Starting a nonprofit
31 August 2011 06:39:11
An individual with a public administration degree may be interested in starting a nonprofit organization to impact their community or the world. What sets nonprofit organizations apart from for-profit businesses is that the former does not seek financial gain for its members, directors, trustees or officers. Establishing this type of group takes planning, leadership skills, research and collaboration. These are all skills that someone with a master’s in public administration (MPA) will be able to demonstrate.
Overview of starting a nonprofit
Beginning the process of establishing a nonprofit is complicated and will take some thought. What individuals learned while earning their master’s of public administration degree courses will aid in the process; however, time should be taken to make sure everything is done correctly the first time. The following resources are examples and walkthroughs on the processes of building a nonprofit organization.
Starting a Nonprofit: This step-by-step walkthrough can help students figure out what they will need to do to start their nonprofit organization. It is created by the Pima County Public Library.
Thinking of Forming a Nonprofit?: This is a publication of the Center for Nonprofits in New Jersey and provides information on how to start a nonprofit from scratch.
How to Start a Nonprofit Organization: The U.S. Small Business Administration hosts this article, which discusses how to begin a nonprofit organization.
Starting a Nonprofit – What you Need to Know: Presented by a law school in Virginia, this article was created to help people understand the legal issues related to starting a nonprofit and to assist in the process.
What kind of nonprofit?
Once an individual has researched the basics of what is involved in starting a nonprofit, it is time to begin developing an idea. A good way to decide how to choose this concept is by looking at what nonprofits currently exist in the geographic location or area of interest. Some MPA programs may have resources on other local nonprofits, and students should inquire about what help their schools can provide.
Nonprofit Organization Search: This search engine provided by the IRS allows individuals to search for organizations that receive tax-deductible financial contributions. By using this tool, students can see if their nonprofit idea has already been created and they can get ideas on what other groups are doing in their area of interest.
Obtain a federal employer identification number (EIN)
When starting a nonprofit, individuals will need to obtain an EIN from the Internal Revenue Service (IRS) to establish the group as a legal organization. This will allow them to do things like open a bank account, file taxes, apply for licenses and fulfill other business needs.
How to Apply for an Employer ID Number (EIN): This explanation is from the IRS website and provides information about how a student can apply for their EIN online, on the phone, through the mail or by fax machine.
Apply For an EIN Online: These are a few tips for applying for a nonprofit’s EIN online, provided by the IRS.
Writing articles of incorporation and bylaws
These documents are important to the creation of a nonprofit because they establish how the organization is run and create the framework by which it functions. Articles of incorporation list the purpose and main aspects of the group’s governance. Bylaws dictate the internal structure and operations of the establishment’s leadership. In order to receive nonprofit status from the state and U.S. government, these documents are often needed.
State Filings List for Nonprofits: This is a list of the individual filing requirements each state has for incorporating a nonprofit organization.
Articles of Incorporation: This online service from the state of Illinois is an example of how a student might submit their articles of incorporation in their own area.
Corporate Filing Tips: Individuals should be aware of confusing areas in the articles of incorporation when they file. These are some tips from the state of California that are an example of things one might look out for.
Articles of Incorporation Files: These files are used for individuals to register for incorporation by mail in the state of Indiana. They can be used as an example of what students might find in their own state government offices.
Writing Bylaws: This resource was created by the National Center on Program Management and Fiscal Operations and provides a walkthrough of how individuals can write bylaws for their nonprofit organization.
Creating a business plan
A business plan is important for a nonprofit organization since it helps develop a direction for the group and guide its implementation. Students with an MPA will also use the business plan to present to donors, recruit leaders and gather volunteers. The business plan involves creating a description of the nonprofit’s resources, budget, mission statement and the problem it will solve. It helps communicate to others what the organization will do and how.
Writing a Business Plan: This is a step-by-step walkthrough on writing a business plan created by the Small Business Development Centers.
Resources for Writing a Business Plan: These are some essential resources from the U.S. Small Business Administration that can help students write a business plan for their nonprofit organizations.
Filing for federal tax-exempt status
When individuals with a master’s in pubic administration establish a nonprofit, the U.S. government gives them tax-exempt status for working to benefit society. This status is specified under 501(c) section of the IRS code and therefore is sometimes referred to by that name. Designation is only given after the proper paperwork is filed and materials submitted.
Filing a 501(c)(3) Organization: The U.S. Department of Agriculture provides an example of how to file for nonprofit status and students can refer to it for their registration purposes.
IRS Tax Information for Charities and Other Nonprofits: This is the IRS’ resources and information for nonprofits regarding tax purposes.
Once an individual has established their nonprofit organization and it is a legal entity, there are many resources available to help take the next steps in growing their creation. There are grants available, leaders for hire, donations to be secured and many other ways that someone with an MPA degree can put their abilities to work.
USA.gov for Nonprofits: At this website, students will find information and services for nonprofits. There are links to help them acquire things including grants, assistance, loans and advice.
Resources to Find Nonprofit Jobs: This is a list of online nonprofit resources provided by the U.S. Department of State that individuals can use to develop their nonprofit.
Grants and Nonprofit Resources: The Office of Faith-Based and Neighborhood Partnerships provides information on the grant opportunities for nonprofits available throughout the federal government.