Think Global and Act Local
Your Nonprofit Guru
An ongoing series of informational entries
Essentials for Starting Your Nonprofit
Lenora Williams: Posted on Sunday, July 31, 2011 2:44 PM
How to create your nonprofit?
First, do you need an attorney?
If you are truly a first time visionary you can create the nonprofit paperwork on your own. Lawyers or consultants are needed based on the complexity of your start-up and the amount of time you have to put into the paperwork. There are online services that help you walk thru the process like; www.legalzoom.com . You need a plan, a mission, a purpose and a minimum of one thousand dollars ($1,000), this is an approximate amount, to pay for the start up cost. Be prepared to carve out time to fill out the documents and answer a series of questions. While you do not need a full fledge business plan, you have to think about how much money it will take you in the first five years to manage your nonprofit, and the possible resources available to support your efforts. You have to create a 5 year budget. It sounds hard but not really. You are starting a business and if you want your business to survive you have to think about today and tomorrow, and who and what it will really take to keep the doors of your business open for 5 years.
Why a Board of Directors?
Nonprofits are not privately owned. While it may be your personal mission, your ideas have to be shared by others and those individuals have to help you manage your nonprofit. Hence the creation of a Board of Directors and odd number of multi-talented individuals who create a group that will help you push the nonprofit forward. The Board has to share your mission and your passion and bring the skills that enhance your ability to move your vision and your mission forward.
Let’s assume you have all the above in place. So, let’s get to the steps needed to get your doors open as a nonprofit and the cost.
· Decide the state you will operate your nonprofit from and pick a name – Fill out a name search form http://www.sos.ca.gov/business/corp/pdf/naavreservform.pdf , State of California cost $10
· Once the name is secured, prepare your Articles of Incorporation, http://www.sos.ca.gov/business/corp/pdf/amendments/corp-restnp.pdf , State of California cost $30 (additional $15 for special handling) and $8 per certified copy
· Obtain your Tax ID#, EIN # - Fill out the form, http://www.irs-ein-pplication.com/california.html , State of California cost, it’s free -- Knowing your Board members, more specifically the Board Officers is essential for the completion of this document; Secretary, Treasurer and President)
· Prepare your Bylaws (the rules that govern the operation of your nonprofit) – no forms, but attached is a sample found , http://www.insightcced.org/uploads/publications/legal/Ch5_%20CA%20model%20nonmembership%20bylaws%202006.pdf , created in 2008 by Insight Center for Community of Economic Development – “for Non Membership Nonprofits”
· Complete the IRS nonprofit form (form number 1023) for a 501c3 tax exempt corporation, nonprofit, http://www.irs.gov/pub/irs-pdf/f1023.pdf , IRS cost $400 (if gross receipts as shown in the budget are less than < $10,000 over 4 Years) or $850 (if gross receipts as shown in the budget are greater than > $10,000 over 4 Years) – NOTE: New IRS Cyber and implemented space fees to be announced
· Complete the State nonprofit form (form 3500 for California) for a tax exempt corporation, nonprofit, http://www.ftb.ca.gov/forms/misc/3500bk.pdf , State of California cost $25