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How to Start a Nonprofit Organization

How to Start a Nonprofit Organization

If you're passionate about a social cause and want to start a business to support it, a nonprofit might be the right entrepreneurial path for you.

In the world of entrepreneurship, there are generally two types of businesses one can start: a sales-driven for-profit company whose proceeds benefit the business owners, or a nonprofit company whose proceeds benefit a greater social mission. If you're passionate about a certain cause and want to start a business to support it, a nonprofit organization may be the right path for you.

There are plenty of benefits to running a nonprofit business. Besides making a meaningful difference in your community, you can receive public and private donations to fund your efforts and be tax-exempt if you file for 501(c)(3) status with the IRS. But incorporating a nonprofit isn't quite the same as launching a for-profit startup, and like any business, it will present some challenges along the way.

[Why Nonprofits Are Viewed Differently Than For-Profits]

Turn your idea into a vision

As with all startups, the first thing you need for a successful nonprofit business is a great idea. Once you have that idea in place, you need to figure out how to make it a reality.

When you're starting a nonprofit, you have to move from an idea and a mission to a vision.

In startup planning, a vision statement is often used to outline a company's long-term future goals, while a business plan describes how the company is going to achieve them. You'll need both in order to get your nonprofit started.

Build a great board

Your board is going to be your team of go-to people for all fundraising, support and outreach efforts for your nonprofit organization. Many nonprofits start off with an incorporator board of the founder's family and friends. As your organization gets off the ground, you may want to turn to some professional contacts who understand entrepreneurship and running a business to serve on your board.

Be prepared to show results

One of the most consistent issues facing a nonprofit is resources. In a for-profit business, investors will give money because they expect a return. Securing funds for a nonprofit is a little bit trickier, but "selling" it the same way as a for-profit can be helpful.

"When you're looking for supporters and major donors, the approach should be similar to investing in a for-profit business.

Don't give up when it gets tough

Nonprofits face just as many, if not more, challenges than for-profit businesses, and it's important to not get discouraged if things are taking longer than expected, or if you don't receive the overwhelming support you had hoped for.

Criticism will come, but do not let anyone's thoughts or impatience in getting off the ground stop you, especially your own. People of excellence rise to the top and are drawn to great causes, so keep casting your vision and trust that the people will come.

For more information on starting a nonprofit organization, visit

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