Global Family Law Services

How to start a nonprofit in five (not so) easy steps

| May 23, 2016 | Charitable Donations, Non-Profit

This article originally appeared as a column for the Cleveland Jewish News.

Most people prefer to direct their philanthropic dollars toward an existing organization that is dedicated to the cause of his or her choice. And, there is a very good chance your preferred cause is being serviced by at least one – and maybe many – organizations.

GuideStar, perhaps the largest databases of IRS-registered charitable organizations, lists more than 4,400 Jewish nonprofits. If the performing arts are your thing, you will find more than 30,000 options for consideration. International human rights organizations? More than 800 are available for your perusal. From animal protection to domestic violence victim support to veteran services you can almost certainly find an organization to which to donate your philanthropic dollars.

On the other hand, maybe you are unsatisfied with your options, for whatever reason. Certainly, it is very possible to start your own nonprofit organization, whether to fill an unmet need, or simply do it better than the organizations already doing what you want to do.

At its most basic, starting a nonprofit is like starting a business. You will want to:

• Identify your organization. Create your mission statement. What cause are you supporting? Now refine it. A charitable organization dedicated to “helping animals” is too broad and ill-defined to succeed. An organization dedicated to preserving honey bee colonies in Northeast Ohio, focusing on support for local apiaries and beekeepers, as well as public education and outreach regarding the importance of honey bees to the food chain? That is specific enough to focus efforts and attract dollars from interested donors.

• File your paperwork. You will need an official – and unique – name. You will need to register that name with the Ohio Secretary of State. Apply for a federal employee identification number. And, perhaps most importantly, you will need to apply for your tax-exempt status. You may want to seek help from a lawyer experienced in nonprofit law for this step.

• Set up your business plan. How do you intend to fundraise? Do you believe you will get funding from other sources, such as the United Way? What are your projections for funds raised in year one? In year five? How will you spend those dollars raised? Will you, personally, work for free or will you get paid? What will you spend on fundraising? Even the best-run charitable organizations have overhead costs. But you will want to make sure those costs are as low as possible so that you can channel the fruits of your fundraising labors toward the cause you want to help. You may wish to have an accountant involved in this step.

• Organize your organization. How will you complete basic office tasks like making phone calls and copies? Will you have physical office space? Work from a home office? Will you have employees? A bookkeeper? What will your record-keeping system look like? Your accounting system? An accountant can be useful for this step.

• Advertise, fundraise, and start your good work!

*Andrew Zashin writes about law for the Cleveland Jewish News. He is a co-managing partner with Zashin & Rich, with offices in Cleveland and Columbus.