volunteer holding cutout heart to chest
Building a team, finding community support and obtaining tax-exempt status are all key steps when building a nonprofit from the ground up. — Getty Images/Prostock-Studio

Running a nonprofit is a rewarding and meaningful experience, but getting started isn’t always easy. Nonprofits face many challenges, like finding funding, dealing with government regulations and finding staff members. Here are seven steps that can make this process easier.

Define the mission of your nonprofit

Defining your nonprofit’s mission statement is one of the most important steps you’ll take. This mission statement will play an instrumental role in helping you fundraise, attract staff and volunteers, and be a force of good in the community.

Your mission statement should explain the problem, the steps your organization is taking to solve this problem and the intended impact. It should be straight to the point, actionable and relatable.

Do your homework

Your nonprofit may have been born out of passion, but it’s planning that will ensure its success. That’s why it’s important to do your homework right from the start.

How much will it cost to get your nonprofit off the ground, and how will you handle financing? Are there any other organizations offering similar services in your community? If so, does it make more sense to partner with an existing nonprofit as opposed to launching your own?

And you’ll need to think about how you’ll build out the infrastructure to support your programs over time.

Build a team

Now it’s time to build your leadership team. The leadership team will drive the vision of your nonprofit going forward, so it’s essential to choose these individuals wisely.

At the very least, you’ll need a board of directors and an executive director. These should be individuals who are inspired by the vision of your nonprofit.

Once your nonprofit is a bit more established, you can bring on additional staff members and volunteers as well.

Throughout this entire process, you need to continue building momentum and support within your community.

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Legally incorporate

You’ll need to file the articles of incorporation to legally start your nonprofit. This will establish your nonprofit as a legal entity and is a necessary step to receiving 501(c)(3) tax-exempt status.

To file the articles of incorporation, you’ll need to know the name of your nonprofit, the location and the names and addresses of all board members. You can use this template from the IRS to get started.

Apply for 501(c)(3) status

Receiving 501(c)(3) status is a crucial step for your nonprofit because it allows you to obtain tax-exempt status. It also allows donors to claim their contributions to your organization as tax deductions.

Once you’ve filed the articles of incorporation, you’ll request an employee identification number (EIN) for your nonprofit. Once both of those things are in place, you can begin filling out Form 1023 with the IRS.

It can take time to receive 501(c)(3) status, but you can continue moving forward and raising funds in the meantime.

Identify local partners

Throughout this entire process, you need to continue building momentum and support within your community. That’s why it’s a good idea to identify local partners that might support your mission.

Other nonprofits, local businesses, and schools are all good places to start looking. When you approach these organizations, be sure to clarify what your nonprofit will bring to the table.

Forming the right partnerships is key to attracting new donors and better supporting the mission of your organization.

Build support within your community

The goal of your nonprofit is to meet a need within your community. So it’s a good idea to engage with your community, keep them updated on your progress, and let them know of fundraising opportunities.

It’s a good idea to stay engaged with your community through email and on social media. Consider adding a donation page to your website, so it’s easy for your supporters to contribute.

[Read more: Nonprofit vs. Not-for-Profit vs. For-Profit: What's the Difference?]

For more resources from the U.S. Chamber of Commerce:

  • Check out the U.S. Chamber's Small Business Loan Guide.
  • To help you manage your business through the coronavirus crisis, the U.S. Chamber of Commerce has created a toolkit for businesses and a customizable flyer for businesses to communicate their coronavirus efforts to customers.
  • For more information pertaining to your specific location, you can find your local Chamber of Commerce here.
  • The U.S. Chamber of Commerce Foundation has created a full list of programs providing financial assistance to small businesses impacted by COVID-19. You can find that here.

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Published April 03, 2020