Nonprofit Kit For Dummies
The key elements of running a nonprofit organization include securing nonprofit status; managing your budget and the day-to-day work of your staff; and raising money, also called fundraising.
Securing Nonprofit Status in Ten Fairly Easy Steps
The most important aspect of being a nonprofit organization is having nonprofit status in the eyes of the IRS, or Internal Revenue Service. Take the following steps to gain nonprofit status for your organization:
Choose a name for your nonprofit. While you’re at it, select and reserve a Web domain name.
Form your organization’s incorporating board of directors.
Obtain a Federal Employer Identification Number, or EIN, for your organization by submitting IRS Form SS-4. You can find a copy of this form on the IRS Web site.
Write Articles of Incorporation and submit them, with the required fee, to the appropriate office in your state government.
Develop organizational bylaws for your nonprofit. Bylaws are the rules by which your organization will operate.
Hold your nonprofit’s first board meeting and take minutes.
Review IRS Publication 557, which shows instructions for filing for tax exemption. Visit the IRS Web site to download this publication.
File IRS Form 1023 if you’re applying to become a 501(c)(3) tax exempt organization, preferably within 27 months of the date of incorporation. The latest version of Form 1023 can be found on the IRS Web site.
Sit back and relax. Celebrate when your letter of determination arrives!
Register your nonprofit as a charity in your state.
Note: When securing nonprofit status for your organization, you don’t have to follow these steps exactly as we’ve ordered them here.
Raising Money for Your Nonprofit Organization
Every nonprofit organization needs to raise money. Whether applying for grants, searching for donors, or throwing fundraising events, you’re always going to be looking for new ways to bring in funds. These tips can help your nonprofit successfully raise money:
Set clear, reasonable, yet ambitious fundraising goals based on a clear assessment of your organization’s likeliest supporters.
Don’t depend on one grant, one event, one donor, or one approach; take steps to draw income from multiple sources.
Because it costs money to raise money, be sure to make a fundraising budget.
Remember that individual donors represent the largest portion of a nonprofit’s private monetary contributions.
Write a strong case statement for your organization, telling how its work benefits people and how contributors’ support will make a difference.
Ask. If you don’t ask for a contribution, you won’t get one.
Make it easy for donors to respond to your organization’s request.
Begin by asking for financial support among those people closest to your nonprofit — the board, volunteers, constituents, and staff.
Include some fun in your fundraising. Special events can win friends and inspire new supporters.
Do your foundation homework before you ask for funds: Examine each potential grantmaker’s interests, focus, limitations, and policies.
Demonstrate the needs of the constituents your nonprofit wants to serve and present a clear plan for addressing those needs.
Acknowledge your donors’ financial support and work to deepen their involvement in your organization.
12 Annual Tasks for Every Nonprofit Manager
As a manager at a nonprofit organization, your job is to make sure that each of the following 12 organizational tasks is completed every year:
Prepare your budget. Estimate the organization’s income and expenses for the coming year and compare to actual numbers for the current year. Ask the board of directors to discuss and approve the projected budget.
Evaluate performance. Review your programs and your employees once a year. Set goals and objectives for both people and activities.
File your forms. File your nonprofit’s 990 Form with the Internal Revenue Service when it’s due (four and a half months after the close of your fiscal year), and prepare any required reports for state and local authorities.
Have a party. Recognize and acknowledge your organization’s volunteers, board members, and employees with at least one celebration every year.
Review your insurance. See that you pay your annual premiums in full and that your organization is covered for all risks.
Prepare a fundraising plan. Make realistic estimates and prepare an action plan showing how the organization’s fundraising activities will be carried out for the upcoming year.
Communicate with donors. Include them in your news and events throughout the year.
Back up your computers. In fact, you should do this task weekly, but it’s often forgotten. Don’t lose your nonprofit’s donor list or financial records due to a computer crash.
Review terms of board members. Make a chart to keep track of when officer and board member terms expire, reminding you to recruit new members and fill officer slots.
Read your organization’s mission statement. Better still, frame it and hang it over your desk so you’re always reminded of why you’re doing what you’re doing.
Review your organizational plan. Plans are made to be followed and, as necessary, revised. If you haven’t looked at your organization’s plan in a while, do so now.
Take a vacation. You’ll come back to work with new ideas and renewed energy.