How to Start a Nonprofit Business

Starting a nonprofit is rewarding and requires planning and dedication. In this guide, we’ll outline the steps to get you up and running. Check out our startup hub for more guidance on starting a business.

1. Conduct a needs analysis

First, verify that another organization isn’t already serving your identified needs. Answer questions like: Is any other nonprofit organization serving your target audience? How many people need your service? Who is your target demographic? Is a 501(c)3 the best way to meet the need?

For market research, identify your target population and potential donors. Speak with or survey those audiences to validate the need for your offering.

Lastly, review the IRS nonprofit compliance guide.

2. Decide on a name

Choose a name that no other organizations are using. Ensure it’s unique to avoid confusion.

3. Write your mission statement

Create a concise mission statement that articulates your organization’s core reason for existence. Involve diverse stakeholders in the development process and seek feedback to ensure it resonates.

4. Build your board of trustees

Form a board of directors that works well together but brings different perspectives. Consider creating an orientation for new board members.

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5. Write your nonprofit business plan

Create a business plan that outlines every aspect of your organization. Include three-year plans for both program and administrative sides, with measurable outcomes.

Nonprofit business plan outline

Focus on sections such as the executive summary, products and services, market analysis, management team, and financial plan.

6. Register for 501(c)(3) status and file articles of incorporation

Meet state and federal regulations by registering for tax exemption and filing articles of incorporation as a nonprofit. Seek legal advice for guidance.

7. Create a fundraising plan and get to know your donor base

Set up funds for regular operations and special projects. Monitor your finances using accounting solutions like QuickBooks or Xero. Connect with donors based on their interests and consider exploring grants.

8. Hire staff or find volunteers

Identify skill gaps and find volunteers or consider hiring paid staff when your finances allow. Review your financial plan to determine when to hire.

Keep your eyes on your mission

Review your mission statement and business plan regularly. Keep your mission at the forefront of conversations and use your business plan to set milestones and ensure sustainability.

Nonprofit tools and resources

8 Steps to Start a Nonprofit Business

Make writing a business plan easy and increase your chances of success with this fill-in-the-blank template.

8 Steps to Start a Nonprofit Business

Build a roadmap for success with LivePlan. Quickly consider every aspect of your business, build your business plan, and create accurate financial reports to help you start and grow.

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