Monday, June 11, 2012

What Does it Take a Start a New Nonprofit?

I have had four conversations in the past three weeks with people who are in the process of starting or considering starting a new 501c3 nonprofit organization in Minnesota. I have found the MN Council of Nonprofits website to provide some of the best resources to aid people in this process - plus a great folder of materials my predecessor left me!

Before even getting to the paperwork, forming of a board, and fundraising here are some things to consider if you have an idea.

1) Determine if the nonprofit is needed. Are there other organizations in the community and/or the region who already provide the services you are considering and could you work together?
2) If there are no services like what you propose in your area would there be a fiscal agent who could accept funds on your behalf?
3) What is the purpose of your organization? How will you carry out the mission?
4) Are there others who share your passion and are willing to serve on an initial board of directors?

Starting a nonprofit takes a lot of thought, work, time, buy-in from others and money. Make sure you’ve done your homework and identified that this new organization is going to fill a need in your community and that others share your vision and passion.

If you decide to go ahead you need to know that nonprofit organizations are regulated by 3 primary offices that have filing requirements: (Following information comes from the MN Council of Nonprofits)

The Internal Revenue Service
The MN Secretary of State
The Minnesota Attorney General’s Office, Charities Division

Here are 6 steps that need to be fulfilled as you form your new nonprofit. I would recommend hiring an attorney to help you through the process!

Here are the steps:

1. Decide on a name and then check for availability of the proposed name through the MN Secretary of State’s Office
2. Write and File Articles of Incorporation
3. Write By-Laws
4. Obtain tax exempt status from the IRS
5. Once the Federal tax exempt status is received there are a number of items to do (check the website for more information).
6. Other considerations
A. Recruiting Board Members
B. Board Meetings
C. Fundraising Plan
D. Accounting System
E. Staffing
F. Community Awareness
G. Evaluation
H. Insurance and Legal needs

Another resource you will want to check out are MN Statutes regarding nonprofits. It is referred to as Chapter 317 A (I call it the Handbook for Nonprofits).

Here is a sampling…..317A.201 The Board of Directors. The first line says “the business and affairs of a corporation must be managed by or under the direction of a board of directors”. So you can see, this is a requirement. In another section is says that “a board of directors must consist of 3 or more individuals, with the number specified in or fixed in accordance with the articles or bylaws”.

So, if you have a passion, a plan, the motivation and desire to start a nonprofit, think about how you can bring others with you…and begin the journey to making the lives of others and the communities you live in even better!

Holly Witt, NRS Alexandria Charter

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