Archive for the ‘Start a nonprofit’ Category

I’m reposting this entry from January 2008, because this question has come up several times this week.

Too often I hear people referring to ALL nonprofit organizations as a 501(c)3 and they are not. So, I thought it would be beneficial to list the various types of nonprofits.

Here is a list from Internal Revenue Services of the types of nonprofit organizations:
501(c)(1) — Corporations organized under acts of Congress such as Federal Credit Unions
501(c)(2) — Title holding corporations for exempt organizations
501(c)(3) — Various charitable, non-profit, religious, and educational organizations (see below)
501(c)(4) — Various political education organizations (see below)
501(c)(5) — Labor Unions and Agriculture
501(c)(6) — Business league and chamber of commerce organizations (see below)
501(c)(7) — Recreational club organizations
501(c)(8) — Fraternal beneficiary societies
501(c)(9) — Voluntary Employee Beneficiary Associations
501(c)(10) — Fraternal lodge societies
501(c)(11) — Teachers’ retirement fund associations
501(c)(12) — Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies and like organizations
501(c)(13) — Cemetery companies
501(c)(14) — Credit Unions
501(c)(15) — Mutual insurance companies
501(c)(16) — Corporations organized to finance crop operations
501(c)(17) — Employees’ associations
501(c)(18) — Employee-funded pension trusts created before June 25, 1959
501(c)(19) — Veterans’ organizations
501(c)(20) — Group legal services plan organizations
501(c)(21) — Black lung benefit trusts
501(c)(22) — Withdrawal liability payment fund
501(c)(23) — Veterans’ organizations created before 1880
501(c)(25) — Title-holding corporations for qualified exempt organizations
501(c)(26) — State-sponsored high-risk health coverage organizations
501(c)(27) — State-sponsored workers’ compensation reinsurance organizations
501(c)(28) — National railroad retirement investment trust
501(d) — Religious and Apostolic associations
501(e) — Cooperative hospital service organizations
501(f) — Cooperative service organizations of operating educational organizations
501(k) — Child care organizations
501(n) — Charitable risk pools
521(a) — Farmers’ cooperative associations
527 — Political organizations

To get more detailed information go to http://www.irs.gov/pub/irs-pdf/p557.pdf pages 60 and 61 give you an Organizational Reference Chart. It is a very handy tool when deciding what type of nonprofit you are starting.

I think when we hear free coming from a business we think there is a catch to it, and while there can be, it isn’t always the case.

On Wednesdays from 10:30am to 11:30am, I have blocks of 15-minute time slots set aside for people to use to ask questions about the start-up process for creating a nonprofit. While this event has had some attention, I am hoping that every Wednesday for that hour I’ll be completely busy answering questions. I truly want to help you get started. There’s a lot to consider when starting a nonprofit, and it is all doable. I’m here to encourage you, and if you decide you want to use my services to start your nonprofit that’s absolutely fine too!

So, I thought I would share a question that I answered from one of the calls I’ve had so far. Perhaps this will give you an idea of what to ask as you consider your nonprofit vision.

What percentage of overhead should be included in your budget?
As I stated in an earlier post Budget-Fudge It, your budget needs to be thought through careful and absolutely realistic. If it will cost you more in overhead than the program itself, you need to show that clearly in your budget and you program documentation. This is where an accountant would be instrumental in helping you filter through the finances of this organization creation.

Take the time to Interview several accountants, if you don’t have one. Make sure to let them know you are creating a nonprofit. Find out if they have worked with a nonprofit before, and just how familiar are they with the 990 form. (This a special form that you’ll have to fill out for taxes as a nonprofit.)

If you need recommendations for accountants, here are a few places to try for referrals: 1) Local Chamber of Commerce, 2) Local Business Network International (BNI) group, 3) referral from family or friends, and 4) referral from other business owners.

Remember, if you have a question regarding your start-up nonprofit, please select a time during my free office hours on Wednesday from 10:30am to 11:30am, and get an answer!

The Super Bowl is the pinnacle of the football season.
Fans wait to see who will make it to this prestigious spot, teams work hard one
game at a time to get this spot, and then finally two teams make it, and only one
walks away the winner. Congratulations to the city of New Orleans and the New
Orleans Saint!

So how will you know when you’ve made it to the summit of
your business adventure? What milestones have you set down for yourself? We’ve
talked many times about setting goals, and it seems only fitting to do it again
this first quarter of the year. It is time for you to clearly identify what
will mark arrival for you as you travel this business development journey.

Success is very personal, and yours will not look like
someone else’s so please don’t compare. Be specific about what small steps you’ll
need to take to make sure that you stay focus on your stuff.

Here is a great article I read today that I found helpful
in setting goals: Creating S.M.A.R.T. Goals.

Why does dessert follow dinner? Why do we wait to have
the most anticipated part of dinner for after we’ve stuffed ourselves with the
sensible part of dinner?

About two years ago, Stacy Brice, owner of AssistU, had a
What’s Next retreat where six fabulous women business owners met to work on
taking our businesses to the next level. Stacy planned this weekend event so
that we spent our dinners together. On this one night, I decided that I really
didn’t want dinner. What I wanted more than anything was to have some crème
brulee, first! So, I ordered my dessert. It arrived at the same time as
everyone else’s dinner. We ate our food, and then it was time to order dessert;
I had another crème brulee.

I’m sure you’ve heard the saying, “Go for what you really
want!” Well, that’s exactly what I’m saying in this post. Don’t settle for just
getting the job done, but actually go for the highest thing you can imagine for
you and your business. Take the steps to make your new nonprofit exactly what
you envision it can be. And, take your time making that happen. My friend Dawn
Goldberg is launching a new site with exciting new news. Her goal was to have
it released this Friday past, but it wasn’t up to her specifications. So, she’s
delaying her launch until she’s got exactly what she wants to present to the
public.

Nonprofit Connectors (affectionately called NPC) is a year old this month! It’s been an amazing journey to see my business go from a thought at Stacy Brice’s What’s Next to the reality it is today.

We experienced a huge setback early this year, when our community
portal crashed, and we were unable to save it. However, we do have it on the planning
board to re-introduce it the upcoming year. The community portal will be
another place for support and building relationships with other nonprofit
organizations.

Another great accomplishment has been the submittal of
three articles posted on several article submission sites. The upcoming year
finds me writing at least six more articles specifically for individuals
starting nonprofit organizations. We moved the website to the TypePad site. So,
you’ll see very nice buttons on the side bar (thank Jon Nix) that allow you to
access the web pages. In addition, NPC has had the pleasure of helping
individuals complete the 1023 form and attachments.

Out upcoming goals the first quarter of the new year
include: writing six articles, assisting at least six clients with the start up
process, and finalizing a resource tool we’ve been working on to help
individuals start their nonprofit.

So how can we assist you? Do you have a nonprofit idea that
you would like to have Showcased on our blog? Are you trying to start a nonprofit
and need assistance? Or do you have a burning question that you would like to
ask? Reach out to us; we would like to help make your nonprofit vision a
reality.

Directors & Officers Insurance (commonly referred to as D&O insurance), is often overlooked by nonprofits for the simple reason they are uncertain whether or not they really need D&O coverage. Read this article noting compelling reasons to protect your organization. This should reassure you that D&O insurance has significant value to even the smallest nonprofit organization.

When a person becomes a board member, she assumes a level of responsibility for the organization and thus exposes herself to claims for not managing the organization properly. Even if the case brought against a board is thrown out, the organization still bears the brunt of having to pay the legal fees. Legal expenses could be brutal for a small organization and could even put them right out of business.
In general, D&O insurance includes coverage of an officer or director in the discharge of his/her duties. This includes but is not limited to:

• Any actual or alleged act
• Misstatement or misleading statement,
• Neglect or breach of duty
• Omission and/or error

As with all insurance policies, read the policy carefully to ensure it includes all the necessary components for your organization. Here is a checklist of issues to review when looking to purchase D&O insurance.

Creating Press Releases

This isn’t necessarily a nonprofit specific topic, yet it is quite relevant. Press releases are an excellent source of marketing, and have the potential to connect you to the people you are trying to reach through your community work.

There are several great web resources that you can use to guide you through the process. Check out Microsoft Online free press release templates. There is no need to struggle in figuring out how to make this happen, just take the help and use it to your best advantage.

The key thing to note you must have a newsworthy piece to report. So consider what contribution your organization has, or will, make to the community, and write about it in five paragraphs or less.

Have fun spreading the word about the good works you are doing!

Setting up a nonprofit is complicated and overwhelming. So, make the creation of your policies and procedures basic. Here are five things that will help you to keep it simple:

Keep it general- At this point in the creation of your policies, your goal is to keep it basic. You are only doing the preliminaries at this stage in the game. Once the final board has been identified, and put into place, then together you’ll revisit what you’ve started. It is up to the entire board to make the final decision on the policies.

Don’t reinvent the wheel- Take help and use available templates.

Make sure your policies support your Bylaws- We talked about the Bylaws and their importance. Make sure your policies agree with and support your Bylaws. You don’t want contradictions between the two.

Remember to tie in your organization’s mission statement- At all times, remember to reiterate your organization’s mission statement in everything you write, share, and produce. Your mission statement is one of the key elements of your organization; make sure to promote it.

Ease into the process - Don’t stress and feel as though you have to complete this document all at one time. As your organization grows and changes, you’ll find that you’ll revisit your policies quite often. This is a growing and changing document.

Enjoy this time of discovery as you explore the depths of what your organization can be!

There are many resources you can tap using the internet when starting a nonprofit. I thought it would be helpful to you to list some the resources I’ve found for clients.

About.com – There are a list of articles pertaining to the start up steps for a nonprofit. There’s a check list that you can follow to ensure that you’ve covered all your bases.

Free management library – Here you’ll find articles, websites, and resources for assistance. There is even a link to add a resource if you come across one.

Nonprofit Connectors – This is an online membership community. Not only does this site offer a community of nonprofit experts, there is also a resource database of over 200 resources consisting of books, websites, periodicals, and weblogs.

Idealist.org – This is a great source for nonprofit information from A to Z. There are articles that will connect you to resources for starting a nonprofit was well.

Foundation Center – This is a website that all new nonprofits should have bookmarked. It is full of resources for start up purposes, classes that you can take to build your skills, and grants/funding information.

Bookmark these sites and visit often.

Volunteers are every where; you just have to speak up and let people know what you need.

A client of mine runs a housing organization for low income families in Virginia. Well, she decided that in addition to helping people with their housing needs that she would also like to assist them with developing job skills. So, she reached out to many of her friends and asked if they would offer classes in their specialties. It has been a huge success. People are learning job skills, getting better jobs, and improving their financial outlook.

Another client is looking for board members. We’ve been scouring the various Leadership groups within Pennsylvania. Quite a few counties within many of the states offer Leadership programs. In Maryland we have Leadership Prince George’s County and Leadership Montgomery County. I know people who’ve graduated from Leadership Washington, DC and Leadership Alexandria in Virginia. What makes the Leadership groups a great place to find volunteers is that it is made up of individuals who’ve already shown an interest in their communities.

There are organizations that conduct searches for volunteers for your boards some for a fee, and others do it for the shear benefit of helping a nonprofit. I have used Volunteer Match one time to make a connection with a board group. It was a successful match, and now I highly recommend to others.

So, start right in your own back yard looking for volunteers. You’ll be surprised by the number of people you already know that are anxious to serve the community. They were just waiting for someone to ask for their participation.