Starting a non-profit business will offer you a great sense of achievement as well as help you retain more funding and donations. If you have a great cause to support, then you need to learn more about the non-profit basics.
When you are considering starting a non-profit business, there will be a number of steps that you will have to take. It is not the same as opening a for-profit business where you only need to file certain types of tax forms and licensing files with the state and federal government.
The non-profit process includes:
- Having a worthy cause
- Applying for non-profit status
- Finding funding
- Understanding charity
If you are completely lost and wonder how do you start a non profit foundation, you’ve come to the right place.
Starting a Non-Profit Business - The Basics
1. Determine the Potential Support Base
The first thing that anyone needs to have before starting a non-profit business is a worthy cause. Without a cause that other people will find worthy, then you will discover that funding becomes scarce and all of your hard work will be in vain.
This doesn’t mean that you should abandon your cause just because you think that others aren’t going to be interested in supporting it; it means that you need to do some research to find out how large a support base you may have.
Starving children, abused pets, the environment, and political campaigns are all common causes that millions of people support with their time and money through the years. If your cause is one that is common, you want to make sure that you’re doing it for the right reasons, especially if there is another non-profit business within your area.
2. Determine Your Dedication to the Cause
If you want to devote twenty hours a week to this non-profit business, that’s fine. If you are willing and determined to devote 80 hours a week to it, that’s wonderful, too. Whatever the case may be, just be honest with yourself about your commitment to it. Starting a non-profit business will be an investment of your time, effort, and money and if your ambitions are greater than your willingness, then you could be throwing money and time away.
3. Have Reasonable Goals
You may want to end the plight of abused and neglected sea turtles around the world, but that is like wishing for world peace. It’s noble, but not practical. At least not when you are starting out. Establish reasonable goals that you can actually see through to fruition. As you begin to accomplish these goals, then you can add more or bigger ones to your list. Until then, keep focused locally and small.
Applying for Status
One of the advantages to starting a non-profit business is the tax exemption status. In today’s society, though, there are different levels of tax exemption, so just because you apply for a non-profit status, that doesn’t necessarily mean you will receive full tax exemption status.
Visit your local county government town hall and request a meeting with the proper personnel. These individuals will be able to answer any and all questions that you may have about your non-profit application. They will be able to inform you whether your business would need to be housed in a facility not attached or part of your primary residence. They will also be able to instruct you on which exact forms you would need to fill out and file with the local government, state, and federal government as well.
Not all non-profit applications will be approved. Sometimes you may be required to adjust your plan, location, or other aspects of the business model to fit the requirements for non-profit status.
Additional resources:
Finding Funding When Starting a Non-Profit Business
Just like any private, for profit business, it is important to find the right funding for your endeavor. While you can certainly lean on family and friends for financial assistance, you’ll likely require more than they can provide.
Setting up fundraisers is a great way to establish your future plans as well as attract other like-minded individuals who believe in your cause.
Through these fundraisers, you will have the opportunity to present the value that your future non-profit business will offer to the residents and supporters. Be certain, though, that you apply for and receive approval for any fundraisers that you do as these will be monitored by your local government agency.
Any and all moneys raised during your fund-raising activities will need to be completely devoted to your non-profit business.
Charity is often mistaken by people. It is not simply about giving money to a cause and assuming that those funds accomplish great things.
While your non-profit business will be for something wonderful, you will still have administrative expenses to cover, such as wages and salaries, leases, and more. Being forthright with your funding sources will go a long way toward establishing powerful and long-term relationships.
Additional Resources for non-profit funding:
- http://www.usa.gov/Business/Nonprofit.shtml
- http://www.501c3.org/blog/how-to-get-funding-for-your-nonprofit-part-ii/
When you are planning on starting a non-profit business, you will be taking a great step into a greater world. By having the knowledge at your disposal that will make the process smoother will increase the opportunities that are available to you and your future ambitions.
What Do You Think?
Do you have any experience with starting a non-profit business that you would like to share?
