Starting a Nonprofit Quickly

The title of this article may seem to those that are knowledgeable on what it takes to start a 501(c)(3) nonprofit to be a complete contradiction. After all, it usually takes close to a year to become recognized by the IRS as a tax-exempt organization once you've filed your paperwork. Not to mention, the work that must be done before the paperwork is submitted. However, it is possible to get a non-profit organization started quickly.

Now, there is no reason to rush into starting a 501(c)(3), but from personal experience I have found that there are circumstances in which you must get your non-profit established for a viable reason. For instance, if you are already receiving donations and need an EIN in order to open a bank account. This is the time when it is valuable to call in favors if you have any friends that practice law or accounting. Fees required to start a non-profit can exceed $3,500.00, this is a hefty price tag, but there are many lawyers and accountants willing to offer services for free or discounted prices for non-profit foundations.

You should meet with a lawyer or speak with a lawyer for assistance, then contact an accountant. What you need to apply for immediately is a temporary EIN, that's all you will need to open a bank account and accept donations. Do not be tempted to procrastinate on filling out your paperwork because you have a temporary EIN, if you are not serious, people will take notice and the IRS does turn down requests for non-profit status.

When applying for tax-exempt status and filing your articles of incorporation with the lawyer you should have helping you at this point, two of the most important pieces of information you will be asked for are your mission statement and board of directors. Your mission statement should be a short declaration of what your non-profit organization does, your mission statement may change as your foundation grows and your goals become more defined. Your board of directors should be knowledgeable in whatever your non-profit focuses on and should be chosen carefully. There is a minimum number of people you need on your board, usually it is 3.

Once you've filed all of your paperwork and you're waiting to receive a response from the IRS, begin making your budget based on the projected amount of money you plan to raise within the following year or group of years. It is best to have a 1-year and 5 year plan so you are aware of both your temporary and long-term goals. If you are the director of the 501(c)(3), it's your job to develop a system of accounting and record keeping, you will be thankful you did this at the end of the year when you are required to report your progress.

Start planning fundraisers and create a website for your non-profit, although your plans change and better ideas come along, it's never too early to start growing your non-profit. Once you receive your final approval letter for tax-exempt status, all you'll have to do is make some phone calls to provide your new, permanent EIN, but it won't change what you've already got started.