Non-profit companies offer a great way for an individual to be involved in a business that gives back to the public. You will probably never get rich running a non-profit company, but you will be able to make a living while enriching your community. The following steps will help guide you in your efforts to create a non-profit company.
Research Other Non-Profit Companies
Once you have an idea about how you want to serve the public with your non-profit company, you will need to look at other non-profits in your community. If your idea is novel, you will have a better chance of getting your company approved. However, if there are already organizations in your community that are doing what you plan to do, you will face a harder struggle in getting your business started. Sources like GuideStar and 211 call centers can help to discover if similar non-profits already exist in your community. Alternatively, you can also search the Internet for similar non-profits.
Identify Your Mission Statement
Once you have determined that another non-profit is not too similar to your proposed non-profit, you will need to spend some time developing your idea. A great idea and a solid mission statement are the first ingredient in any non-profit organization. Your mission should identify a hole or problem in your community, and it should identify how your non-profit organization will work with the public to create a solution to that problem.
After determining your mission, you will need to determine your revenue sources. The best non-profit organizations have a reliable and diverse money stream that allows them to run without worrying about how they are going to pay their utility bills or their payroll. You will also need to find the right facilities for your organization. Every non-profit has different needs for their facilities. You may be able to run a non-profit business out of a home office, or you may need to rent an entire warehouse. Your mission will determine your particular space, and your facility needs may change as your business grows and develops.
Acquire Proper Documentation
After your mission statement has been perfected, you are ready to start formalizing your business and presenting it to the public. Initially, you will need to file an article of incorporation with the Secretary of State or the appropriate agency in your state. Then, you will need to apply for tax-exempt status with the IRS (Internal Revenue Service). It can take anywhere from 12 weeks to 12 months to get your tax exempt status approved so you should leave a big window of time to complete this step. If you plan to do any fund-raising, you will need to register in the states where you plan to do your fund-raising. Most states have a charity registration office that can help members of the public who want to start a non-profit organization.
There are all kinds of non-profit companies. Some are small and affect the public in only their local community. Others like the ACLU (American Civil Liberties Union) or the American Cancer Society are large nationwide organizations. These large organizations have huge revenue streams and employ thousands of people. The role of a non-profit company is to improve life for the public in some way or another. This is the benefit that non-profit companies provide to the public. Non-profit companies also have several benefits. The main benefit of a non-profit company is that their profits are not taxed. They simply need to be re-invested into the company.
Starting a non-profit company may be difficult, but it is not impossible. If you get discouraged and want to take another path, you may want to spend some time learning more about non-profits by working or volunteering for one. Alternatively, you may consider starting a social enterprise instead of a non-profit. A social enterprise is a low profit company also referred to as a L3C. You may be able to serve the public with an L3C if you cannot get your non-profit started.
About the Author: Kristin Miller is a writer who produces articles in the field of public administration. This article was written to explain the steps to creating a successful non-profit company and to encourage further study in this area with a Masters in Public Administration Online.