Starting a non-profit is thrilling, because it means that you have the opportunity to help people and make a change in the world. But, unfortunately, many aren’t aware of what goes into starting a non-profit besides the charitable acts themselves.
These are five vital things you should know before going into this line of work!
What Is Your Mission?
What’s the main goal of your non-profit? Are you passionate about rescuing stray animals off the street and getting them fixed and rehomed? Is your goal to ensure that students have better access to art and creativity while they’re learning?
Take the time to develop a clear goal for your non-profit and a simple mission statement that explains what you want to accomplish and why. This is vital to ensuring that you’re funded.
How Much Will It Cost To Run?
What does your company need to thrive? This could mean the cost of renting a building, or the fees associated with whatever type of work you do, or maybe even the overhead of products you create for charitable work.
Think about what your company needs to do to do the work it does, and then how much that will cost you. Although it would be nice if everything were free, there wouldn’t be any need for non-profits at that point.
How Will You Fund This Nonprofit?
You must think about this early on. Although you can set up a great grants management system to ensure that your finances are handled, you still need to figure out where they’re coming from.
Most non-profits are supported by sponsorships, grants, individual giving, fee-for-service, events, and more options. This is awesome because there are tons of ways for your non-profit to make enough money to support itself, but you should be aware of how much work it can take to make money from many of these. It’s a good idea to have multiple revenue streams to carry your company.
Is It A Non-profit or Not-For-Profit?
Although these two business models sound similar, they are actually very different. A non-profit works for charitable purposes and does this work for the good of other people. This can be anything from a company that creates and donates technology to underprivileged students to large companies like the Red Cross.
A not-for-profit is a small group that’s usually formed through some common interest. These are often known as ‘recreational organizations’ that don’t operate with the main goal of earning revenue. Consider which model fits your company better before you advertise yours as a non-profit.
What Tax Cuts and Liabilities Will You Face?
A non-profit comes with a lot of red tape when it comes to taxes and vital paperwork. However, these liabilities are high-risk if you don’t follow them closely; if you run your business correctly as a non-profit, you shouldn’t be at risk of this.
Instead, get to know what local and national laws you’ll need to follow to maintain this status. Being a non-profit is an awesome way to give back to your community. Please pay attention to what you’re doing, and do it well.