starting and operating a non-profit is not a matter of filing a few forms and calling it good there's a lot that needs to be thought about and in today's episode we're going to look at the 10 11. the 11 must Do's for starting a non-profit [Music] hi I'm Greg McRae founder and CEO of foundation group and welcome back to our 501c3 University Channel where we make non-profit issues understandable and we've been on a theme lately with our last few videos a few weeks ago we talked about the five worst reasons to start a non-profit followed by the five best reasons well we had a lot of fun with those but today we're assuming you're doing this thing you're starting that non-profit well if you are you need to be considering these 11 things now we've covered many of these topics individually so we'll be brief and Link the related videos below here we go number one Define your purpose now when defining your purpose ask yourself these basic tenets of journalistic Investigation who what when where how and why why am I starting this non-profit what is the mission of my organization what's wrong am I trying to write what values are going to drive my my activities who's the target beneficiary group that my non-profit will impact who's going to administer the services and resources that my nonprofit is going to provide who are my board members and potential staff how am I going to accomplish my mission how will we pay for this believe me when I say that I left out more than I asked but do you see what I'm getting at here these are questions that you really need to ask and answer before you start filing paperwork now these plans don't have to be set in concrete but you do at least need to be considering these now once you have answers to these questions you can begin to flesh out a three-year action plan for your organization including potential activity Milestones impact goals budget figures and other details number two Define your programs now much of your three-year action plan that we just talked about you're going to need to disclose that to the IRS in your 501c3 application but there's other benefits that will impact your program plans and one is feasibility by defining your purpose and clearly outlining your program plan plans you can start to see if your plan is even realistic you can begin mapping out human resource needs program costs and fundraising goals another issue is IRS compliance you can't get where you're wanting to go without 501c3 status and to get that and keep it your non-profit must be organized for an exclusively charitable purpose now your three-year plan will help with that the third benefit here is sustainability once you've determined that your plan is feasible and IRS compliant you need to take a step back and ask is it sustainable can I generate enough public interest to get the financial support I need long term will it be compelling enough to retract and retain board members employees or volunteers that's a lot to think about number three understand that you do not own this now we have hammered this subject a number of times in other videos look over my shoulder here for examples of that or check out the links below suffice it to say that a non-profit doesn't have an ownership structure like a for-profit company does you may run it but you are legally a Steward not an owner number four choose your non-profit structure again this is an area we have covered extensively before but at some point in the formation process you're going to have to decide whether you are a public charity a private Foundation or a private operating Foundation each has its own distinct requirements and reasons why it might be the right choice for you number five establish your board of directors again another topic we have covered but here's the most important question you should ask when assessing board member prospects do they have a passion for the mission of my organization it if they're not willing to give their time talent and treasure they're probably not a good fit now don't misunderstand what I'm saying here to say that board members should be bankrolling your non-profit not at all but they should be all in find good people who care who have strategic thinking ability and have the time to invest in helping you oversee this thing and you'll be off to a good start number six understand conflict of interest now conflict of interest it snares many non-profits and new organizations are particularly vulnerable to this it's hard to avoid partly because close control can be advantageous while the nonprofit is getting its sea legs but what you have to avoid is conflict of interest turning into a neurometer private benefit again we'll link to more on that topic but the issue is that your non-profits activities and resources cannot unfairly benefit insiders there's lots of ways conflict of interest could turn deadly so check out the other content so you can learn more on that number seven is fundraising now I'm not going to say a lot about this but you must build a robust just sustainable mechanism for fundraising now that can be from donations grants or even revenue from your programs each has its benefits and limitations but it's critical for non-profits to diversify their funding sources to ensure that they can continue to operate in case any one of those sources goes dry you got to have money to operate number eight is employee compensation if you're going to have paid staff remember that you're running a business and employment taxes and laws they're going to affect your nonprofit just as much as for profits in fact nearly all the same rules apply and also keep in mind that there is a reasonableness standard that the IRS applies to non-profit pay so make sure your compensation levels don't exceed the norm for organizations like yours especially when it comes to executive compensation we're going to hit this topic more in detail coming up soon number nine record keeping this is yet another topic we've covered in detail but suffice it to say that you need to document document document perfecting the habit of documenting the activities of your non-profit is one of the most important disciplines any new social entrepreneur can Master the most important things I'm talking about contributions who gave what and when corporate records these are the your Articles of Incorporation your bylaws your corporate annual reports and meeting minutes the third category is activity records you're going to need to document what your non-profit does this goes for fundraising program accomplishments you're going to need to report all this to the IRS and the last one in the record-keeping category is your accounting records now if there's anything you got to get right it's this one we're talking about income expenses by category how much does your organization have whether it's assets whether it's liabilities critical that you get this right get help if you're not an accounting expert one of the most important things you have is a responsibility to keep up with number 10 and I promise we're getting near the Finish Line number 10 is compliance filings the links to specific videos are going to be popping up all around me but here's the short list IRS form 990 corporate annual reports State charitable solicitation registry operation and renewal wherever you are raising support from in some areas you're going to have other compliance filings to deal with know what you need to know on this one getting this one wrong will come back to bite you I promise finally number 11 who's going to help you with all of this now this one's a bit self-serving but let's be honest starting and operating a non-profit it's complicated and unless you're an expert in this stuff you are going to need professional assistance having worked with multiplied thousands of non-profits over the years we know what to do and when to do it if you need help starting a non-profit reach out and let us know we would love to help and once it's up and running we can help you keep your bookkeeping and your compliance concerns taken care of today's was a bit longer than usual but thanks for sticking with it it is all critically imported stuff for new organizations getting started thanks for watching now go serve your community hey do me a favor and don't navigate away just yet we would really appreciate it if you would hit the like button below as it really helps get our content recommended to more people subscribe Thrive if you haven't already as we have great content coming your way on a regular basis finally you can click the little bell icon to be notified of new content when we post it to learn more about Foundation group you can visit us on the web at www.501c3.org thanks and we'll see you next time [Music]