One of the primary differences between for-profit and nonprofit organizations is that you can easily work on your own in a for-profit business. A barber can set up a one-chair shop. An accountant can work from an office at home, or a mechanic can get by with a shade tree and a set of tools.
Not so with the nonprofit. It’s designed to bring people together, united in a common purpose. Every nonprofit must be overseen by a board of directors. Choose them carefully.
Choose Your Board of Directors
Stop and think a bit before you begin this process. Your selection of directors should take into account the problem your nonprofit is going to address. Board members don’t have to be experts in the topic, but they should certainly be sympathetic to it and enthusiastic about helping raise funding for the cause.
You should also seek to round out the board by including a representative of the various communities it will serve.
For instance, let’s say your nonprofit organization will focus on helping local landowners build gardens to grow organic produce. You might reason, then, that the board should be made up of an organic farmer, a grocery store owner, a member of the local organic co-op, a local business leader, and a consumer who supports organic principles.
Note that I listed an odd number of board members. That’s an important factor. If the number is even, votes can end in gridlock. You will want to appoint a secretary, treasurer, and chairman of the board. You can appoint yourself to the board, if you wish, although it’s usually best that the board members not be employees of the nonprofit. Chances are, you’ll want to be actively involved in the day-to-day work and draw a salary.
Remember, nonprofits aren’t limited to soup kitchens and homeless shelters. You can do just about anything as a nonprofit that you can do as a for-profit business. The sample case we’ve been using (and the one that first opened my eyes to the possibilities of a nonprofit) is the Kars4Kids organization.
While they came under fire for not fully divulging the purpose of their work or the catches in donations, the fact that the kids they serve are members of one particular faith, not all kids, does not prevent them from reaping the many privileges of non-profit status.
You may never have considered your idea could qualify as a nonprofit. Chances are really good it can. Just be sure to follow state and federal laws. The hoops are there, but they’re not all that difficult to jump through.
How to Start a Nonprofit Organization — Paperwork Power
The Articles of Incorporation set forth the basic information about your nonprofit organization – what it aims to do (purpose) and who will guide the operations. Here’s a sample form from the National Park Service: Sample Articles of Incorporation.
You’ve already made all the decisions. Filling out this form is easy and straightforward. Just be sure to get your form directly from the state you will be incorporating in.
You will also need Bylaws, a Conflict of Interest Policy, and a budget. After your Articles of Incorporation are approved, it’s time to file with the IRS.
None of these steps are difficult. The Bylaws and Conflict of Interest Policy are fairly well standard. You can get pre-printed forms, make any adjustments your board deems necessary, and you’re good. Don’t get bogged down here and don’t think you have to pay big bucks to get started. A nonprofit can be launched on a shoestring budget.