5 Steps to Starting a Nonprofit
Start with a good idea
|There are more than 1.1 million nonprofit organizations in the United States. Some 20,000-40,000 new nonprofits are formed each year.|
Draft Business Plan
|There are many differences between nonprofits and for-profits. However, all organizations must have a plan for bringing in more funds than the organization spends or the organization will not be in operation very long.|
|Two forms of organization are the unincorporated association and the nonprofit corporation. Many people prefer to organize as a nonprofit corporation because of the liability protection the corporate form provides. To incorporate as a nonprofit corporation, articles of incorporation must be drafted and filed with the state government. It is generally a good idea to incorporate in the state in which the organization will have its principal office. Once incorporated, an organizational meeting should be held during which officers are elected, bylaws are approved, and other start-up activities are undertaken. In addition, all organizations, regardless of their form, generally must register with their local government authority to obtain a license to engage in business in that locality.|
Draft & File IRS tax exemption application
|Organizations that intend to be tax-exempt under section 501(c)(3) of the Internal Revenue Code as charitable, educational, and scientific organizations (to which contributions are tax-deductible for the donor) should file IRS Form 1023. Most other organizations should file IRS Form 1024. See also IRS Forms and Types of Nonprofits on this website.|
Draft & File state & local tax exemption applications
|Some organizations, particularly those that have obtained recognition as 501(c)(3) organizations from the IRS, may qualify for exemption from state sales and use taxes and local property tax, and a business license and registration fees. To obtain an exemption, organizations must apply with the appropriate state and local government offices.|
Copyright © 2002 Sandra Pfau Englund. All rights reserved.
With that high-level overview understood, let’s dive deeper into the details.
Starting an Organization Step-by-Step
(It won’t all happen neatly in this order, but generally, this is what needs to be done.)
Research and Preliminary Planning
In the excitement of starting something new, it’s tempting to rush through this first step. But energy invested in research and planning early on saves at least twice the time in mistakes later.
If you don’t have a business background, reading a single book on non-profit management can make a world of difference. (Most local libraries have books on the subject, and the price is right!) Talking with knowledgeable people, visiting other successful organizations, and attending workshops or seminars can help to give you a rounded perspective and prepare you for what lies ahead. As you meet and talk with others in the humane movement, you’ll also be developing a valuable support network of colleagues.
Be informed about issues
What is the scope of the problem in your own community? How can you best address it? What are the factors affecting animal over-population at large? What are others in the humane movement doing? How can we work together?
Talking with other humane organizations, attending conferences, and subscribing to animal-related periodicals and publications for animal welfare professionals are good ways to keep up with recent developments. It’s uplifting and energizing to learn about new ideas and meet other like-minded individuals.
I attend the No-Kill Conference. . . I consider it my sanity check, my once-a-year effort to get focused. . ., reports Jane Long of the Peoples Anti-Cruelty Association / Albuquerque Animal Rescue. I return home surrounded by the aura of confidence, no doubt acquired from the inspirational speakers.
Faith Maloney of Best Friends Animal Sanctuary recounts an uplifting experience at a conference sponsored by SPAY/USA several years ago when the development of early-age spay/neuter was first announced, making it possible to neuter puppies and kittens before adoption to ensure that they will not breed. Faith returned to her work with the determination and information necessary to implement this new policy, as did many of the other conference attendees.
Your organization sets an example for the public. Keeping up-to-date on proper animal care is critically important. It’s also important to know your limits. When in doubt, refer people to experts veterinarians, behaviorists, and other organizations.
Writing Your Mission Statement
Much of your organization’s success lies in articulating a clear and motivational mission for your work. This purpose should touch your heart and the hearts of those who will support your work.
Exactly what are we trying to do here?
Defining your purpose precisely in words is tremendously powerful. Your mission statement will guide all of your work; it will help you with future decision-making and help get your message across to the public.
A successful mission statement will (be):
- Brief (one or two sentences)
- Clear and positive in tone
- Action and results-oriented
- Motivate people to support your work
Writing your mission statement also lays the groundwork for filing your corporate papers, which customarily require a statement of purpose.
(Again, in writing!) Don’t confuse goal setting with your mission statement. Goals are concrete statements about what you need to achieve in order to fulfill your mission. Focus on results and the actions needed to achieve them.
Where to start?
Start with your long-range goals and work back to the present. Where do you want to be in 10 years? (The answer to this question will give you your long-range goals.) What will you need to do to get there? (intermediate goals) Lastly, decide which of these goals you’ll work on in the first and second years. (These are your short-range goals; you’ll want to focus on these right away).
Your goals should be inspiring and motivational! Whenever possible, make them measurable.
Once the goals are agreed upon, consider how you will accomplish them. Specifically, what programs will you develop? What will be required in terms of financial resources and people?
As you do your planning, keep in mind that it’s important to demonstrate success. (Remember the old adage: Nothing succeeds like success.) You may not want to tackle your most challenging project first, but rather, hone your skills and develop the team with a more manageable project.
Establishing Your Board of Directors
What is the role of the board?
The Board of Directors governs the organization. The board is responsible for establishing the direction of the organization and for its financial, ethical, and legal well-being. The board is also responsible for hiring the executive director and for ongoing oversight.
If directors are also fulfilling other roles within the organization, as they often are inhumane organizations, they should have a clear understanding that this work is separate and apart from their role as board members. They must respect the authority of the appointed executive director and staff with regard to daily operations.
Who should be on the board?
When you are putting together the board, there are two key components to consider: the skills and talents that you need to make your organization work AND the personalities.
Legal, accounting, veterinary, public relations, and business skills can all be valuable to your organization. Once you identify the types of skills needed, list potential individuals to contact. If you do not know them well, you’ll want to check them out meet, and talk with them. Also, talk with others who have worked with them in the past. Their ability to work well with others and their commitment to the core values of your organization are as important as their talents.
Preventing problems before they start
Horror stories of troubled boards abound. The overly aggressive individual that scares everyone else off; the nice but uninvolved person who can never make it to the meetings; the contrary person who disagrees with everything. People who have had such experiences will tell you that an ounce of prevention is definitely worth a pound of cure.
Take the time to get to know people before inviting them onto the board. Your bylaws can help with solving problems when they occur; they should allow for the removal of a director and should establish terms of office for directors, which can provide a non-confrontational way to end an unproductive relationship.
How many is too many?
Generally, a smaller board (seven individuals or less) is considered to be easier to work with and is often more efficient than a larger one. The size of the Board of Directors must be set down in your bylaws. Most states require a minimum of three directors.
Factors to consider when selecting Board Members
- Will they work well with your group? (A single troublesome individual can impede progress and make everyone else miserable.)
- Do they understand and agree with the organization’s purpose and goals? Share its basic principles?
- Will they put in the time needed?
- What resources do they bring to the board?
- Will they commit to help with fundraising? Making It All Legal Incorporation has several important benefits. It limits personal liability, lends credibility to your work, and enhances the status of the animals under your care. Once your group obtains 501(c)(3) non-profit status from the IRS, donations to your work will be tax-deductible, which encourages larger gifts. Additionally, incorporating and obtaining your tax-exempt status becomes essential as your group grows. Failure to comply with IRS tax codes and state laws relating to charitable donations can create serious problems for your group. So what do we do first? You’ll want to start by registering the corporate name and gathering the necessary paperwork. Name registration and incorporation paperwork is usually available from your Secretary of State or Corporation Commission. Forms for filing your 501(c)(3) application are available from the Internal Revenue Service. You may also need to file with your state for a certificate to solicit donations and for sales tax exemption. This is often done through the Attorney Generals’ office.
Where to call?
- Call your State House to get the phone number for your Secretary of State and Attorney Generals’ office. Ask for information on:
- Registering the corporate name
- Incorporating a non-profit
- Any other regulations that apply to charitable non-profit organizations
- Call the IRS at 1-800-TAX FORM or visit its website at www.irs.gov/cover.html
What’s in a name?
Consider carefully as you select your organization’s name. It’s possible to change a corporate name, but it’s much better to get it right the first time! Name changes are expensive, time-consuming, and confusing to donors. How will the name sound and what will it imply to individual learning about your group for the first time? The name SPCA implies that the group performs cruelty investigations. The term rescue suggests that you provide rescue services for animals. A geographic name indicates that you only serve and raise resources from a restricted area.
Try to select a name that is:
Avoid names that are:
An essential part of this process is drawing up the organization’s bylaws, which set down the framework for the governance of the organization. Its important that the bylaws are in compliance with both your state and federal government requirements. For this reason, it’s important to do some research. Boilerplate bylaws are available at your local law library. Looking at other organization’s bylaws can also be helpful. Consider the wording carefully and keep them simple.
For more information on non-profit management resources
Dollars and Sense
You’ll need an effective accounting system that documents income and expenses in understandable categories. If you do not have an accountant or bookkeeper, consider recruiting one to help you with this task.
You’ll need to create a budget
Based on your track record of spending and bringing in resources and on your plans for the year, you can project expenses. If you’re just starting out, use your goals as a starting point for estimating expenses. Your accountant can be of help here. The budget is a guideline. You don’t have to get it penny-perfect; just do the best you can. You’ll get better at projections over time.
When doing your budget, do not neglect to allocate resources to fundraising. It takes money to make money!
Why go through all this?
Well, there are several good reasons: The board and executive director need to have a clear understanding of the resources needed to make your plans work. It’s a sobering experience to realize that you have the responsibility to raise these resources. Secondly, the IRS requires that you put together a budget and have a sound accounting program in place for tracking your work. Lastly, large donors, particularly foundations and businesses, are going to be looking for your budget before they consider funding you.
Now that your budget is done, you can clearly see what you need to raise in terms of resources. (Check out our other manual, Getting Your Paws on More Money.) But we still have more work to do to ensure the success and stability of the organization.
Defining Policies and Standards
Defining your organization’s policies and standards is an ongoing process. If your organization is vital and growing, the policies and standards will be revised periodically. But you will not want to put off developing the initial policies for too long.
Establishing policies and standards (in writing), and sharing them with everyone involved, is a critical part of creating an environment where people can work together successfully toward a common goal. Everyone needs to know who makes decisions and what the usual procedures are.
Your policies will need to include things like: the services you will routinely provide for the public, veterinary care protocol, and a listing of individuals empowered to authorize veterinary care. Such guidelines help to create stability within the organization (keeping everyone on the same track). They also give the organization credibility by helping to ensure that consistent, quality services are provided. Examine other organization’s policies and procedures for a starting place.
Aren’t policies and bylaws the same thing?
They shouldn’t be. While the organization’s bylaws address the framework and governance of the organization; policies and procedures address daily operations. Policies are more detailed, but they are also easier to change than the bylaws.
Taking It to the Public: Cultivating Support in the Community
The first public meeting
Once the groundwork is laid, you need to cultivate the support of the community, reach out, and involve more people. In order to succeed your organization is going to need the support of many, many people. Holding a public meeting, where you can explain what your group is going to accomplish, is the next step.
You don’t want to throw a party and have nobody show up! Publicity is key here.
Start creating your mailing list
Compile the addresses of your animal-loving friends and ask all of your board members and volunteers for names and addresses of people they know who may be interested. You’ll need a simple computerized mailing list database to keep track of these addresses.
These names and addresses (your mailing list) form the foundation of all your future fundraising efforts. (See Getting Your Paws on More Money for more information on building a mailing list.)
Create a meeting notice and send it to all the folks on your newly created mailing list. Use an eye-catching photo or drawing of an animal on the notice and be sure that ALL of the pertinent information is included:
- Who is involved.
- Organizations name, mailing address, phone number, e-mail address
- Subject of the meeting
- When (date and time)
- Where (give the address) Also remember to make it friendly, fun, and interesting.
- Will refreshments be served? Will a local celebrity or trusted community leader be there? Invite people to bring a friend.
Timing the arrival of the notice is important too; more than three weeks prior and people forget; less than 10 days and their schedules are filled!
A good poster campaign is an inexpensive and highly effective way to attract people to your meeting. An 8 1/2″ x 11″ poster printed on bright colored paper with an eye-catching image of an animal will do the job.
Select locations and assign volunteers to post the notices: vet clinics, groomers, public libraries, town halls, supermarket bulletin boards, pet supply stores, local businesses, should all be covered. Always ask permission before posting notices to maintain good relations in the community.
|Creating publicity materials that work
Contact the media
Send a news release to the local newspapers and a public service announcement to local radio stations. (See the publicity section in Getting Your Paws on More Money for more information.)
Holding a Productive Meeting
The goal of the first meeting
At this first meeting, it’s important to establish your credibility and to explain the program clearly and positively. While you want to convince people of the seriousness of this problem, be sure to speak in a positive tone. You must convince the attendees that this is a do-able project, that they can make a difference! No one wants to get on board a sinking ship!
An unproductive meeting can be the kiss of death to a young group, as the busy, productive people you need to connect with do not have time to waste.
Organizing a successful meeting
- State in one or two sentences exactly what you would like your meeting to accomplish.
- Prepare a written agenda. Set time limits for each item. (Provide a written copy of the agenda to each attendee.)
- Set ground rules and appoint a strong, but fair, chairperson. Her job is to maintain focus and order and prevent the meeting from degenerating into a series of “cute animal stories or “war stories.” After the meeting ends is the appropriate time for people to chat. (Don’t underestimate the value of personal time spent getting to know people. Many valuable connections are made informally after the meeting is over.)
- Arrange to follow up. Note action items and take action!
Provide handouts that people can take home and encourage them to share the information with others. These are some of the materials you’ll want to have available at the meeting:
- Information about the program/organization
- Donation request form or flyer
- Sign-in sheet that requests the attendee’s mailing address
- Volunteer form that gives people the opportunity to indicate how they may be willing to help out and to inform you about any feral colonies or animal problems that they are aware of in town
- Posters announcing the next meeting date
- Donation coin canister
- Photos of animals that you have helped and some in need of help
Carefully select key volunteer staff
All of your preparation will pay off here. You want to get volunteers bought into your organization’s mission and goals upfront.
Appoint one of your board members to spearhead your volunteer recruitment. Provide written job descriptions (these can be brief), and training, which must include the organization’s policies and procedures. Effective follow-up is as important as initial training. A good volunteer coordinator works with the volunteers on an ongoing basis to ensure that important tasks are completed on time, to get feedback, and to supply additional training as needed.
Recruiting capable people
Many people approach volunteer recruitment by standing up at a meeting and asking; “OK, is anyone willing to do this?” Instead of waiting to see who volunteers, it’s best to actively select the person you want to do the job. This takes a bit more time, as you’ll need to get to know the individuals, but it tends to result in higher quality help. Once you have selected the right person, call them or arrange to meet, and let them know that they’re just the right person for the job!
After volunteers are assigned tasks, they’ll need thorough training in order to perform their role effectively. Anyone in your group who provides hands-on animal care (including trapping, foster care, transport) must receive general animal health care information, complete training in the care and handling of the animals, and the proper use of equipment. This should be a top priority, as you must ensure the safety and well-being of the volunteers and all animals that come under your care. Everyone needs to have an understanding of the organization’s policies and how the program is implemented.
While you want to develop each individual to their fullest potential, remember that the organization’s mission must come before the interests of any one person. If an individual is disruptive to many others or becomes an impediment to the organization’s mission, you can and should fire the volunteer. You do not have to accept the services of an individual who is not working within your organization’s prescribed guidelines. Naturally, this assumes that you have carefully and fairly examined the situation. Its often advisable to get a partner in such decisions (this may be a board member, program coordinator, etc.), as another perspective helps to ensure fairness and diffuse tension and blame.
Providing QUALITY Services
Quantity without quality is destructive. Don’t do more than you can do well; the animals deserve quality care. Providing good care for the animals and accurate information for the public must be important considerations in developing your programs and in selecting and training your volunteers. Take care not to expand services more quickly than your resources can support them.
Local vets may be willing to offer discount services once your program is explained. For assistance in locating a receptive veterinarian or clinic, you may want to contact SPAY/USA (1-800-248 SPAY) and Friends of Animals (1-800-321-PETS) for referrals. You only need to find one willing veterinarian to start; you can always build other relationships as you grow.
Devising a reliable authorization system for vet care, keeping careful track of your expenses, and paying the veterinarians promptly are critical parts of maintaining a good reputation in the community.
Special considerations for opening a no-kill shelter
If your organization is considering operating a shelter facility, there are some additional issues to be considered.
Raising sufficient resources
The animals under your care will be entirely dependent on you, not only for routine care and food but also for emergency veterinary care. Talk with other successful organizations to get an accurate picture of the financial and time commitment involved in operating a shelter. You’ll need to assess your initial and ongoing financial needs AND your ability to keep resources coming in.
Meeting the psychological, as well as physical, needs of the animals
A no-kill shelter that will be housing animals for extended periods of time must be able to provide a cage-free environment. It’s not humane to keep cats or dogs confined in cages for prolonged periods of time. Each animal also needs daily personal attention from staff or volunteers.
If your shelter becomes overcrowded, the animals run an increased risk of developing health problems and stress-related behavior problems. As you will receive many more calls to help animals than you’ll reasonably be able to accept, you need to have a strategy in place to handle these calls. Providing instructions to help people place animals into new homes themselves and making referrals to other area organizations are constructive ways to encourage people to do the right thing.
The euthanasia issue
Responsibly run no-kill shelters provide humane euthanasia to animals who are suffering and beyond help. It’s best to have a policy in place regarding the standards for making the decision to euthanize an animal and to determine who within the organization is responsible for making this decision. (There must be backups in case the key person is unavailable.) The opinion of your veterinarian and the group’s ability to provide good quality of life for the animal ought to weigh heavily in the decision-making process.
How Are We Doing?
Assessing progress and making changes
The leaders of the organization are responsible for making the organization’s mission statement manifest. This requires periodically assessing your progress and making necessary changes to get the job done. Are you truly fulfilling your mission? Are the programs working?
Success is an ongoing process of making adjustments.
A Labor of Love
Though starting an organization is labor-intensive, it’s also richly rewarding on many different levels. Every adoption represents a victory in our lifesaving work. Every spay or neuter prevents many births. Every individual that you reach with your message of compassion and caring for the animals will share the message with others. Many of your program’s volunteers will forge new friendships with others they meet at meetings and events. Your effort will not only help many, many of the community’s animals, but it will build a strong alliance of people who care about animals. The ripple of compassion that you put into motion will keep on growing and growing. And that’s what it’s all about!