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I Started My Nonprofit, Now What?

  • Posted on Dec 15, 2016
3d Community puzzle

 You did it.  You put in the hard work to become a bonafide nonprofit organization, verified by the Internal Revenue Service.  Congratulations!  But what do you do next?  This is a common question of many novice nonprofit founders.   One of the biggest mistakes new nonprofits make is starting without a clear plan of action on how they will sustain the organization long term.  It is common for new nonprofits to jump right in and start providing services in line with their mission.  It makes perfect sense as the nature of their existence.   Yet,  taking a step back to establish order and a solid foundation,  is the best approach for any new nonprofit. 

Assuming you have a location to operate your agency, as a novice nonprofit executive or new founder, there are five actions you should take within the first 90 days of receiving your IRS Determination Letter

  1. 3d Community puzzlePut the Right Leaders in Place– Nonprofits are different than typical corporations in that, they are governed by a volunteer board of directors who are, for the most part, prohibited from receiving any paid compensation. This will usually mean that the founder initially serves as the Chair person and Executive Director.  However, it is in the best interest of the organization to quickly identify a suitable Chairperson, to avoid the perceived conflict of interest that ensues when both roles are occupied by the agency founder.  According to the Nonprofit Quarterly, establishing separate roles between the Chair and the Executive ensures objectivity and fiduciary well-being, thus increasing board equity and integrity.  Selected leaders should not only possess the commitment to your mission and vision, but also the field knowledge and willingness to provide financial and influence support.
  2. Develop a Formal Strategic Plan– Beginning with reviewing the initial mission statement you developed during your IRS application process to become a 501 c 3 charitable organization, examine your mission with your Board of Directors. Once your board has voted on the mission and formally adopted it during your board meeting you are ready to begin a strategic planning session.  During this session, you will establish the goals and objectives of the organization, create organizational policies and procedures, a staffing plan, fundraising plan and a formal financial plan, which includes an operating budget. 
  3. Start Raising Money– It goes without saying that as a nonprofit organization, you will need to raise funds to operate. For this reason, the fundraising plan becomes one the most important plans you can develop as you start fulfilling your mission.  Once you have opened your bank account and obtained the proper solicitation documents you are ready to start raising money.  Your board members should be your first ‘go to’ supporters to get your nonprofit off to a good start financially. Once again, your board is key to setting the culture of the organization and should be selected very wisely.  They should be appointed based on their ability to move your vision and mission forward.  Board members with influence and affluence can be instrumental in helping to raise funds for the organization.  Next to your board members, one of the fastest ways to raise funds is through an individual giving campaign, which might include a fundraising event or mailing campaign.  Other ways to get start-up funds is by applying for a mini-grant, which are often created for small projects or new nonprofits.  They are grants that are less than $5,000 and are usually project specific.
  4.  Collaborate with Others- Two are better than one.  Connect with other agencies in your community who have a similar cause and or serve the same population.  When you seek collaborators, you accomplish two things, 1.) you conserve your agency resources by leveraging theirs and 2.), you position yourself to attract new funders.   Depending on who you choose to collaborate with, a larger agency may choose to include your agency in on grant funds they are seeking or partner with you on an aspect of an existing grant. Funders always look favorably on agencies serving the same population who decide to work collectively to solve the same problem.    
  1. Become Very Active in Your Community– This one seems pretty obvious, but surprisingly, yet, on average, the IRS has revoked the status of nearly 275,000 nonprofits who became inactive each year.   In addition to the collaborative connections discussed in number four, become a voice in your community.  Advocate (within IRS regulations) on behalf of your constituents, connect to your political leaders, host relevant events for the population you serve, speak at conferences or write articles in your community newspaper and become known as a resource in your community.  Another way to get connected in your community is to join your state or local nonprofit associations and nonprofit groups.  

There are several other best practices you should implement as you start your nonprofit, like hiring or obtaining help from an accountant, obtaining general legal counsel and assembling an advisory board if none of these professionals are on your board.   If your budget is tight, there are pro bono attorneys and accounting associations that offer volunteer services.  Contact your local business chamber to explore corporations who are looking to partner with the community and may be willing to offer their professional staff to help you accomplish your mission with a sound foundation. 

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