How to Start a Nonprofit Organization in 2022

Written By Dennis Cleary  |  Blog  |  0 Comments

During the pandemic, many of us looked for something new. Whether it was adopting a dog or going back to school, or even a career change, a lot of people wanted to change things up.

If you decided to change more than just yourself, and are looking to start a nonprofit organization, we’re here to help. We made a checklist of things you should do, and a few things you legally have to do, to start a successful nonprofit organization. 

At the end, be sure to check the FAQs for anything you did get answered. Our list of steps is pretty straightforward, but read below to make sure you understand every facet before launching head first into the unknown.

  1. 1
    . Identify the need
  2. 2
    . Identify the people 
  3. 3
    . Identify your action
  4. 4
    . Register with your state
  5. 5
    . Bylaws and Articles of Incorporation
  6. 6
    . Filing for EIN and a Bank Account
  7. 7
    . Compliance and Internet Presence
  8. 8
    . Do Work

Steps One Through Three

Making the decision to start a nonprofit is really the first step—so if you’re reading this because you’re already decided, congratulations! You’re one step closer, already. Whether you’re still on the fence, or you’re already posting on social media about your idea, be sure to run through these first three steps. Writing them down and keeping them visible will keep you on track and make sure you’re dedicating your time effectively.

1. Identify the need

There’s an old adage in business that if you don’t believe in your product, no one else will, either. That’s especially true of nonprofit work. There are thousands of groups already hard at work in the world, feeding people, building homes, helping educate, and serving communities.

Before you spend your hard earned money and hard fought-for time building a nonprofit, you need to make sure you have identified a real need in your community or the world. And you need to do your research to make sure that someone isn’t already doing the work you have in mind. 

It may sound harsh or coldly pragmatic, but no matter how passionate we are about our ideas, if there’s no solid need for fixing a problem you may find it difficult to get your project going.

So do your research and find out everything you can about your issue. If your nonprofit is feeding homeless parrots, find out everything you can about parrots, homeless pets, the cost of pet food, and even community health concerns regarding avian populations. The more you know about your subject going in the better your chances of success.

2. Identify the People

This step is three fold. First, in your research you hopefully found out what people will be directly impacted by your nonprofit. That could be read another way: what people are directly suffering because your nonprofit doesn’t exist yet.

That’s the first group of People you need to identify: who you will be helping.

The next group of people you need to identify are the People who will be helping you. And you need to make sure it’s not just a list of your friends and relatives. As much time and energy as they may offer, they might not be the people that can benefit your nonprofit the most.

So look for volunteer workers in a related field, or experts in your subject. Back to homeless parrots, find passionate employees at pet stores, or look into social media groups for people interested in related fields.

The third group of People you need to look for are the ones already doing related work in your area. These people might not be able to help you, directly, with time or money, but they can be invaluable allies and sources of knowledge. 

Again, the three groups of People you need to identify are: who you will be helping, who will be helping you, and who is already in the field.

3. Identify your Action

This is one of the most crucial steps in the whole process. We all know what needs society has, and we can usually come up with long lists of People in step 2. But in step three, you now need to identify the specific action you’re going to take to fill the need, and address the people in need.

This step needs to be as specific as possible. Some people use the S.M.A.R.T. guideline for setting an action step: Specific, Measurable, Attainable, Relevant, Time-Sensitive.

Your Action can’t simply be to feed the parrots. How will you feed them? What will you feed them, and when? When we identify our Actions, we follow the SMART formula to come up with something we can communicate to others for donations, for their time helping us, or for getting the word out about our ideas.

Here’s an example: “I will feed homeless parrots once a day, with grain donated by local pet stores. I will feed the parrots 100 yards from the public fountain they gather at, freeing up the area for human enjoyment, and training the parrots to move around more. My first planned feeding is in 60 days.”

This Action has specific parameters, so that you can get local people on board and help negotiate issues later down the road. It’s measurable so you can tell donors whether you’re meeting goals. It’s attainable so volunteers and you can all feel like you’ve done well. It’s relevant to your needs and the needs of the community, and it’s time-sensitive so that you have deadlines to motivate yourself and others.

Identifying an Action is what propels your nonprofit from an idea to an actual Organization, ready to file paperwork, get donations, and start doing good.

Steps Four Through Six

Now that you’ve Identified a Need, the People with the Need and the People who will help you, and you know what Action your nonprofit will take, it’s time to file paperwork to make sure everything is legal and above board.

You can never be too safe with this paperwork. For some people it makes sense to bring in a friend or other advisor who has experience filing paperwork with the state, or even hiring a third-party. In either case, before you take any money from donors or put your name on anything, file your paperwork.

4. Register with your State

This step is very important, not only legally, but financially, as well. Without proper registration you could get into trouble for doing your work, and you could get into even more trouble for accepting or asking for donations.

Before you file any actual paperwork, you’ll need to find a name for your nonprofit. Remember, this is the name that your organization will be known by legally and perhaps what your website will be (step 7). So do a little research and make sure there isn’t already an organization or company with your desired name. Also, keep it simple. Sometimes the more elaborate a name the more difficult it is to communicate what it means.

The rest of the process in every state is a little bit different, so we’ve got two general modes you can follow for getting registered with your state. The first is to simply do an internet search for filing as a nonprofit in your specific state. And here’s the key: only click on links whose internet address ends in “.gov”. The link you will want is usually the Secretary of State for the state where your nonprofit will be physically located.

Using this mode means doing a lot of your own legwork, and finding out all the requirements for your state. But it also means not paying as much money; you’ll only have to pay the fees required by your local jurisdictions.

The second mode is to use an online filing service. These third-party services will charge you a flat rate to set up your nonprofit and file the necessary paperwork with your state. This route is more expensive, but is a definite option for anyone who wants to focus more on doing the nonprofit work, and less on filing paperwork.

5. Bylaws and Articles of Incorporation

This step is sometimes required as part of step four. Bylaws and Articles of Incorporation are legally required at some point for any business wishing to have certain legal protections. This paperwork officially sets up your nonprofit as a different legal entity than yourself or anyone who works with or for you.

You can find lots of free templates online for both of these things, or you can also use the third party services. In fact, many of the third-party companies that will file your state registration will also make up your bylaws, articles of incorporation, and even file for your EIN (next step).

6. EIN and Bank Account

An EIN is the Employer Identification Number, and it’s sort of like a Social Security Number for your nonprofit. All companies, for-profit or otherwise, are required to have an EIN so that the federal government can track what money goes in and out of them.

For instance, in order to set up a checking account for your nonprofit, the bank will require you have an EIN for the organization. And you will absolutely want a separate bank account for your nonprofit than for yourself or other businesses.

The reasons for having a separate bank account are numerous, and all of them are important. First, you want to always be able to show people, in black and white, that your money is separate from your nonprofit’s money. All donations will go through the nonprofit account, so no one will ever have cause to suspect anything. Second, all money coming out of your nonprofit is coming through the same account, whether it’s paying for parrot food or paying for volunteer’s donuts and coffee.

An EIN will also help you in case you want to file for 501(c)(3) status later on, or if you ever want to do work outside of your original state. In short, you can start feeding the parrots without an EIN or bank account, but you’ll want to make sure you get them done much sooner than later.

Steps 7 and 8

Now that you’ve got your plans in place, and your paperwork filed, it’s time to start doing some work. You’ll want to look into the different compliances you need to meet and follow, make a website or create some other online presence, and you’ll want to get boots on the ground, feeding those parrots.

7. Compliances and Online Presence

Depending on the type of work you’ll be doing, you might find yourself filing more paperwork and getting brick-and-mortar licensing, or you may focus only on your internet presence.

Really these decisions will be informed by what you Identified in steps one through three. If you’ve identified a need for an actual building downtown where people can bring homeless and injured parrots they find, then you’ll need to look into city and state ordinances for business and occupancy taxes, animal handling permits, and food and health safety paperwork.

But if you’ve identified only a specific need for meeting once a day in an area crowded by parrots, then perhaps a simple blogspot, website, or even social media group will be enough for you and your group to get started. 

Whatever the case, you’ll want to make sure that you’re always compliant with state, local, and federal laws concerning your organization model. And this is where the third group of People you identified will really come in handy. People who are already in homeless animal outreach or experts in parrot-ology will be much more help than any other resource you could find.

8. Do Work

The planning, the paperwork, and the thinking are all done, now. Here’s where you get to put your best intentions into good work. And only you can do it. This really is a step in how to start your nonprofit organization because it’s what separates dreams from realities.

Write down your Actions, and keep them S.M.A.R.T. Then, as long as you're doing the work, your organization will be a reality.

Started but Never Finished

This guide has only been meant as a list to get you started. But work will always need to be done. We hope someday you’ll completely solve the homeless parrot problem, but there will always be a need for good people doing good things. So our real hope isn’t just that you find a way to start your current nonprofit organization, but that you find ways to keep starting new ones.

FAQs

Can I Make Money With A Nonprofit?

You are, but not the nonprofit. Essentially, you can assign yourself a salary to work for the nonprofit, and you can even give out salaries to other people. But the organization itself cannot take profits earned at the end of a fiscal year and pay it out to shareholders or employees.

Can A Nonprofit Do Business In Multiple States?

Generally, yes. But before soliciting donations in any state, check on their Secretary’s website for how to make sure you’re doing it legally.

Can I Start Doing Work Before My Paperwork Is Filed?x

Absolutely. There’s no crime against doing good deeds. The main reason to file your paperwork is when it comes time to accept or solicit donations or act in any financial way. Until your paperwork is filed, your nonprofit cannot have a bank account, cannot accept money, and cannot ask for donations.

Can I Pay Employees As A Nonprofit?

Yes, just like we said above. If your nonprofit is bringing in enough donations to pay for staff, then you may do so.