How To Start A Nonprofit in 6 Steps

Do you have a passion you want to launch? Consider starting it as a nonprofit. When people launch businesses, they often incorporate “giving back” into their launching endeavor. Whether creating jobs in third-world countries or donating a portion of their proceeds to their favorite charity, these days, the concept of “volunteering” takes on a whole new meaning for entrepreneurs.

Although there are many ways to give back to your community through your for-profit business, consider starting your passion as a nonprofit from the get-go and taking advantage of all that this structure has to offer, plus the “feel good” aspect of going this route is unparalleled. Below are the top reasons to start a nonprofit and steps you can take to get started now.

1. Find a sponsor (or more than one)

Find a sponsor (or more than one) who will support your cause and effectively give you seed capital with which to start and operate your organization. For-profit companies are particularly interested in aligning themselves with causes because it helps their brand and raises their profile in the community. Use this as a selling point when talking to prospective companies. In fact, most companies allocate budgets to certain causes. Do your homework and find out which causes appeal to which companies based on their history of past alignments.

2. Consider pitching your cause

Consider pitching your cause to the marketing departments of these companies if they already allocated budgets for nonprofits for this year. Put a plan together as to how you will create awareness in the community for your target company making it compelling for them to work with you in this capacity.

3. Have a clear understanding

Make sure you have a clear understanding of your funding plan and don’t forget to allocate money to pay yourself and/or an assistant to help with day-to-day operations. Just because it is nonprofit does not mean that everyone works for free but it does mean that you can solicit people to volunteer their services and help out on the side of other jobs and careers.

4. Put together a board or a volunteer committee

 Put together a board or a volunteer committee and make sure you clearly define each person’s role or responsibility: Sometimes when people “volunteer”, they are less reliable. Make sure you set expectations both for yourself and for others.

5. Get someone on your team who has fundraising expertise 

Get someone on your team with fundraising expertise and ask them to help you create a plan. Fundraising is the equivalent of selling in a nonprofit. Key to your success will be the knowledge of how to do this effectively and how to structure your plan.

6. Do your homework and abide by the rules of nonprofits

The IRS has specific guidelines and structures that must be followed in order to claim nonprofit status and take advantage of the tax benefits associated with this structure. The difference between nonprofit and for-profit organizations is that nonprofits reinvest their profits; for-profits technically make distributions of their profits to their owners or shareholders. Make sure you understand the differences and how this impacts the way that you set up your organization from the beginning.

Not sure you want to start a nonprofit? Already own a business but interested in giving back?

Consider the following as alternatives to starting a nonprofit under a for-profit structure:

  • Donate a portion of the proceeds of any sales to your favorite nonprofit organization.
  • Create a special product or service and tie all sales to a nonprofit.
  • Manufacture your product in a third-world country and provide jobs for the underprivileged.
  • Manufacture your product in the United States using organizations that employ the mentally or physically challenged to package your product or handle certain aspects of it.
  • Consider partnering with a nonprofit organization to put on a special event and create brand awareness for both your company and your cause.

The most important thing is that you feel passionate about what you are doing and your cause. Your passion will radiate as enthusiasm in discussions with those that can help you and you will attract opportunities and money to get your idea off the ground.


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