NVCF Blog

So, you want to start a nonprofit

You’ve had this itch to do MORE lately, to dig in to really fixing the problem you see everywhere; you keep meeting more and more people who care about the same things, and you want to GET ACTIVE, on a big scale!

Or maybe you’ve worked for years on a cause you care about, and you’d like to ramp up the amount of support you’re getting from donors. You want to apply for grants and be able to spend money without dipping into your own bank account again and again.

You should start a non-profit! Right? Isn’t that what you do to make a big difference in the world?

Well…

Some of the basic reasons for establishing and maintaining a nonprofit corporation (yes, “corporation!”) are 1) to secure operational necessities like legal protection or liability insurance for programs, 2) to allow supporters to claim a tax-deduction for their donations, 3) to maintain a bank account for expenditures related to programming, like occupying space or paying employees, and 4) to receive and spend use-restricted donations and grants.

If all of this sounds a little “in the weeds,” that’s because it is. What does any of that have to do with your passion for clean water, for teaching kids to read, for caring for veterans? Ask yourselves a few questions before jumping aboard the 501(c)(3) train:

  • Do we have clearly-defined, measurable goals?
  • What’s the most effective way for us to achieve those goals?
  • Do we want to spend time, money, and effort on administration, human resources, accounting, managing contracts and vendors, tax filings, and compliance monitoring?
  • What’s not working about our current arrangement? Could it be simplified to better serve our mission, or is a more complex structure absolutely necessary?

Non-profits are often started by dreamers and charismatic leaders who inspire others with their passion. They attract people to their cause because it comes from their heart. That’s powerful! Starting a corporation can sometimes help grow that passion and serve the mission even better. But it can also be the pile of paperwork that ends up snuffing out passion. Make sure you know what’s at stake for your heart before diving in to the business of non-profits!

Interested in another way forward? Learn more about opening a fund with the North Valley Community Foundation! Tax-deductible donations, event insurance, grant sponsorship, and much more are right here waiting for you, no new non-profits required! nvcf.org/nonprofits-agencies

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