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Tips on Starting a Nonprofit Organization

Tips on Starting a Nonprofit Organization

Posted on June 4, 2019
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“At the most fundamental level, it is an honor to serve at whatever type and size of organization you are privileged to lead, whether it is for-profit or nonprofit. It is an honor to serve! Starting from that it is important to have a compelling vision and a comprehensive plan.”- Alan Mulally

Donations and philanthropic trends are on the rise globally. This is indicated by the fact that overall giving has grown by 4.1% last year recording growth for the sixth consecutive year! (Source: Nonprofit fundraising statistics). The reason for this could be attributed to the growing awareness among people for the various environmental and social factors and an urge to do their part.

Starting a nonprofit organization under such a scenario definitely seems to be a great option for entrepreneurs who are inclined towards social causes.

What exactly is a nonprofit organization?

A nonprofit organization is one that is formed for the purpose of serving the public or for mutual benefit instead of generating revenue for the investor.

When we think of a nonprofit, the first thought that crosses our mind is an organization like Make-a-Wish or Big Brothers and Big Sisters, etc. that are serving the community. These charities are well-known because they are public charities. Public charities are tax-exempt under Internal Revenue Code Section 501c3 as they are for public benefit. Besides these, there are private foundations under 501c3 such as family foundations, private operating foundations, and corporate foundations.

In fact, the IRS has 1.4 million nonprofits registered with it. And, these nonprofits contribute $887.3 Billion to the US economy!

How to start a nonprofit organization?

1. Prepare a Strategy

The current charitable trends have given rise to numerous nonprofits. Hence, if you need to start your nonprofit, you will need to strategize and have proper planning in place so that your nonprofit gets the attention of the public eye.

2. Documentation

  • You will need to register your nonprofit with the state.
  • You will need to apply to IRS for nonprofit status. If the IRS offers your nonprofit 501c3 status, it will be easier for you to get donations as donors will get tax exemptions.
  • In order to solicit donations from the public, you will need to register your nonprofit as a charitable solicitor.
  • You will need to set up a board of community stakeholders who are not friends and relatives of the owner of the nonprofit.
  • You will need to establish a set of operating procedures for your nonprofit.

3. Sourcing Funds

Just like any enterprise, a nonprofit also needs funds to operate. Sourcing funds for a new nonprofit is an uphill task. Not many donors are keen to donate to a new nonprofit organization. If your nonprofit has been given a 501c3 status by IRS, then it becomes easier to attract donors.

How to start a nonprofit with no money?

1. Corporate Sponsorship

In recent years, corporations are showing a growing interest in philanthropy. Between 2013 and 2017, giving increased by over 15% for 6 out of 10 companies. (Source: Nonprofit fundraising statistics). Corporations have contributed to nonprofits in different ways. 65% of companies provide their employees with paid release time for volunteer programs and many other ways. Corporations are a good resource that can be tapped for investing in your nonprofit. You can look for organizations which have goals aligned to the goals of your nonprofit and approach them for investment.

2. Approach Individual Philanthropists

You can decide on a goal to address the issues affecting your district. And, approach individual philanthropists who are concerned about those issues. Convince them with your plan and seek donations from them.

3. Social Media

Why technology such as social media is must for nonprofits. One of the most effective ways of reaching out to a large number of people is through social media. Data reveals that 39% of the millennial donors and 33% of GenX donors globally are inspired by social media. Social media channels create awareness about the nonprofit. There can be pay options on the social media pages.

4. Social Entrepreneurship

Social entrepreneurship has been around since the last decade. It entails creating a nonprofit business that generates the required revenue. Social entrepreneurship could be businesses working towards solving a social issue using government money or grants. Social entrepreneurship is also when a business focuses on solving a problem by selling something to consumers thereby earning revenue for the nonprofit. One example of social entrepreneurship is TOMS which has a one for one approach. Initially, it started with shoes where the company donated a pair of shoes to a needy child every time a pair was bought. Now the concept has extended to other products such as eyewear, coffee, and tote bags.

5. Fundraising Events

Organizing fundraising events help generate funds for the nonprofit. However, a fundraising event has its own set of expenses to be managed. Therefore, the nonprofit can organize an event within a budget so as to generate revenues to cover for the expenses and make an earning.

6. iConnectX

A nonprofit can register with iConnectX. This social media platform provides a community to help generate awareness about the nonprofit’s cause, tools to help the nonprofit with events tickets, auctions, volunteering and program support. It also uses the power of networking to help support these nonprofits through the donation, buying and sharing of time.

If a nonprofit is registered with iConnectX, its chances of getting donations improve because of the networking model offered by iConnectX.


“Philanthropy is often seen as society’s risk capital. That means the onus is on philanthropists, nonprofit leaders, and social entrepreneurs to innovate. But philanthropic innovation is not about creating something new. It also means applying new thinking to old problems, processes, and systems.”-Laura Arrillaga Andressen