How to Become a Not-for-Profit Company
- 1). Draft an initial mission statement. This should outline your basic mission as a nonprofit including your target population, how you plan to raise money and your organization's goals for the next five to 10 years. This should be revamped once you have secured an executive committee and rewritten a final time before you finalize incorporation documentation.
- 2). Name your organization. The name of your nonprofit should reflect the service you will provide. You can always rename the organization later if necessary, so try to not spend too much time on this. Ask family and friends to help you create an organization a name that suits your mission.
- 3). Recruit executive board members. You will need at least a president (which can be you), vice president, treasurer and secretary. Some states require more board members to be appointed, but this is the minimum in most states. Check with your state's guidelines for executive structure for nonprofit organizations once you decide to incorporate.
- 4). Hire an attorney. Your attorney should be well-versed in nonprofit management and should be able to answer all questions regarding starting your nonprofit. Ask your attorney if he can help you with incorporation and ask to keep him on retainer (or to join your board) so you can have access to legal advice.
- 5). Get an accountant. You will need an accountant to help you keep track of all financial aspects of your organization. The accountant will work closely with the treasurer and should be able to answer any tax-related questions regarding nonprofit organization money management.
- 6). Hire an insurance agent. You will need an insurance agent to help you purchase property, liability and life insurance. You will need these for when you start to hire employees or recruit volunteers.
- 7). Acquire start-up funds by utilizing personal startup capital, applying for a small business startup loan or consider asking another nonprofit organization to act as a fiscal sponsor for your nonprofit. Many organizations will sponsor other nonprofits to help pay for initial supplies and incorporation charges so loans or personal funds may be unnecessary depending upon your initial supply needs.
- 8). Get articles of incorporation from your state's Secretary of State office (or relevant government office). Ask whether or not there is an available template you can follow to help you draft the articles of incorporation and find out about all necessary fees and paperwork you will need.
- 9). Hold a board meeting and draft your articles of incorporation. All members of your executive board should vote and agree upon the articles before submitting them to the state. Ask your attorney to do this on your organization's behalf or at least have her look over the articles. Compose organizational bylaws at this meeting as well (some states require this of nonprofit organizations while others do not).
- 10
File your articles of incorporation and pay the necessary fees. File your company's bylaws as well. - 11
File for a charitable solicitation license so that you will be eligible to conduct fundraising endeavors in your city. Some cities do not require a solicitation license so check with your Secretary of State office (or state office of licensing and certification) to determine the laws for your particular state. - 12
Apply for an Employer Identification Number (EIN) with the Internal Revenue Service. Your EIN will be necessary when you begin hiring employees or recruiting volunteers. The EIN will allow all the necessary withholding taxes to be taken from employees' paychecks. - 13
Ask your tax attorney to determine whether your organization is eligible for 501(c)(3) tax exemption status with the Internal Revenue Service. Not all charitable organizations are eligible for tax exemption so it is important to determine whether or not you qualify for this. - 14
Hire employees or recruit volunteers. Now that you have an EIN and have incorporated your organization you can officially begin to plan fundraising endeavors. You may need clerical support staff to help answer phones or just general volunteers to help with daily management.
Source...