Crowdfunding and digital media have revolutionized the world of fundraising; it’s never been easier to start a nonprofit and hit the ground running. While CommitChange works with established nonprofits, our support team often fields questions from individuals at all stages of forming an organization. Here are some general tips to starting a nonprofit for people with a vision who haven’t officially formed a 501(c)(3). (The first two suggestions are also great tips if your organization is in a state of transition or if you’re seeing a lull in donations.)
1. Get the word out to everyone you meet.
Whether you want to raise money to start a local after school program or a traveling theatre pop-up, the first step you should take is telling everyone you know about it. Talk out your ideas, your passion, and your mission. This first group of people you inform about your vision will be both your focus group and your initial network of supporters.
If you can’t drum up initial interest in your food truck to feed the homeless or your feminist science fiction writer’s workshop, you might have to rethink your plan. Does your intended location make sense? Is your mission statement or pitch too complicated? Is your area already saturated with nonprofits just like yours? Do the people you’d like to serve really need your help?
If your initial feedback is less than positive, don’t despair. Now is the time to listen to the ideas of those around you. Ask questions of the people who offer you their opinions. Refine your ideas. Pivot if it looks like your plan just needs a little tweaking. Come back and repeat step one until the people around your are as pumped about your mission as you are.
Throughout this entire process, make sure to collect contact information for the people you talk to, both email addresses and phone numbers. Gauge their interest in helping you out at this critical time. People love to help; you’d be surprised at how many people will agree to answering questions, getting you in touch with people they know, volunteering their time, and even offering to be on your board.
2. Network professionally.
Once you know your idea is golden, it’s time to start branching out your network. Start attending networking events. A Google search for nonprofit associations should bring up events in your area. Reach out to nonprofits that serve the same people or provide similar services. This is your chance to share your vision and solicit professional feedback.
This network is your next testing ground; the people you talk to professionally will have greater insights into the challenges you will face and what the current fundraising climate is like. You might find out that it can be difficult to work with local schools or that there are already eight independent theatre troops in the city competing for donations. From these conversations, you should be able to refine your vision and plan even more.
The professional network you build will also help with the ins and outs of running a nonprofit. Through association memberships and relationships with other professionals, you’ll learn about grant opportunities, be able to attend classes and workshops, and get tips on the business side of running a nonprofit. It is also possible you’ll find partnership opportunities; nonprofits often share workspaces, resources, and sometimes even staff and volunteers with other groups.
3. Cover your bases legally.
In conversations with individuals who contact CommitChange about starting a nonprofit, legal nonprofit status often becomes a sticking point. The process can seem daunting, but it’s important to go through if your mission extends beyond a single, short-term project. The Digital Media Law Project has a guide that is a good starting point to what it will take to incorporate as a 501(c)(3).
Once you start accepting donations, you’ll be responsible for both ensuring that they are being applied as your donors intended and that they’re reported correctly, both to your donors and to the IRS. In a world where an individual can start a crowdfunding page in a few minutes and raise thousands of dollars to support a cause in a few days, knowing the basics of state, federal, and tax laws relating to charity and nonprofit fundraising are essential. Laws regarding nonprofits vary by state, and it’s important to protect yourself against, at the very least, the possibility of a huge tax bill.
Photo courtesy of Hack the Hood.