When deciding to start a nonprofit company, the first thing people think is charity and profit. As much as that is true, the rules aren’t as simple to accomplish either. Paperwork is immense, and the Government demands for frequent reports. But perhaps with these following steps, you can maneuver your way in the business, whether you’re a starting founder or a new member.
In nonprofit companies, there is a form frequently used, called a 501(c)3. This form allows you to make all donations tax exempt, and allow your business freedom from paying it’s own tax by sending tax reports through forms like form 990 and 3500A. Naturally, there are other types of 501(c)’s, such as Associations, Private Foundations, etc., but that’s more research for your lawyer to work out.
Getting on your feet isn’t hard
In the nonprofit world, there are businesses whose mission is to help other nonprofits get on their feet. If you’re in need of doing something simple, you can start with a personal grant; if you need to get an office, you can get into an incubation program; if you want an established nonprofit to manage the 501(c)3 status for you, go find a Fiscal Sponsor. There is life before the 501(c)’s, but once you have your own, you’ll be able to get discounts and more free stuff on your own. Either way, you’re not left on your own.
Volunteers are everywhere
Just when you thought volunteering for a nonprofit was just for Ushering and Community Service, you’ll come to learn very quickly that even the Boards, Committees, Advisers, and Executives are many times working for free. If you’re interested in being a big fish in a little pond, this is where you can get that resume started. Everyone does it, and it makes a huge jump in one’s career.
Administration is real security
If you’re wondering how to get rich quick in the business, then you’ll have to be either the CEO, Officer, or the Lawyer that incorporates these charity machines. But the deal is, CEO’s usually move on after they’ve completed their task, the incorporation industry has been monopolized by legalzoom.com, and only the secure paying jobs are the positions where the Board has a say in your work: President, Secretary, and Treasurer. Regular employees and managers are a rarity.
Programs make too much money
If you’re lucky, you’ll be a teacher or mentor in a nonprofit program. Some people think that the arts are a joke, since the term “starving artist” was coined. But surprisingly, teaching dance, music, or calligraphy is a fantastic source of income for many organizations. This is also where the Grants are most effective. Please research, as most Grants change in requirements in a matter of a year or so.
Grants are not for everyone
As much as Grants are the easiest go-to answers in how to fund your nonprofit, it may not be the wisest. Much of your time will be going into building your governance and managing programs, and alternatives will typically become the necessity, more than not. As much as you can give tax deductions to all your donors, you should be advertising to profit from merchandise, tuition, and/or memberships. It’s not uncommon to be rejected from Grants.
Free services are insanely effective
Some people will work for free, in exchange for community service hours or letters of recommendation; Sponsors will throw money into your event if you give them your demographics and annual reports; and In-kind Donors, like Google and Microsoft, will give free products just for being established for three years. Just ask around, and you can manage your assets for maximum perks.
Collaborating with For-Profits and Non-Profits
The tides can get hard for your nonprofit, and at times, your cause might be irrelevant to the fashion. So hence, you can build up your worth by collaborating with another business. Not all the money has to be donated to the cause you’re collaborating with; and tax deduction can be given to the for-profits of your choice. It’s synergy at its best!
Societies, Members, and Patrons
Fundraising can get difficult, and at times, it’s not the marketing team’s fault. It just happens. When this occurs, it is best to allocate money from your Members. These members could be standing committees, chapters, or Patrons of your company, and they are there to keep your business sustained. It may not be a pretty alternative, but it is your most realistic method of keeping finances afloat.
Research is oxygen
People like to kill the middle man. Do yourself the favor, and research everything yourself. It hurts to be left behind, and as slow as this industry may be, thanks to the paperwork you’re about to take on each season, a lot will change for the next set of nonprofits necessary for the new generation of people-in-need. So look online, go to seminars, talk to other CEO’s – there’s always room to grow, you just have to keep educated.