Non-profits have become highly appreciated for bringing relief to vulnerable people over the years. Establishing a non-profit is much better than running such charitable activities solely as an individual. Again, your fundraising activities will be more credible by creating a non-profit organization. Establishing a non-profit is quite what is attainable when launching a business organization. So, this article will look at the processes involved in creating a successful non-profit.
When attempting to create a non-profit successfully, the first step is selecting a unique identifier – your organization's name. And this is not just picking a name; it has to do with ensuring proper incorporation and registration of the organization. Hence, you will need first to confirm the availability of the selected name from the regulatory authority.
In registering the organization, you would be required to list all the directors. This is probably after you must have identified yourself as the organization's owner. Also, an article about the organization is expected to be filed to make your organization a legal entity. Only after incorporation can the non-profit be seen as a standalone unit fitting to run its operation.
Before anything else, you must understand what the jurisdiction you'll be operating in requires for an organization to operate as a non-profit. For instance, there are areas where non-profits have to legally register as a charity before eventually operating as one. Occasions exist when new non-profits have to make some public declaration.
This they do by making known their incorporation in newspaper publications. Having read all these, it is incumbent on you to ask the regulatory body about the requirements. And you should ensure that they are duly met before you launch your non-profit. It will be unpleasant to have your organization dealing with regulatory bottlenecks while it is in the thick of its fundraising activities.
Defining the mission and vision of your non-profit is highly important. It ought to be done along with the name selection – but it had to be separately itemized because of the significance. As it stands, you will need to make known the purpose for establishing the organization to the agency in charge of company registration. So, you must be careful and detailed about defining your mission especially.
The importance of doing this may not dawn on you until the issue of taxation arises. As it is generally known, non-profits do not pay taxes – but this is not always straightforward. A non-profit can end up remitting tax if it embarks on revenue-generating avenues that are not in sync with the purpose for which it had been set up.
A business plan is put together to guide one's activities while running an organization. Understandably, you are not running your charity organization to make profits; a comprehensive business plan can still be valuable to you to a large extent. For one, it helps you focus on the mission for the future and create a pathway towards achieving sustainability. Therefore, you can prepare a business plan for financial projections for 3–5 years.
Bylaws can be regarded as the overriding principles that guide your operation or existence as a non-profit. Having them drafted in advance ensures that things follow a standard or due process. You can always resort to the appropriate sections of the bylaws when attempting to elect individuals to certain positions or take a salient course of action.
You should, however, not put out a final copy [of the bylaws] without engaging an attorney. The attorney should understand the extant laws on charity organizations and their activities. You should know that your bylaws must not contradict the tax requirements of your jurisdiction. Plus, they have to be in tandem with the purpose for which your non-profit has been established.
Up next, you should work on setting up your board. You must have elected some persons to join you on the board beforehand. These persons should be made to attend the organization's first formal meeting. At this meeting, you will further impress the mission and vision of the non-profit.
You should further furnish your board members with other relevant information or documents about the organization. Again, the implementation of your organization's bylaws should be actualized during the first formal meeting.
It would be best if you moved to activate your federal tax exemption by applying and filing the necessary documents – like the financial statements and bylaws. After you must have done this, you can conveniently claim some tax exemptions as other non-profits do.
We consider that you are not about running one-off charity drives, so you will need to employ some persons to work with you. In line with this, it would be necessary for you to apply to get an employer identification number. This number will be linked to your tax filings – even if a tax exemption is in place. That said, non-profits are expected to remit employee payroll tax.
Just like a regular business, every non-profit needs capital to run efficiently. You don't necessarily have to embark on extensive fundraising campaigns to get the preliminary funds to actualize the objective of a charitable cause. You may appeal to a couple of colleagues, families and friends to secure the start-up funds. Mind you; the funds may not be used for humanitarian needs as you will need to take care of some operational expenses initially.
We have touched on nine steps above, but it doesn't end there. To be a successful and sustainable non-profit, you must fulfil certain yearly compliance requirements. These may include but are not limited to submitting your annual financial report, tax filings to the concerned authority, and doing necessary (annual) renewals.
A successful non-profit has to be built on a solid foundation which concerns the 9-step process highlighted in this article. We hope you will take all you have read to heart and make efforts to implement them as you aim to establish a non-profit worthy of note.