How to Start a Nonprofit in 9 minutes

Starting a nonprofit organization can be an incredibly rewarding experience, but it requires careful planning and execution. In this video, we will guide you through the process of starting a nonprofit from scratch, step-by-step.

First, we will help you identify your organization's mission and purpose, as well as conduct market research to ensure there is a need for your services. Then, we will cover the legal requirements for incorporating your nonprofit and obtaining tax-exempt status from the IRS.

We will also walk you through developing a business plan, recruiting a board of directors, and establishing policies and procedures for your organization. Funding is a critical aspect of any nonprofit, and we will help you identify potential funding sources and create a fundraising plan.

By the end of this video, you will have a comprehensive understanding of the steps necessary to start a successful nonprofit from scratch. Whether you are passionate about helping your community or addressing a global issue, we are here to help you turn your vision into a reality.

#1. Identify a need:

Identifying a need is a crucial step in starting a successful nonprofit organization. It involves researching and understanding the gaps or issues in your community that your nonprofit can address. This could be anything from providing education or healthcare to underprivileged individuals to advocating for environmental protection. By identifying a need, you can create a clear mission statement and develop programs or services that directly address the issue. This will not only help your nonprofit stand out, but it will also ensure that you are making a meaningful impact in your community or beyond.

#2. Develop a mission statement:

Developing a mission statement is a critical step in starting a nonprofit organization. It is a concise statement that clearly communicates the purpose, values, and goals of your organization. A well-crafted mission statement can inspire donors, volunteers, and employees to support your cause and can help guide decision-making and strategy development. When developing your mission statement, it's important to consider the needs you identified and the unique approach your nonprofit will take to address them. Your mission statement should be brief, memorable, and authentic, and should accurately reflect the heart of your organization. It will serve as a guiding light for your nonprofit's operations and will help you stay focused on your purpose.

#3. Choose a name:

Choosing a name for your nonprofit organization is an important decision that can impact its success. Your name should be unique, memorable, and reflective of your mission and values. It's important to conduct research to ensure that the name you choose is not already in use by another organization and to check if the domain name and social media handles are available. A good name can help you stand out in a crowded market and make a lasting impression on potential supporters. It's worth taking the time to choose a name that accurately represents your organization and its purpose.

#4. Recruit a board of directors:

Recruiting a board of directors is an essential step in starting a nonprofit organization. Your board of directors will provide leadership, guidance, and support to your organization. When recruiting board members, look for individuals who share your passion and vision, have relevant experience and expertise, and can bring diverse perspectives to the table. It's important to establish clear expectations and responsibilities for board members and to provide ongoing training and support. Your board will play a crucial role in shaping the direction and success of your nonprofit, so it's important to choose members wisely and invest in their development.

#5. Incorporate:

Incorporating your nonprofit organization is a critical step in ensuring legal compliance and establishing credibility with potential donors and supporters. It involves registering your organization with the state and obtaining formal recognition as a nonprofit corporation. The incorporation process can vary by state but typically involves filing articles of incorporation, selecting a board of directors, and establishing bylaws. Incorporation also provides limited liability protection for your board members and staff. Additionally, you may need to obtain tax-exempt status from the IRS to qualify for certain funding opportunities and to provide tax-deductible receipts to donors. Incorporating your nonprofit is an important investment in the long-term success and sustainability of your organization.

#6. Obtain an Employer Identification Number (EIN):

Obtaining an Employer Identification Number (EIN) is a crucial step in starting a nonprofit organization. The EIN is a unique nine-digit number assigned by the IRS to identify your nonprofit for tax purposes. You will need an EIN to open a bank account, file tax returns, and apply for tax-exempt status. To obtain an EIN, you can apply online through the IRS website, by mail, fax, or by phone. The process is typically quick and straightforward, and your EIN will be issued immediately upon completion of the application. Obtaining an EIN is an important part of ensuring legal compliance and establishing your nonprofit's credibility and legitimacy.

#7. Check for state and federal tax compliance :

Checking with your state for nonprofit tax compliance is a crucial step in starting a nonprofit organization. Depending on your state and the nature of your organization, you may need to register for state sales tax and unemployment insurance.  Obtaining tax-exempt status from the IRS can provide significant financial benefits, including exemption from federal income tax and the ability to receive tax-deductible donations. Checking with the state and federal government is an important part of ensuring legal compliance and establishing your nonprofit's credibility and legitimacy.

#8. Apply for tax-exempt status:

Applying for tax-exempt status is a critical step for nonprofit organizations seeking to maximize their financial resources and establish credibility with potential donors. To obtain tax-exempt status, you must file Form 1023 (or 1023-EZ for smaller organizations) with the IRS and meet certain eligibility requirements. Once approved, your organization will be exempt from paying federal income tax and will be able to receive tax-deductible contributions from donors. Obtaining tax-exempt status can be a complex and time-consuming process, but the benefits can be significant. It's important to ensure that your organization meets all eligibility requirements and has the necessary documentation and support to complete the application process.

#9. Develop policies and procedures: 

Developing policies and procedures is a critical step in establishing the operations and governance of your nonprofit organization. Policies and procedures provide clear guidance for staff and volunteers, promote consistency and fairness, and help ensure compliance with legal and ethical standards. Examples of policies and procedures that may be necessary include those related to hiring and personnel, financial management, volunteer management, and conflict of interest. It's important to involve your board of directors and key stakeholders in developing policies and procedures and to regularly review and update them as needed. Developing strong policies and procedures is an essential part of ensuring the long-term success and sustainability of your nonprofit organization.

#10. Raise funds:

Raising funds is a crucial aspect of running a nonprofit organization, as it provides the resources necessary to achieve your mission and serve your beneficiaries. There are many different ways to raise funds, including grants, individual donations, corporate sponsorships, events, and more. Developing a fundraising strategy that is aligned with your mission and values, and that targets potential donors effectively, is key to success. It's important to establish clear goals, metrics for success, and a budget for fundraising activities. Cultivating strong relationships with donors and maintaining transparency and accountability in financial management is also essential. Raising funds is a critical part of ensuring the sustainability and impact of your nonprofit organization.

Starting a nonprofit from scratch is a challenging but rewarding process that can make a meaningful impact on the world. you can build a strong foundation for your organization's success.