply through the Secretary of State. Although trademark cost is so high with complicated application procedure, but it secures high legal strength in the field of nonprofit industry.
Federal tax ID (EIN): If you want to pursue incorporation or 501(c)(3) status, you need a federal tax ID (EIN). If you have a plan to pay your employee or want to become a 501(c) (3) holder, an EIN (Employer Identification Number) is required. It will help for filing aspects of incorporation.
Cost analysis-To get an EIN is free so being aware about the sites who ask a fee for an EIN.
501(C)(3), Tax-exempt status: Section 501(c) of the United States provides that some federal income taxes are exempt for 29 types of nonprofit organizations. If your organization has a long-term mission and officially established, then you have to pay attention on fundraising where 501(c)(3) status will give you a wider avenue to raise funds for your nonprofit. Although fundraising is a biggest challenge for nonprofits, but 501(c)(3) status gives you extra support by which your nonprofit gets tax-exemption. It is also mentionable that you don’t need to incorporate to be eligible for 501(c)(3) but incorporation is a plus to getting tax-exempt status.
Cost analysis- It may vary from state to state but usually it 75$-100$
Basic insurance coverage: It is an important issue for a nonprofit to buy insurance. All nonprofits should need to purchase some kind of insurance, like General Liability Insurance, Property Insurance, Auto Insurance, Product Liability Insurance etc. An exact cost varies wildly according to your insurance structure.
Cost Analysis- Cost varies $800–1,500 (General Liability only)
Website: Now a day, every nonprofit need a website as it is a useful tool for fundraising. A website connects your nonprofit with millions of folks who have an intention to make a difference. Nonprofits should make a website that looks great and is easy to use, but they also need to inspire visitors to take action and support their programs. Therefore, you should consider a good amount for your website design and maintenance.
Cost Analysis- Typical cost 50$ – 3000$ for website design and a yearly maintenance cost including domain and hosting charge. While we discussed about expenditure to start nonprofits, we can consider below resources which might be help you to cut your expenditure partly or full.
Google for Nonprofits: You can gain a lot of benefits through qualifying the Google for Nonprofits program, including free Google Adwords advertising. Thorough this program, you will able to gain valuable traffic to your nonprofits website which gives you opportunity to further fundraising.
Apply here: google.com/nonprofits
Nonprofit website grants: If you have a new website for your nonprofits or if you want to redesign it, then you can apply for the Digital Community Foundation Grants. Although DCF grant would not cover all expense of your nonprofits website, it will definitely save your budget for designing of website.
Apply here: digitalcommunityfoundation.org