11/14/2016 Is Starting a Nonprofit Right for You? Objectives Objectives Objectives Objectives Learning Learning Learning Learning • Understand what a Nonprofit Organization is and the Objectives Objectives Objectives Objectives steps to establishing 501(c) status • What to before filing for 501(c) status—Developing the plan • Mission-Vision-Values • Alternatives to starting a nonprofit 1
11/14/2016 WHAT IS A NONPROFIT ORGANIZATION? According to the IRS: • Is organized and operated exclusively for one or more charitable purposes. • No part of the earnings will be of benefit to private shareholders or individuals. Not organized for the benefit of private interests. • Will not attempt to influence legislation or participate in a political campaign as a substantial part of its activities. DEVELOPING A PLAN • Mission Mission Mission Mission- - - -Vision Vision Vision Vision- - - -Values Values Values Values • Environmental Environmental Environmental Environmental/ / / / Field Scan Field Scan Field Scan Field Scan • Your Team Your Team Your Team Your Team • The Need The Need The Need The Need • Program and Services Program and Services Program and Services Program and Services • Finances Finances Finances Finances • Marketing/Outreach Marketing/Outreach Marketing/Outreach Marketing/Outreach 2
11/14/2016 MISSION MISSION MISSION MISSION- - -VISION - VISION VISION- VISION - - -VALUES VALUES VALUES VALUES Vision Vision: The way your organization sees Vision Vision Mission Statement Mission Statement Mission Statement Mission Statement: The mission statement Values: Values are beliefs which your Values Values Values communicates the nonprofit's purpose, what organization's members hold in common the world after you accomplish your groups it serves, and how it plans to do so. and endeavor to put into practice. The mission—where you are headed and values guide your organization's members in For a new nonprofit, developing the mission what it will look like when you arrive. statement is a critical first step in defining performing their work. Specifically, you Long-term, desired change. should ask, "What are the basic beliefs that what the organization plans to do and what (http://www.entrepreneur.com) makes it different from other organizations we share as an organization?“ in the same field. (www.grantspace.org) (www.idealist.org) THE PLAN: Environmental Scan • Who else is doing this work? Who else is doing this work? Who else is doing this work? Who else is doing this work? • Is there a successful business model out Is there a successful business model out Is there a successful business model out Is there a successful business model out there? there? there? there? • Are we innovative or duplicative? Are we innovative or duplicative? Are we innovative or duplicative? Are we innovative or duplicative? 3
11/14/2016 THE PLAN: Your Team How much staff? How much salary? Who is your Board? THE PLAN: The Need • What is the NEED in your community that you plan to fill? • Who is your target audience? • What is the connection to your audience and need? 4
11/14/2016 THE NEED: Programs and Services • HOW will you address this need? • What are the GOALS & OBJECTIVES tied to these activities? • What makes your approach unique? • How will you measure success? THE NEED: Finances & Fundraising • What is the proposed budget? • What are the financial procedures and infrastructure? • Where do you plan to get the majority of your funding? 5
11/14/2016 U.S. Giving -Domestic • Total U.S. giving in 2014=$358.38 billion – An increase of 7.1% over the previous year • 72% of that giving was done by individuals – An increase of 5.7% over the previous year • 15% was made by foundations – An increase of 8.2% over the previous year • The remainder was giving through bequest (8%) and corporations (5%) 6
11/14/2016 THE PLAN: Marketing & Outreach • How will you reach your community/constituents? • How will you keep your community informed? STEPS TO GETTING YOUR 501(C)3 STATUS 1. 1. Establish a Board of Directors 1. 1. Establish a Board of Directors Establish a Board of Directors Establish a Board of Directors 2. 2. 2. 2. Develop Bylaws and Board Policies Develop Bylaws and Board Policies Develop Bylaws and Board Policies Develop Bylaws and Board Policies 3. 3. 3. 3. File articles of Incorporation w/Secretary of File articles of Incorporation w/Secretary of File articles of Incorporation w/Secretary of File articles of Incorporation w/Secretary of State’s Office: www.sos.state.oh.us State’s Office: State’s Office: State’s Office: www.sos.state.oh.us www.sos.state.oh.us www.sos.state.oh.us 4. Obtain an Employer Identification Number 4. Obtain an Employer Identification Number 4. 4. Obtain an Employer Identification Number Obtain an Employer Identification Number (EIN): www.irs.gov (EIN): (EIN): (EIN): www.irs.gov www.irs.gov www.irs.gov /Form SS /Form SS- /Form SS /Form SS -4 - - 4 4 4 5. 5. 5. 5. File for federal tax exemption File for federal tax exemption File for federal tax exemption File for federal tax exemption— — —501(c)3 status — 501(c)3 status 501(c)3 status 501(c)3 status Form 1023 (~$400 Form 1023 (~$400- Form 1023 (~$400 Form 1023 (~$400 - -$850) - $850) $850) $850) **This is where you get tax **This is where you get tax **This is where you get tax **This is where you get tax- - - -exempt status exempt status exempt status exempt status 7
11/14/2016 CONSIDERATIONS • Existing partnerships? • Who is in your network? • Do you have space/equipment? • Is there infrastructure in place? – Financial Controls – Insurance – Human Resources – Annual Reporting, 990s, etc. ALTERNATIVES • Volunteer • Find employment with a like organization • Serve on a Board • Fiscal Sponsorship 8
11/14/2016 ADVANTAGES? • Tax Exemption/Deduction • Eligibility for public/private grants • Formal Structure • Limited Liability DIS-ADVANTAGES? • Cost • Paperwork/Administration • Shared Control • Scrutiny by the Public 9
11/14/2016 FISCAL SPONSORSHIP A legal arrangement between a 501(c)3 and an individual group—giving the non- exempt group access to the benefits of a 501(c)3 without dealing with the administration side of operating. The Nonprofit Startup Assessment 10
11/14/2016 Which should you do…? 11
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