How to Start a Nonprofit Organization with No Money
Nonprofit organizations have come to be known as entities that pursue worthy causes beneficial to members of society.
As the name suggests, the configuration is such that it isn’t established with the purpose of profit making. Instead, it is meant to meet certain needs.
As you read on, we will show you how to start a nonprofit organization with no money.
Is it Possible to Start a Nonprofit without Money?
This is the question that is likely to come to mind after reading the topic. In providing an answer to the question, it is possible to do so. However, starting a nonprofit without money can be challenging. It requires having to innovate ways to raise required funding for its smooth operation. This is a difficult but rewarding process that can be achieved.
There are standard requirements for starting a nonprofit organization. This applies to every situation (whether you have the resources or not). These requirements include your by-laws, the 503 (c) 3 status, your goals and objectives, articles of incorporation, and a mission statement. Let’s briefly consider each separately;
- Non-Profit Organization By-Laws
You need to have a by-law in place for your non-profit organization to enhance its smooth operation. By-laws are legal documents that also double as a framework that guides the actions of the organization. By-laws are a pre-condition to being incorporated by states. Hence, this is one of the requirements that need to be in place in order to realize your objective.
Incorporation confers several benefits to your nonprofit organization. However you can still operate a nonprofit without incorporation. This is mostly for small scale nonprofits and restricts your options significantly.
- The 503 (C) 3 Status
This status is one of the 29 types of nonprofit organizations that are shielded or exempted from some form of federal and state income taxes. While operating a nonprofit without your own money, you also need to protect the business, hence the need to apply for the 503 (c) 3 status.
- Goals and Objectives
The goals and objectives of a nonprofit go hand in hand and meant to carry out a review of your by-laws. It clarifies the goals of your nonprofit as well as sets restrictions or prohibitions on certain affiliations or activities. By setting a definite path to follow, you are able to demonstrate the capacity to tackle the issue(s) you seek to provide solutions to. This enables you attract funding.
- Articles of Incorporation
This aspect of your standard requirements is called by several names. Some of these include charter document, or articles of organization among others. Each state provides a filing format you are expected to follow. Articles of incorporation form the body of laws for your nonprofit organization. The “statement of purpose” section of your articles of incorporation enables you to obtain the US federal government’s tax-exempt status.
- Mission Statement
In a bid to start a nonprofit organization with no money, you should understand that this part of your benchmark requirements is high valuable. Mission statements clarify your purpose and direction, create a decision making template, creates a drive in your workforce as well as sends the right message about your organization.
Do Non Profits Avoid Profit Making Ventures?
More often than not, it is assumed that non profits are not interested in profit generation. This isn’t true. Although they exist for the sole aim of giving value to their target audience, they also create profit making ventures. This enhances their revenue generation capacity which helps them achieve their mission objectives. However the extent of such revenue generating activities is restricted.
Starting a Nonprofit Organization Checklist
In order to attract startup funding for your nonprofit organization, you need to have a business plan in place. Your business plan is not only beneficial to raising required funding but also acts as a blueprint. This is one of the first steps to take in order to attract funding. Only a detailed and well written plan is good enough. Hence the process shouldn’t be rushed at all.
- Difference between the Concept of Income and Seed Money
In operating a nonprofit, the concepts of income and seed money need to be clearly defined. Nonprofit organizations have several income generating streams. Some of these are through grants, donations as well as revenues from several other activities such as ticket sales, fundraisers, exhibitions and more. Seed money for nonprofits on the other hands can be obtained from supporting foundations (preferably local), organizations with vested interests in your activities as well as family and acquaintances.
- Building a Team of Supporters
One of the ways to enhance your chances of success with your nonprofit idea even in the absence of money is by building a team of dedicated supporters. This requires that you are able to convince them of your passion and capacity to undertake your specific goal. Trust needs to be built during this process as such a team will increase the likelihood of success.
- Network with Other Nonprofit Organizations
This is a recipe for success which you can pattern your operations after. Whatever you seek to achieve with your nonprofit, there are tons of other nonprofit organizations doing something similar. Finding one will not be difficult as a Google search will bring out several results. By interacting with them on possible ways to attract funding for your project, you will find helpful and practical ideas you can implement.
If you have read to this point, knowing how to start a nonprofit organization for youth with no money shouldn’t be a big deal. In providing you with practical steps to achieve your target, we have also discussed some standard requirements that must be in place. With these information, you should be able to navigate through the entire process of starting one.