How to Start a Nonprofit

How to Start a Nonprofit: Hard, Rewarding Work

By Ericka Foster with reporting by Maggie Allen

It’s not unusual for those who have turned their lives around to want to help others. For some, part of the recovery process is to pay it forward. One way to pay it forward is to start a nonprofit. A nonprofit is sometimes referred to as a 501(c)(3) most non - profits fall into that tax - exempt category. Visit the IRS web page and consult with a tax professional on the ins and outs of the non - profit tax status.

As with ANY self- employment endeavor, start by being passionate about the idea . Passion is required because it is hard work to create a successful non - profit. “ I would caution everyone that it’s not going to be easy. It’s not, but the payoff is so big if you remain resilient,” explained Tia Ryans (pictured left) in a previous interview. Tia created F.O.R.T.E. House , a transitional housing non -profit.

“I wish someone would have told me about how unbalanced my life would become and then give me some helpful tips on how to bring back that balance. You don't realize how much time is spent on different activities, and how many hats you actually have to wear,” explains Porche Proffit, the co- founder of our organization, Positive Transitioning. “It's a really interesting learning process since you are wearing so many at times completely differen t hats. That's what makes focusing on your time distribution so important, making sure that you are spending time on responsibilities that are more challenging, and not spending all your time on the responsibilities and tasks that are enjoyable.”

Once you have found your passion, you need to create a plan – a business plan. Huh? But it’s a nonprofit. The best nonprofits run like businesses. Furthermore, answering the questions that are required to complete a business plan are the same questions that you should be answering to make a nonprofit successful. Your business plan will help you figure out what makes you stand out from other nonprofits, how you will finance your nonprofit, and how you expect your nonprofit to grow. Having a direction for your organization will help you predict the time and effort required to get your nonprofit off the ground. You can find a business plan template online.

You do not have to create your business plan alone. SCORE is one of the most respected nonprofits that provides fre e assistance to people needing business help. You can find someone who can help you hash out the details of your business plan. The Small Business Association as well as the National Association of Nonprofits can also help you find resources that will help you build a solid business plan.

Non- profits such as Defy Ventures, The Last Mile , Mercy Corps Northwest , Resilience Education , LEAP, and Project ReMADE work specifically with the formerly incarcerated to create businesses.

Once you have your passion and a plan, you’ll need to complete the paperwork to become tax - exempt with the IRS, and with your state. You may also be advised to be tax - exempt in a city or county as well. Becoming incorporated is very similar to a incorporating a business – you’ll need to choose a business name, appoint a board of directors, decide on a legal structure, then incorporate and apply for tax exempt status. Then be sure to obtain the licenses required to run your business.

Running a nonprofit can be an incredibly rewarding experience, and should be a real consideration for someone who wants to have a fulfilling career while making a new life for themselves, with the understanding that it is still building a business. “ I have learned so much and have taken myself outside of my comfort zone a great deal. So it is definitely helping me to be a better person,” explains Porsch e.

Final Thoughts…

As the news of George Floyd broke, I was like, “shiiiiit, I’ve been here before. I’ll wait to see if anything actually changes before I decide to participate.” But then, my mentee wanted to have an honest, open conversation about racism. I’d be doing her a disservice if I shut down during what could be an important conversation in her 20 years. So, as we talked, I posed a question to her that I realized I needed to ask myself: How am I going to use my talents and opportunities to affect change in the world? Change doesn’t take place if we sit on the sidelines and wait for someone else to do it.

If we work collectively, no one has to be Martin Luther King. We can be person who waits for a neighbor to walk home together during the bus boycott. That’s easy enough right?

So I pose the question to you: How will you use your talents and opportunities to make a change?