Turn Your Calling into a Career: A checklist for setting up a non-profit organization by Heleigh Bostwick

Turn Your Calling into a Career: A checklist for setting up a non-profit organization

So you're thinking about starting a non-profit organization. Great! Starting and running a non-profit organization can be a very rewarding experience, but it pays to plan ahead.

by Heleigh Bostwick
updated August 14, 2019 · 3 min read

So you're thinking about starting a non-profit organization. Great! If you're wondering what you need to do next, then look no further. The non-profit checklist below covers the basics of what you will need to know on your journey into the world of non-profits.

Why Plan Ahead?

Whether you're a seasoned business professional or a recent college graduate, starting and running a successful non-profit organization is in some ways similar, but in many ways very different, from operating a for-profit business. Many of the items on this checklist are not just a matter of form—they are an absolute necessity. Why? Because they ensure that your non-profit organization will be able to apply for and receive money from funding sources such as grants. Having all your ducks in a row also shows foundations, the community, and other businesses that you are serious about accountability, management, and sustaining your non-profit organization.

The Checklist
  1. Choose a name for your non-profit and register it with the state (and municipality if required) in which your organization operates. The name of your non-profit should reflect what your non-profit stands for.
  2. Develop a Mission Statement and Strategic Plan. These two documents are extremely important, as they will determine the focus and direction of you non-profit now and in the future.
  3. Consult with an accountant familiar with non-profit organizations. This is crucial due to the different set of tax laws that are involved in establishing and maintaining a non-profit organization.
  4. Determine whether you are eligible for 501(c) status. This is the all-important IRS tax designation that allows you to obtain private and public grants, low-cost postage rates and exemption from income, sales and property taxes. Most importantly, it allows individuals to donate money to you tax-free.

    To quality, your organization must be formed to benefit the public, a specific group of individuals or the membership of the nonprofit. Examples include religious organizations, charitable organizations, political organizations, credit unions and membership clubs (such as the Elk's Club or a country club).
  5. Establish and adopt by-laws for your non-profit organization. Bylaws are the "rules" that govern your non-profit and are necessary to ensure that your organization qualifies for state and federal tax exemption.
  6. Create and file the Articles of Incorporation and by-laws for your organization. As part of its complete Non-Profit formation package, LegalZoom will help you incorporate your organization and prepare your 501(c)(3) tax paperwork. For more information, please visit LegalZoom's Non-Profit Services.
  7. Set up a Board of Directors. Consider choosing individuals who are both passionate about your cause and carry some weight in your community. An impressive Board of Directors serves as a tremendous resource to a non-profit organization and can often be a "make or break" factor in your success.
  8. Set up a bank account under the name of your non-profit organization and that is separate from your personal bank account or from any other business accounts you have
  9. Establish an annual budget for your non-profit based on operating expenses including salaries. Once the budget is created, it is possible to determine the amount of money required to run the non-profit.
  10. Develop a funding plan that includes funding resources such as grants, corporate and private donations, in-kind contributions, and volunteer hours
  11. With the help of your accountant, set up record keeping and accounting processes. This is particularly important in the eyes of the IRS and key to maintaining your non-profit and tax-exempt status.
  12. File any necessary local, state and federal tax, licensing, and permits that are required such as obtaining a federal EIN (employee identification number) by filing IRS Form SS-4, applying for a business license from the city and/or state, obtaining a certificate of occupancy for a building, or building permits if you are planning on renovating any part of the building in which your non-profit agency is located. LegalZoom can help you with many of these requirements. For more information please visit LegalZoom's business services.
  13. Develop human resource related policies and procedures manuals if you are planning on hiring additional employees.

Starting and running a non-profit organization can be a very rewarding experience, but as with any business venture, it pays to plan ahead in order to avoid the bumps along the road. With an organized plan, there is no reason why you can't turn your calling into a fabulous and meaningful career. Click here to learn more.

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Heleigh Bostwick

About the Author

Heleigh Bostwick

Heleigh Bostwick has been writing for LegalZoom since 2006, touching on topics as diverse as estate planning and kids, c… Read more