How to start a nonprofit that lasts in 6 steps

While many nonprofits are set up each year, most don’t last more than a decade. Knowing how to start a nonprofit makes all the difference. Find out how here.

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Nonprofit Strategies
Nonprofit Strategies

How to start a nonprofit that lasts in 6 steps

While many nonprofits are set up each year, most don’t last more than a decade. Knowing how to start a nonprofit makes all the difference. Find out how here.

$

Raised

Supporters

Teams

While many nonprofits are set up each year, most don’t last more than a decade. Knowing how to start a nonprofit makes all the difference. Find out how here.

$

Raised

Supporters

Teams

Kylie Davis
December 16, 2021
June 15, 2022

So, you want to start a nonprofit—now what?

There are currently 1.54 million nonprofit organizations in the United States. Unfortunately, roughly 30% of these nonprofits fail by the 10-year mark, often due to a lack of planning. 

Fortunately, you don’t need a large budget or complicated technology tools to get off the ground.

Instead, you simply need a clear mission, a plan to attract (and retain) new donors, and a platform to amplify your message

Below, we offer a step-by-step guide on how to start a nonprofit, from the conception stage to launching your first campaign. We also dive into the tools you need to get started—even with a $0 budget. 

Please note, this post is meant for informational purposes only, and should not be taken as legal advice. For more information surrounding federal and state laws surrounding public charities, please contact an attorney.

How to start a nonprofit in 6 steps

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Launching a nonprofit organization—just like launching a for-profit business—isn’t easy. 

In fact, in 2020 alone, roughly one-third of all nonprofits were at risk of closing their doors permanently. To set your organization up for success, consider this overview on how to start a nonprofit.

1. Identify your “why” 💓

Before getting caught up in the legal requirements on how to start a nonprofit, you need to identify your why.

Ask yourself, “Why am I doing this? What problem do I wish to solve?” 

The answers to these questions will help guide you to your mission. Your mission statement is your organization’s purpose for existing and should be formally put into writing.

Once you (or your team) identifies your organization's mission, you’ll need to brainstorm other key qualifiers for your organization, including: 

  1. Your name: Naming an organization takes your inspiration plus some research. Before you fall head-over-heels in love with a name, search a domain directory (like GoDaddy.com) to see if a URL is available, and check which social media handles are available on Twitter and Instagram. 
  2. Your values: Your values help determine how you’ll conduct your business. For example, are there certain businesses or individuals you will not accept support from?

2. Conduct a competitive analysis 🔍

When you think of a competitive analysis, your mind might immediately revert to for-profit companies, who compete for market share. However, it's not that different within the nonprofit sector. 

Research shows that as of 2018, the average individual gives to three to eight different charities per year (depending on their generation). Millennials, for instance, give an average of $431 annually across three different organizations, while the Silent Generation gives $1,367 across 6.2 organizations. 

It's up to you, as a founder, to capture supporters' attention, explaining why they should give to you instead of other charities. Here are a few exercises to get started:

  1. Create a positioning statement: Do your research and make a list of other charities that are trying to accomplish a similar mission. What makes you different? This competitive edge will help you draft your positioning statement, explaining what sets you apart.
  2. Write a SWOT analysis: SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It's a way to identify key factors that will help distinguish your organization in the nonprofit sector. 

3. Gather your legal documents 💼

Before you can file for tax-exempt status with the IRS (Internal Revenue Service), there are certain documents you need to prepare. State tax exemption laws vary from state to state, so be sure to check your state's compliance guide on the IRS website

To get through this step, you may want to partner with an attorney or CPA to help navigate federal income tax laws surrounding charitable organizations. If you're going the DIY route, you will need to take the following steps:

  1. Understand the different types of nonprofits: To file for tax-exempt status, you will need to determine whether you are a nonprofit corporation, trust or private foundation, or association.
  2. Write your organizing document: As described by the IRS, you will need to draft either the “articles of incorporation for a corporation, articles of organization for a limited liability company, articles of association or constitution for an association, or trust agreement or declaration of trust for a trust.”
  3. Put your bylaws into writing: A nonprofit's bylaws are legal documents outlining how a nonprofit will be managed, operate, outline rules for board meetings, and settle conflicts of interest or internal disputes. Bylaw requirements vary from state to state, so be sure to check with the attorney general or secretary of state within your home state.

4. File for tax-exempt status 🏛

To become a tax-exempt organization, you need to file with the IRS. Once again, filing for federal tax exemption can be a complicated process, and you may want to get legal advice. To start, you'll need to fill out an IRS form and pay the associated fees: 

  1. File for an EIN: Every nonprofit needs an employer identification number (EIN). You can apply for one online.
  2. Fill out Form 1023: Form 1023-EZ is the Application for Recognition of Exemption under section 501(c)(3) of the Internal Revenue Code. (Before you start, be sure to review the instructions to ensure you're eligible.) Once finished, this form must be submitted electronically via Pay.gov.
  3. Pay any filing fees: There are fees associated with filing for tax-exempt status. View the appendix for more information.

5. Determine your organizational structure 👯

It takes more than one person to create an impact. Many existing organizations rely on an executive director, board of directors, and staff to accomplish their mission.

With that being said, you probably won't employ an executive team or board members in the beginning stages of your nonprofit—and that's ok!

To help cover the workload, you may want to recruit volunteers who are passionate about your cause.

To start:

  1. Create a volunteer recruitment strategy: How will you convince a team of passionate people to give up their free time to serve your organization? Consider capturing email addresses at fundraising events to start sending a monthly newsletter to attract new volunteers.
  2. Build a volunteer database: Set up a CRM system to keep track of current and potential volunteer contact information and past hours. In addition, ask loyal volunteers to help recruit new members to support your cause.

5. Strategize how you will raise funds 💸

A successful fundraising strategy will help ensure the survival of your startup nonprofit. Just like any small business, you’ll need to create a strategic plan (typically referred to as a business plan within the for-profit sector). Your strategic plan will create objectives for the next year, five years, and even 10 years down the road, ensuring all goals tie back to your mission and values.

To help accomplish your goals, you need the right tools. Be sure to consider these steps within your strategy session:

  1. Open a bank account: You’ll need a dedicated bank account to track tax-deductible donations and operational expenses. While different banks have different requirements, most require your articles of incorporation and your EIN number.
  2. Create a website: A website helps define who you are, what you do, and how you accomplish your mission. It also provides the necessary forms and contact information for new donors and volunteers to learn more and contribute to your organization.
  3. Integrate with a fundraising platform: Charitable solicitation is the backbone of all nonprofits. Integrate your website with an easy-to-use fundraising platform that collects a wide variety of payment methods

6. Start marketing your organization 📣

Once your organization is established and you officially receive your tax-exempt status, the work doesn't stop. Now, you must market your organization, attract new donors, and get potential volunteers excited about your mission.

To help provide the foundation to your nonprofit marketing strategy, consider starting with the following: 

  1. Launch a regular newsletter: Set an attainable goal to publish a monthly newsletter about the work within your organization. Inform your audience on upcoming events, how donations are being used, and any local or national news related to your mission.
  2. Build a social media presence: As a startup, you don't need to establish a presence on every single social media channel. Instead, do the research to find out where your audience hangs out online, and stick to a consistent posting schedule.
  3. Plan your first event: Consider launching an in-person, virtual, or hybrid event to attract new donors. Invite supporters through SMS and email, sending reminders through your marketing automation platform.

Start your nonprofit with Givebutter 

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Starting a nonprofit isn't easy, which is why many organizations don't make it past the 10-year mark. Hopefully, this guide helped set you up for success. 

To complete the steps of how to start a nonprofit, you'll need to determine your mission, file for tax-exempt status for the IRS, recruit staff and volunteers, build a website, and establish a marketing strategy. Lastly, you'll need the right tools and a team of experts to accomplish all of the above.

Givebutter is the only free all-in-one platform that can help startup nonprofits get off the ground. With 130+ fundraising tools at your fingertips, a built-in CRM system, and marketing automation features, its suite of services can help your organization get off the ground. Plus, Givebutter partners with a team of experts that can help answer your questions along the way.

Ready to launch your nonprofit with Givebutter? Create your free account to get started.


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Kylie Davis
Author

Kylie Davis

Givebutter Content Marketing Specialist

Kylie thrives on supporting others, making everyone’s jobs easier, and cinnamon in her coffee.

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What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

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Kylie Davis
Author

Kylie Davis

Givebutter Content Marketing Specialist

Kylie thrives on supporting others, making everyone’s jobs easier, and cinnamon in her coffee.