This is the third part in a five-part series on how to start a nonprofit organization. Keep in mind that the sequence in which you complete these tasks may vary, but each is important. This post will explore the steps involved in Formation and Organizational Process.
1. Identify legal, accounting, and insurance advisers experienced in nonprofit matters: Starting a nonprofit is different than starting a business. Different rules, different roles, and different reasons. Make certain your professional help knows the difference!
2. Build an initial board of directors with strong commitment and willingness to assume fiduciary responsibilities: Your organization’s board of directors has complete authority to govern and make policies. Choose wisely.
3. Designate officers of the board: Your president and secretary must be two different people, but other officer positions may be shared by the same person.
4. Research and reserve name with Secretary of State and domain name service: Before you get too excited about your name, check with a domain registry and your Secretary of State to make sure it’s available.
5. Establish a business mailing address and other pertinent contact information: Decide early on who will serve as your organization’s registered agent – your contact person with the State and IRS.
6. Prepare Articles of Incorporation and file with Secretary of State: Don’t forget your Purpose and Disolution clauses! This very specific language is critical when applying to the IRS for 501c3 tax exemption.
7. File for a Federal ID Number: Also called your EIN (Employee Identification Number), you can accomplish this online in about 5 minutes from the IRS website.
8. Draft organization’s bylaws: Your governing document should be created with thoughtful input from an experienced nonprofit advisor.
9. Open bank account and establish check writing procedures: Your local bank will help you set up an account to fit your specific needs.
10. Hold initial board meeting: Elect officers, approve and sign formation documents, and begin making policies that will shape the future of your organization.