Your 501c3 is now official. You are a legal nonprofit organization, a public charity. It’s time to celebrate! This means that your organization does not pay federal taxes, sales taxes, or property taxes. You do not pay dividends to stockholders; you invest in the public good.
However, a nonprofit organization is like any other business in that you have employees, an office (or other structure), and utilities. You provide programs or other services to the public. These programs require trained staff and materials. In other words, you have expenses. So, now what?
It is time to generate revenue to pay for these expenses. Nonprofits raise money to support their operating and program budgets by asking donors to make contributions. Nonprofits are also allowed to raise money by accepting non-cash gifts such as stock and other securities and vehicles that are donated and sold at auction. Some of the expenses of a nonprofit organization can be offset by in-kind donations such as graphic design work, marketing, or legal services. Volunteers also help offset costs, especially when an organization is new.
A successful nonprofit cannot exist on passion alone. The success of your organization depends on you understanding and utilizing nonprofit best practices and having good board, program, and administrative structures in place.
Listed below are a few essential items to have in place before you dive into providing programs or services:
· The mission statement and by-laws go hand in hand. These documents define your organization and define why your nonprofit exists.
· A board of directors who believes in the mission as much as you do, who is engaged, committed, and diverse.
· Policies and procedures that clarify the administration, operations, programming, and fundraising of the organization.
· A strategic plan that includes an integrated development plan and supports your case for support.
· Clear and concise case for support, also known as a case statement.
· A donor database that matches the needs of your organization, to record relational information of prospects and donors.
· An experienced, well-trained development staff that understands the donor cycle for sustainable giving or an experienced fundraising consultant in the interim.
While there are more elements to consider as your organization grows, you must take the time to lay a solid foundation on which to build your organization, your programs, and your reputation.
Michelle Crim, CFRE
Dynamic Development Strategies can help. We offer coaching and fundraising services for our nonprofit clients. We specialize in startup and smaller nonprofits because we understand your challenges. Please contact us for more information.