Starting a Nonprofit Should I? Could I?

Why Should I Listen to Her? This presentation is a mix of experience, facts, research, and a little opinion, so feel free to take this with a grain of salt. However, this is localized opinion from someone who is drenched in local nonprofits on a daily basis.

The Objectives Develop an understanding of basic nonprofit theory. Learn how to identify community needs and assess whether a nonprofit or other group should form to meet those needs. Develop an understanding of the growing competition in the nonprofit sector, professionalization of nonprofits, and the growing expectation of nonprofit leaders. Review the legal landscape of nonprofits in TN. Understand the basics of starting a nonprofit.

Some needs are not met by any of these entities. The Theory Part... We have the government, for-profit business, and churches. Why do we still need a nonprofit sector? Some needs are not met by any of these entities. As for-profits structure to give back to the community and nonprofits become more professionalized, the line is blurring. Government has boundaries. It is designed to serve at the macro-level. For-profits choose how to use revenue. Churches are completely unregulated. Needs not met: mental illness, aids When needs weren’t met, folks volunteered, worked together, and met those needs. (Mental illness). Over the years, this process has become professionalized. Then they might advocate for their service in other arenas and the government, businesses, and churches might support their efforts as well. This is why many nonprofits have an advocacy role.

What is a Non-Profit? IRS Definition: To be tax-exempt under section 501(c)3 of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)3, and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates. Exempt Purposes: Charitable Religious Educational Scientific Literary Testing for public safety Fostering national or international amateur sports competitions Preventing cruelty to children or animals Note: Don’t say not for profit. Not only does it outdate you, it isn’t exactly correct. We want a positive revenue stream, we are technically all for making a profit, we just use our profits differently.

What is Out There? 1.5 million More than 1.5 Million nonprofits are registered in the U.S. Tis includes charities, foundations, and other nonprofits like chambers, fraternal organizations, and civic leagues. Over 18 million businesses

Before You Start a Nonprofit... - Know yourself first. Are you a passionate person? If so, this is good! But, you need to know what passionate people can do. - It’s not just about your passion. What does this community need? Again...what does this community need?

Find the Need What is the core issue? Let’s say you identify an issue – Our kids aren’t doing well in school. You go and build a tutoring program to help them do better. However, grades aren’t improving--- YOU MISDIAGNOSED THAT ISSUE. Let’s say you go further – You find out attendance is low and that is affecting performance. So, you run a “be cool go to school campaign” to help change their attitudes....not effective. Now you are frustrated, so you go into their neighborhoods and start asking...you realize a big reason they don’t go to school, they don’t have clean clothes.... Washing machines. (school in St. Louis – 90% attendance increase). What is the core issue?

Define Need # = $ = Impact Our children need us! X of children live below the poverty line. $X could pay for one child to go through a summer education program that will increase their reading scores, and therefore increase their chance of graduating high school by X%. Let’s say you identify an issue – a lot of our people don’t have jobs. We need more jobs. You build a program to bring more jobs to our area. It’s great! More jobs are here. However, there are still a lot of people without jobs. --- YOU MISDIAGNOSED THAT ISSUE. Your donations have paid for # of children to attend our 6 week summer education program. Their reading scores increased by an average X%, and are now testing in a range that predicts high school success.

Before You Start a Nonprofit... Yes, I identified a need. What is already happening in this field? - It’s not just about your passion.

Kumbaya Who is already doing this? Who is involved in this field and could expand? It’s not just about your passion. Go talk to the front lines, or as close as you can get.

Nonprofits are Thirsty for.. Committed Board Members Volunteers Donors Employees Unifiers

First Steps Think Capacity Define Your Vision Build your Board Get Legal IF you have identified an unmet need, with NO one workingin this area...

Think Capacity “Alone we can do so little. Together we can do so much.” Helen Keller People don’t like to donate to overhead costs. Start-up capacity needs are BIG. You need foundational work (office, book keeping, finances) You need PR (events, social media, new/radio) You need programming planners (time to do what you actually want to do)

Define Your Vision (and a little bit how you plan to get there) What number are you trying to change any by how much? Why? What tools does your service population need in order to make that change? How can you build access to these tools? What do you need to build access? Write all out. Write on one-sheet. Write an elevator speech. - How can you build access – look how others are doing it.

Build That Board! Diverse Abilities Personalities Commitment Support - You need to understand when you start a nonprofit, if you want to be the director, the program manager, or an employee of the nonprofit, you are not the ultimate decision maker. The board it. They hire and fire.

Get $$$

Get Legal Make founding documents Get EIN: Form SS-4 Bylaws ... take your time! Financial policies Get EIN: Form SS-4 Finances: new? Financial statements of current year and proposed budget for next two years including detailed breakdown of revenue and expenses

Get Legal Register with IRS: Form 1023 Step-by-Step You’ll need organizing documents, EIN, your finances in order, and a user fee ($400) Finances: new? Financial statements of current year and proposed budget for next two years including detailed breakdown of revenue and expenses

Get Legal Get Tax Exemption Sales and Use Tax Certificate of Exemption from Department of Revenue General Rules Form Finances: new? Financial statements of current year and proposed budget for next two years including detailed breakdown of revenue and expenses

Get Legal Register with State of TN online. $50 This does seem like a lot, but it is all for TRANSPARENCY. You are NOT entitled to donations, support, or volunteers simply by having a good cause.

Prepare to Stay Legal KEEP: Letter of Determination Renew Report This does seem like a lot, but it is all for TRANSPARENCY. You are NOT entitled to donations, support, or volunteers simply by having a good cause.

Get Online Giving Matters 211 Social Media Website Finances: new? Financial statements of current year and proposed budget for next two years including detailed breakdown of revenue and expenses

Get $$$

Change a Life, and Change your Community!!

Nonprofit Assistance Clinic 211 Partnership Roundtable Discussion Unifier Follow us on Facebook: United Way of Coffee and Moore Counties facebook.com/UWCoffeeMoore

Should I? Probably Not Could I? If you’re ready! Starting a Nonprofit Should I? Probably Not Could I? If you’re ready!