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7 steps to starting a nonprofit organization

When one of our principals got invited to sit on the board of the Fletcher Foundation, they were so honored and excited. They were there early on, so they got to see and be a part of starting a nonprofit organization. Don’t get us wrong, there are challenges, but if your deep passion meets the world’s deep needs, it might be time to start a non-profit organization.

Here’s how!

1. Find your “why” – What’s your story?

Not that we are big readers of Fredrick Buechner, but a quick Google search revealed that this pastor/poet is the one who is noted for saying that vocation is “the place where your deep gladness and the world’s deep hunger meet.” That, my friend, is your “why.” Simon Sinek is great, too – but give credit where credit is due, right?

Every nonprofit starts with a story… what is yours? What problem do you want to fix or issue you want to resolve? Maybe a nonprofit is the right choice for handling that challenge.

Friends of ours, Matt and Haley Phillips, understood when their deep passion met one of the world’s deep needs. After losing their son Fletcher to stillbirth, they knew they wanted to do something to bring meaning out of that loss. Once they started receiving the hospital bills, they knew they wanted to start The Fletcher Foundation to help families pay their bills after miscarriage or stillbirth.

Your “why” often comes from personal experience with that deep need out there in the world. So that “why” is the starting point of your nonprofit.

2. Taxes/IRS/501c3

Helping people in a systematic way requires a system. It requires an organization. Money is going to be flowing in and out, which captures the government’s interest. So if you’re going to start a nonprofit, you have to organize as a legal, nonprofit entity.

There are many different types of nonprofits. The most common is 501(c)(3) but the IRS code goes from (501(c)(1) to (27)! Take a look at the designations to decide which one is right for your organization. You will need to file articles of incorporation with your state as well as your nonprofit paperwork with the IRS. This is tedious but doable. You can do it by yourself, use an attorney, or a 3rd party platform that helps with covering all the details (rocketlawyer.com).

3. Board/Staff/Budget

Getting the right board in place is so important. You want to put people on the board who can fill the initial skill and knowledge gaps you will have. You want people who have strong ties to and affinity for the mission. Look for people that are motivated and are eager to help and learn. The ideal board member will bring time, talent, and treasures to the room –  hopefully, all 3!

How big should your board be? Some states have requirements around board size. The Fletcher Foundation started with 3 and recently upped it to 6. We would recommend at least 3 when starting out.

Usually, in this initial stage, everyone is working as a volunteer. But you will want to plan as soon as possible for staffing, be it part-time, project-based or full-time. Also at this stage, you will want to create a budget so you know how much money you will need to raise and how you want to allocate the funds that come in.

4. Website/Messaging/Communication

If you are passionate about what you are doing and have a genuine need to fill, there are others out there with a similar passion and similar need. They need to know about you. So step 4 is all about getting the word out. You’ll be tempted to skimp on this and just plug in some information on a free website template. Don’t do that. You need a professionally put together premium website that CLEARLY tells your story and your mission.

The Fletcher Foundation was blessed to have a well-qualified web developer volunteer to build out our site for us. You will need to have someone that has experience with this on your team or someone on retainer that you can go to with questions/updates constantly, especially in the beginning years.

How are you going to communicate your message? We would recommend a Facebook page to communicate constantly with those that are following you and have bought into your mission so they stay informed, tuned in, and excited about your mission.

5. Funding

How are you going to be funded? This may be determined by the type of nonprofit you are.  Will funding be private, public, or a mix? Especially with securing grant money from foundations and funding from government agencies, there will be guidelines and hoops to jump through. But if the funding source fits with your mission, go for it!

You will need to do some grant writing as one source of funding for your nonprofit. If you don’t feel you or anyone on the board has the expertise for this, find someone who does. Knowing where to ask for funds and understanding the strict criteria most granting bodies require you to follow will ensure that you get taken seriously by potential donors.

6. Work your mission

This is all about accomplishing a mission, but this is also about sticking to the mission. Make sure you are documenting everything – your successes and failures. Make sure you have regular communication and meetings with your board members to brainstorm pain points and growth ideas. At The Fletcher Foundation, there is a constant flow of communication with the team about issues and tasks that we are working on together.

Just like running a business, it’s easy to get caught up in the day-to-day of running a nonprofit. You need to make sure you take time regularly to reflect on how you are working the mission.

7. What’s your growth plan

It is a good idea at the end of your first year to reflect on what went according to plan, what could be tweaked, and what needs to be completely redone. THIS IS OK and all part of growing your nonprofit.

Next comes the question of scale. Do you want to stay small, get bigger, or stay the same? What is the plan? Do you need to hire staff and/or bring in more board members? Doing some reflection and building a plan for the future are crucial for staying on-course and building your organization into what you want it to be.

Starting and running a nonprofit organization is exciting. It can be life-giving and emotionally draining all at the same time. But having some steps to follow should help you decide if this is a path worth exploring and provide some guidance for getting started!