How to Organize Your Nonprofit Business

By Steven D. Peterson, Peter E. Jaret, and Barbara Findlay Schenck from Business Plans Kit For Dummies, 3rd Edition

In your nonprofit business plan, include your organizational chart, indicating which positions are paid and which are opportunities for volunteer assistance. Assign titles — director of programs, for example, or director of fundraising — and include a summary of key job descriptions and responsibilities.

Some nonprofit groups manage to do their work entirely through the services of unpaid volunteers. When the groups reach a certain size, however, most organizations add a core staff of paid employees who work closely with the volunteer corps.

Often, the person who heads the professional staff is called a Chief Executive Officer (CEO) or sometimes a Chief Professional Officer (CPO). Some nonprofits also appoint a senior volunteer to the position of Chief Volunteer Officer (CVO). The CEO or CPO manages paid staff, and the CVO oversees volunteer activities.

Because the overriding purpose of most nonprofits is to promote worthy causes or serve people in need, salaries and compensation can be delicate issues. It’s easy but inaccurate to view money spent on staff salaries as money not available for investment in your mission.

Well-selected professionals make your organization efficient and effective and make achieving your mission possible. Although most people who choose to work for nonprofits are in it for reasons other than money, they still want to be compensated fairly for what they do.

If you’re not certain how much to pay staff members, start by finding out what professionals in similar positions in for-profit and nonprofit organizations in your market area get paid.

Most states require incorporated nonprofit groups to have a board of trustees, or a group of people who serve as the organization’s official governing body, providing oversight and direction while also helping to raise funds, guide the organization, and shape its programs. (Contact your attorney or the office of your state’s Attorney General for details.)

In your written plan, list the members of your board of trustees along with their affiliations. If you don’t yet have a board, describe the kinds of people you hope to recruit and how you plan to go about approaching them.

Even if your organization isn’t incorporated, consider creating an informal advisory board to help steer your organization. As you select nominees for your board, look for people who are