501 c 3 Nonprofit Startups

It is complicated, much more so than most people realize, and much more difficult than even a few years ago due to an increase in the IRS regulations around obtaining the tax exemption, yet it is one of my favorite tasks as a consultant, helping someone committed to a mission getting incorporated, grounded, and working.

This free online nonprofit management resource is terrific and this article from Nonprofit About.com is an excellent look at starting up.

An excerpt, with a bunch of links at the jump.

“Starting a nonprofit is complex, with many missteps possible at any point. Going from nothing to a sustainable and financially healthy nonprofit is not for the timid. Avoiding these common nonprofit startup mistakes will get you off to a great beginning.

“From a review of the literature already available on this topic and by posting the question on various social networks such as LinkedIn, Facebook, and Quora, I found that these mistakes were the most likely to plague nonprofit startups:

“Lack of a business plan is one of the most prevalent mistakes that startup nonprofits make. In their enthusiasm to do good, many founders of nonprofits forget that a nonprofit is a type of business. Businesses have business plans in hand before launching. A business plan encompasses an evaluation of the competitive environment, sources of funding, potential products or services to be offered and to whom, and a needs assessment.

“Lack of Financial Savvy

“Close behind lack of planning is unrealistic expectations about funding for a startup nonprofit. Many founders do not anticipate what it will cost to start their nonprofit, much less have any idea of where to get the funds. Any nonprofit startup needs a funding plan, must decide if services provided will be available for a fee or be free, and should institute a good financial records system. A nonprofit that has weak funding at the beginning is unlikely to be able to sustain itself long enough to get a vigorous fundraising program going.”