The first step in starting a non-profit organization is to create a mission statement. This outlines the overall purpose of the organization. The mission statement should state why the organization exists. A non-profit organization can be an informal group made up of a group of friends. Or, the organization can incorporate to become a legal entity that owns property and has a bank account. If your organization incorporates, then you will need to find financing to continue to feed and grow your operation.
Financing
Initial financing for your non-profit organization will require money for fees to file the organization's charter. A charter must be filed with the state office and with the IRS to receive its 501(c)(3) -- the organization tax-exempt status. While planning the financial future of your organization, you will have to think about daily operating costs. An office location will cost rent and utilities. Will your organization be run by volunteers or will you hire employees? If you hire employees, then you will have to think about payroll and other benefits such as health care, business and unemployment insurance.
Sources of Income
In order to tailor your non-profit organization's need to fit your individual mission, you have to find the appropriate mix of income to benefits. Income can come from a variety of sources, including: earned income, membership fees, gifts and grants, donations (from individuals, foundations, and corporations), government funding, investment income and trading of services. Now that you have identified the sources, who will pay and who will benefit from your organization?
Who Benefits
Those who can benefit from you organization fall into four categories: private, group, public, and trade. Private benefits are received by the individual consumer. Group benefits are for identifiable groups. Public benefits are bestowed on society. Trade benefits can be given to individuals or institutional partners. In order to design the best financial strategy, a non-profit organization has to understand the benefits it can produce. It also must consider the income it can generate, and how the organization can properly finance and maintain its profit goals.
Assistance
If your organization does not have sufficient resources to handle its start-up cost, you can get a fiscal sponsorship. You can join with another non-profit organization that is already established and running. This type of sponsorship is especially good if your idea can address a community need that is short lived and will no longer exist in the future.
Non-profit incubators are designed to help businesses share resources as a low-cost means to start up your non-profit organization. For assistance, contact the National Council of Non-profit Organizations to get advice on get financing for your non-profit organization.
Expert Insight
The best way to get financing for a non-profit organization is to first plan a budget. The organization needs to know its expenses -- how much will be spent and the expected revenue over a certain period of time. Seeking advice from a lawyer who has experience with non-profit organizations can be beneficial. An experienced non-profit attorney may already know ways that your organization can obtain financing to start-up your organization.
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