6 Steps to Start a Nonprofit the Right Way and Get Your First Paying Members

Terry Ibele 24 May 2017 7 comments

How to start a nonprofit

If you’re thinking of starting a nonprofit (association, club, charity, etc.), first of all, congratulations! 

Secondly, you’ve come to the right place. I created a comprehensive guide that covers absolutely everything you need to know about how to start a nonprofit and what it takes to become successful in today’s world.

Before we dive into this guide, I think it’s important to mention that new nonprofits face more challenges than ever before, because of how the internet and emerging technologies are changing the ways in which people interact with organizations. Here are some quick examples I cover in this guide:

It’s important to understand how these changes will affect your nonprofit, because the failure rate of new nonprofits is high. Plus with over 1.5 million established nonprofits in the US, you could be facing some tough competition.

While this may sound worrisome, I’ve seen many new nonprofits meet these modern-day challenges and gather hundreds of members and thousands in donations very quickly. In this comprehensive guide, I’ll share some of their stories and show you how to start a nonprofit that can succeed in today’s world just like them. I will also cover everything else you need to know, like how to register for tax exempt status, hire your first staff, build your website, and attract your first paying members. 

By following this guide, I believe you’ll stand the best chance of success with your new nonprofit.

(psst: save this beautiful infographic of all the steps)

 

Table of Contents

 

What Is a Nonprofit Organization?

In simple terms, a nonprofit organization takes any profits it receives from goods, services, donations, or sponsorships, and cycles them back into the organization to further achieve its mission. Nonprofits commonly serve communities (clubs, associations, or chambers of commerce, etc.), or are organized around social causes (humanitarian aid, disease research, education funding, etc.). In contrast, for-profit businesses distribute profits to the shareholders and investors of the organization.

 

Part 1) Advantages and Disadvantages of Nonprofits You May Have Overlooked

How to start a nonprofit

While starting a nonprofit is a worthy cause, any ambitious individual can quickly become overwhelmed by all the rules and regulations.

Before you jump in, consider this list of the advantages and disadvantages of starting a nonprofit to make sure you’re ready for what’s ahead.

 

Advantages of Starting a Nonprofit

  • Eternal Life: Nonprofit organizations (just as for-profit organizations) can exist long after their founders leave as long, as their purpose stays relevant and they continue to generate revenue. The oldest company in the world, the Kongō Gumi construction company in Japan has been around for nearly 1,500 years.
  • Organization at Scale: If you are a mission-driven individual who wants to make the world a better place, organizing a nonprofit around your chosen cause is the best way to build a team to expand your efforts and make a bigger impact.
  • Protection from Personal Liability: Employees of nonprofits are not personally liable for the debts of the nonprofit. This means that if someone wants to sue your nonprofit for a business-related debt, or injury, they can only go after the corporate entity, not the personal assets of its owners.
  • Tax-Exempt Status on Net Income: Nonprofits do not pay taxes, so all earnings can be cycled back into the organization to improve it.
  • Public and Private Incentive to Help You Out: Donations made by individuals and corporations are tax-deductible, thereby incentivizing people to contribute to nonprofits. All you have to do is create a clear mission and a strategy to collect donations. I will cover both of these areas in this article.
  • Grants Eligibility: An additional source of funding for nonprofits is through government grants.
  • Employee Benefits: If your nonprofit has enough employees, it may qualify for group discounts to health or life insurance benefit programs.
  • Formalized Structure: Incorporating a nonprofit can allow you to create formalized roles with job descriptions and responsibilities, which can attract more professional and skillful candidates to work with you.
  • Volunteer Board Members: Typically, nonprofits do not pay their board members, which can save a lot of money. Another pro about board members is that they bring a variety of valuable skills, expertise, and greatly expand your network.
  • Highly Motivated Employees: Research shows that nonprofit employees are highly motivated by intrinsic rewards like achievements of their clients and a good work/life balance, rather than pay. This means you can expect to attract employees who care about your nonprofit’s purpose and want to help you make a difference in the world.

 

Disadvantages of Starting a Nonprofit

  • Time and Money: Starting a nonprofit is likely to take months of preparation and devoted work. It can also cost up to $800 just to submit your application to the IRS. Depending on your bandwidth and knowledge, you may need to hire a consultant to make sure you’re filing everything correctly.
  • Continued Maintenance: All nonprofits are required to submit annual filings and comply with all laws of incorporation. There are also quite a few activities which may jeopardize a nonprofit’s status (like lobbying). Note that legal requirements differ from country to country. See here for Canadian requirements.
  • Prohibition from Political Campaigning or Lobbying: nonprofits which engage in attempts to influence legislation risk their tax-exempt status.
  • How to start a nonprofit Public Scrutiny: Anyone may request copies of any nonprofit’s filings and review their expenditures, salaries, and income. If your nonprofit will have a large public facing, you can expect some scrutiny over how you handle administrative expenses. There are always articles about overpaid nonprofit CEOs being published. Just take a look at this image that showed up in my Facebook feed and received hundreds of comments (whether true or not).
  • No Profits: No individuals or shareholders can receive profits from your nonprofit. This can make it more difficult to generate interest from potential investors. 
  • Volunteer Board Members: Volunteer Board Members can be a pro and a con. From a con perspective, sometimes it may be had to activate your volunteer board to contribute to achieving goals.
  • Funding Difficulty: While listed as a pro before, getting funding for your nonprofit can be a constant struggle. Given that there are over 1,500,000 nonprofits in the US alone, there is high competition to receive funding from donors, funds, and grants. Many nonprofits hire professional grantwriters to give themselves a better chance.
  • Overworked Employees: Small to medium-sized nonprofits typically have tight budgets and only a handful of employees, meaning more work for less pay. It’s a scenario some are calling “The Plight of the Overworked Nonprofit Employee.”

If these advantages and disadvantages are inline with your expectations of starting a nonprofit, the next section will cover everything a new nonprofit needs to be successful.

 

Part 2) The Nine Steps to Incorporate a Successful Nonprofit

steps to start a nonprofit

(psst: save this beautiful infographic all the steps)

 

How Do You Form a Nonprofit in the USA?

There are the 9 steps to start your nonprofit. It's worth noting that some of these steps will change depend on your State, but at a basic level, they remain the same:

  1. Three Things To Research Before Starting a Nonprofit
  2. How to Build a Lasting Foundation
  3. What to Include in Your Business Plan
  4. Your Four Main Sources of Revenue
  5. How to Choose the Best Name for Your Nonprofit
  6. How to Recruit Your Board
  7. How to Incorporate Your Nonprofit
  8. Filing to be Tax Exempt
  9. Ongoing Compliance

 

Step 1) Three Things To Research Before Starting a Nonprofit

research how to start a nonprofit"I wish I knew that before I started.” These are words you never want to say.

Unfortunately nearly half of all nonprofits are setup to fail from the start, because they don’t put enough time into research and planning. 

And while there may still be some things you wish you knew, you can at least limit your worry by answering these three questions which lead most successful nonprofits down the right path:

  1. Do you have proof that your nonprofit will fill an unmet need in your community? Gathering support, receiving grants, and getting donations will become a whole lot easier if you have strong numbers to back up your idea. For example, if you want to start a tennis club, you’ll need to have a good estimate of how many tennis players live in the region that don’t have anywhere else to play.
  2. Are there any other organizations already serving the same need you plan to? Even if your nonprofit is targeting a very niche need, there may be another organization already servicing that need. As I mentioned in the intro, Large organizations are using “big data” to deliver extremely personalized experiences to large groups of people, meaning they can now fulfill the roles that small organizations used to play. For example, if you wanted to start a children’s illustrators association, you may have competition from a children’s writers association, many of which also service children’s illustrators. The National Council of Nonprofits offers a locator tool to find nonprofit organizations in your area and throughout the United States. 
  3. What sort of people will join or support your organization? Gaining support for your nonprofit quickly is one of the most crucial steps in building a successful organization. That’s why knowing exactly who your targeted demographic is can make it easier for you to find supporters and members, and create resources they’re interested in. One good tool to help you research demographic information is the American Fact Finder

Once you’ve answered these three questions, you’ll have a clear idea of how to give your nonprofit the best chance at success. Now it’s time to use what you’ve learned to build a plan to give your nonprofit a lasting foundation.

 

Step 2) How to Build a Lasting Foundation

foundation how to start a nonprofitAfter you're able to explain the necessity of your new nonprofit, it's time to build a strong foundation, and the strongest foundations start with the founder. If you're the founder... that's you!

According to leadership expert Brian Tracey, who's worked with more than 1,000 organizations, there are five traits that all successful Founders must possess:

  1. Self-Discipline: As Brian says best, "If you can discipline yourself to do what you should do, whether you feel like it or not, your success is virtually guaranteed."
  2. Integrity: All successful organizations are built on trust. People will be more willing to work with you and support you if they can trust you, especially during difficult times. "Be perfectly honest in everything you do and in every transaction and activity," Brian says. "Never compromise your integrity."
  3. Persistence: If you are able to develop a habit of persistence even before you meet obstacles, they will be much easier to get through once you meet them. "The courage to persist in the face of adversity and disappointment is the one quality that, more than anything, will guarantee your success."
  4. A Clear Sense of Direction: In Brian's experience, he's seen motivated entrepreneurs get hijacked by the day-to-day tasks and short term problems that naturally arise from starting an organization. That's why Brian says to develop a clear sense of direction, not only for your own work, but for the people who work with you.
  5. Decisive and Action Oriented: Successful founders must think and make decisions quickly. Seek feedback just as quickly and self-correct when needed. Brian says, "The key to triumph is for you to try. Successful people are decisive and they try far more things than other people do."

If you can instill in yourself a strong tie to each of these traits, and live them out in practice, you'll have built the strong foundation your nonprofit needs to succeed in today's world. The next step to start a nonprofit is to develop a clear plan on how your organization will operate.

 

Step 3) What to Include in Your Business Plan

plan how to start a nonprofitThe mistake many founders make in the beginning stages is that they skip ahead to incorporating their nonprofit without spending the time to create a business plan.

And while a “business plan” may sound like it only applies to “for-profit” organizations, nothing could be further from the truth. As you’ll quickly discover, potential investors, donors, and board members will all ask to see copies of your business plan, and if you don’t have one, you’ll miss out on a lot of opportunities.

If you need help creating your business plan, here are 18 examples of different nonprofit business plans you can follow. If you’re creating your own from scratch, there are seven major areas you’ll need to cover:

  1. Executive Summary: This is a short overview of your business plan. When writing yours, think of it as an elevator pitch.
  2. Products and Services: Here you fill out the type of value will you be creating and what makes it unique. Besides membership and events, many nonprofits offer additional merchandise like t-shirts to help bring in some extra money (revenue will be covered in the next step). For example, the New York Association of School Psychologists offers travel mugs, jewelry, books and apparel to help raise more money.
  3. Market Analysis: In this area, you will explain what the market landscape looks like: your competitors, your stakeholders, and a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) on why your organization will succeed.
  4. Marketing Plan: A strong marketing plan is arguably the most important thing when it comes to nonprofit success or failure. Just take the story of Kari Keir, a Minnesota native who started her own nonprofit in 2012, but just a year later was forced to shut it down, because she didn’t have a marketing plan in place. “We were naïve to think we would form and people would hear about us through word of mouth and we would be successful.” To avoid her mistake, it's necessary to develop a strong marketing plan that does three things:
    • Explains who your organization will service
    • Explains how you will find these people
    • Explains how you will convince these people to support you
  5. Operational Plan: The "operational plan" is just a fancy way of answering the basic questions of:
    • Where will your office be?
    • What supplies and equipment will you need?
    • How will you deliver your services?
    • What kind of staff or volunteers will you need?
  6. Organizational Structure: This is the place to list out your staff, their roles, and how they’re organized. Talk about what expertise each role will have and how your organizational structure can make your nonprofit successful. To create a simple organizational chart, here’s an easy tool called Organimi that can help
  7. Financial Plan: This is the page any potential investor will flip to before deciding to support your organization. It will also help you apply for grants and loans. To create yours you will need some knowledge of basic accounting principles to project cash flow analysis and budget. If you need help, The Wallace Foundation has some excellent resources and calculators to get you started. Another part of your financial plan is how you plan on generating revenue for your organization. I cover this in full in the next step.

Many organizations have difficulty building their business plan, but it can be easier by using the example templates I provided. In the next section on how to start a nonprofit I’ll cover the four main sources of revenue for nonprofits and how to create the best strategy for each. 

 

Step 4) Your Four Main Sources of Revenue

revenue how to start a nonprofitIn the business world, organizations make the majority of their revenue from products and services. Nonprofits differ in that they have three additional major sources of revenue. Here are all four:

  1. Fees for Services and Goods from the Private Sector
    • Membership dues and event tickets
  2. Private Contributions
    • Regular Individual Donors
    • Fundraising
    • Corporate Sponsors
  3. Government Grants
  4. Fees for Services and Goods from Government
    • Note: I will not be covering this as it only applies to nonprofits that provide services on behalf of the government, like healthcare, or public education. 

In the below graph, you can see the average proportions of each revenue source. 

how to start a nonprofit revenue 1

(Source: Nonprofit Sector in Brief 2014 National Center for Charitable Statistics, the Urban Institute)

No nonprofit I’ve come across has figured out how to do all four exceptionally well. While some do well with donations, others do better with grants, etc. But, what I have seen work best when approaching all four at once is to have separate strategies for each different revenue source. Below I’ll cover the basics of each revenue source and how to develop a strategy for your nonprofit.

 

1) Fees for Services and Goods from the Private Sector

how to start a nonprofit revenue 2

Revenue from goods and services include money made from membership dues, event tickets, professional services, and products like merchandise. For example, the writing association I'm a member of charges a yearly membership fee, event ticket fees, fees for professional editing, and they sell t-shirts.

The two biggest contributors in this form of revenue are from membership dues and event tickets, which I cover below.

 

Membership Dues

Membership dues are the monthly or yearly price people pay to become a member of your organization. But, people will only join your nonprofit if there’s something in it for them. A study of over 800 associations reveals the two main reasons anyone joins an association (this also applies to other types of nonprofits):

1) Access to a unique community of like-minded individuals

Nothing engages and attracts members greater than the desire to belong to a community who shares their personal interests. And among the most popular ways to build a community of like-minded individuals is through networking events. In fact, here’s an example of an association who grew over 1,000 members just by attracting new people to network at their annual conference.

2) Access to specialized information and resources in your niche

What can your organization offer that someone would actually pay for? Imagine you’ve started a Writing Association. The types of specialized information you can offer could look like this (in fact, these are some of the specific reasons I joined my Writing Association):

  • Writing workshops
  • Education sessions on how to pitch a novel to agents
  • Legal advice when it comes to copywriting

How to create a community people want to be a part of and resources people can't wait to access

People join communities and access resources, because they create value.

Unfortunately, creating value is one of the biggest struggles of new nonprofits. 

“Why aren’t people coming to my events? Why aren’t people asking to use our services?” These are questions I hear all the time. The reason is because holding the right types of events and creating the right types of resources take a lot of understanding and hard work. You need to know who exactly to attract and what exactly they’re looking for. Surprisingly, this is actually where the for-profit world can lend a hand. For-profit businesses don’t have grants, donations, and dues to rely on for revenue, so they must figure out how to create enough value with their products and services to generate profit.

To create value, for-profit businesses follow five steps, which can easily be applied to any nonprofit strategy. Here are those 5 steps as offered from Inc.com, which I’ve tailored to a nonprofit standpoint:

Step 1:  Understand what drives value for your members

The only way to understand what drives your members is to talk directly to member prospects and find out what kind of information, events, and services they would be willing to pay for.

Step 2:  Understand your value proposition

Having a clear and concise value proposition is the easiest way to interest a prospective member in your organization. As Wordstream explains, “A value proposition tells prospects why they should do business with you rather than your competitors, and makes the benefits of your products or services crystal clear from the outset.” Or, in nonprofit terms — “Why should someone become a member and what promise are you offering them in return.” But, a successful value proposition is more than just words, it’s the look and feel of your brand, your website, your services, your events, and how you treat members. Take for instance the Apple iPhone. Wordsteam suggests that the Apple iPhone experience IS the product. Anyone who owns an iPhone can tell you how simple the interface is, how beautiful the design is, and how easy (and addicting) it is to use. In the same way, what value proposition are you offering prospective members that will want them to join your organization? Imagine you’re a tennis club. What makes you stand out from the other tennis club down the street. When a prospective member visits your tennis club, what’s the impression of the courts, equipment, change rooms, etc.?

Step 3: Identify the members who you are able to create the most value possible for

The most successful nonprofits create profiles of their ideal members so they know where to find these people, how to talk to them, and their needs. It’s because they know these ideal members so well that they can offer them exactly what they want. Ideal members are also referred to as a Target Market. “Nonprofits are so passionate about serving as many people as possible, they tend to think wide versus deep," says Susan Burnash, Nonprofit Marketing Strategist. "They would rather say ‘We serve homeless people,’ than ‘We service homeless senior adults in the city of Atlanta.’ Although this is admirable from an organizational standpoint to have such a philanthropic mission, from a marketing perspective, this blanket statement (and Target Market) is a marketing disaster waiting to happen.” Susan also suggests some questions you can answer to help you create your own Target Market:

  • Who would join your organization? 
  • What is their age and gender? What are their interests? What is their income level?
  • Where do these people live? Where do they hang out? Where do they get their news from?

Once you have your Target Market identified, you’ll have a much better idea about what products and services to offer and how to advertise them to these people.

Step 4:  Create a win-win price

The price you charge members to join your organization is called a member due. Member dues are often paid on a monthly or yearly basis, and quite often nonprofits make their member dues renew automatically monthly after month or year after year until a member cancels their membership (this saves a lot of time in administration). 

While there is no perfect formula for determining your member due price, your goal is to create a win-win scenario:

A win for your members that keeps member dues low.

A win for your organization that covers as many administrative costs as possible through member dues.

With some basic math, you can figure out how much revenue you can expect for your organization from member dues:

Expected Members x Yearly Member Dues = Yearly Revenue

Ex. 500 Members x $50 Yearly Member Dues = $25,000 Yearly Revenue

In the above example, $25,000 is certainly not enough to run an entire organization and pay staff. That’s where event fees, donations, grants, and products and services also contribute. But before you jump to other sources of revenue, there’s one more step to ensure you build a robust member-due driven revenue stream.

Step 5:  Focus investments on your most valuable members

Which do you expect to be more valuable to your organization in the long run?

  1. One new member?
  2. One retained member?

The answer is definitely one retained member. That’s because the costs with finding and convincing a new member to join your organization can be up to 25 times more expensive than keeping a current member engaged. So, when creating value to attract members, consider how you will retain them in the long run. As time goes by, you may have to refresh your strategy to keep up with the times. To help you out, here are 12 practical ways to engage and retain member in today’s world.

 

Event Fees

I know a Lawyer’s Association that runs completely off event fees without charging membership dues. That’s because they’ve created a regular schedule of amazing events that sell out every time.

However, this isn’t the case with most organizations who use events as a tool to supplement their revenue, and to attract new members.

How much you rely on events for revenue depends on what type of organization you’re starting (a tennis club, vs a foundation would have drastically different event revenue). However, to help you see what most nonprofits do when it comes to events, I analyzed over 1,000,000 events created by Wild Apricot’s nonprofit customers.

Here are some of the highlights:

  • Member meetings are most common in February/March (think educational workshops, banquets, etc.)
  • Networking events are most common in February/March (think industry events, speaker sessions, etc.)
  • Conferences, conventions, and retreats are most popular in March/July/September/October

You can view the full details of what I call The Ultimate Nonprofit Event Calendar here.

If you plan on making paid events a major source of revenue for your organization, here is a full guide on how to plan an event and a fantastic event planning checklist that you can print off and use.

 

2) Private Contributions

how to start a nonprofit revenue 3

Private contributions are made in the form of donations. But, before you can accept donations, or engage in fundraising activities, many states require you to complete Charitable Solicitation Registration. You can do this in tandem with incorporating your nonprofit. Some states even require you to register for “Games of Chance” like raffles and 50/50 draws, whereas in other states, these activities are actually illegal. To find out your State’s regulations, and to register, select your State from this map.

The Nonprofit Council has also put together a great article on Ethical Fundraising to help guide you when it comes to soliciting donations.

When you’re ready to start soliciting donations, there are three main ways to do so:

 

Regular Individual Donors

To reduce personal income tax, many people contribute to nonprofit organizations. However, people won’t give to your organization unless they believe in your cause and can see you doing good work. Once you’re ready, try some of these 18 ways pro nonprofits are collecting donations from individuals.

 

Fundraising Activities

Fundraisers are the simplest tactic to increase revenue. That's because they utilize the people who already believe in your organization to reach new people through fun events and campaigns. Even the smallest nonprofits are able to quickly raise thousands with some simple fundraising tactics. Take for example the story of one woman who raised $8,000 for her football club in just one month by shooting a video and having her club members email it out to their friends.

Fundraisers are also often best paired with events. If you want to raise money by holding a fundraising event, you’ll want to read this. A study of 99 nonprofits discovered that fun runs are the most cost effective, easiest to plan, and have the highest fundraising potential of all other types of fundraising events.

If you need more help, The Fundraising Authority has a great guide on fundraising for beginners.

 

Sponsorship Relationships

Sponsorships can be the toughest type of private contribution to seek. Some organizations have a whole team setup just to seek out sponsors and maintain relationships. But if you're just starting out, there’s only one activity you need to do that has the highest chance of landing a corporate sponsor. According to sponsorship expert, Chris Baylis, that one thing is a discovery call. The reason discovery calls win over all other tactics (including creating the dreaded sponsorship package) is because you can qualify a potential sponsor on the spot and begin a relationship right away with those interested.

 

3) Government Grants

how to start a nonprofit revenue 4

how to start a nonprofit grant

If you’re new to grant applications, beware! The words “grant application deadline” have been known to cause panic in the nonprofit world, as this comic indicates.

(Note, the Happy Healthy Nonprofit book in the image is a great book by Beth Kanter and Aliza Sherman on eliminating stress in the nonprofit workplace.)

Filling out a government grant correctly, within wordcount, and on time can be a very stressful task. My best advice here is to know what grants you can apply for and start the application far in advance. I’ve heard way too many stories of computers crashing the night the application is due.
Here are some helpful places to begin your search for grants relevant to your nonprofit:

To help you get started with an application, the United States Government has a great guide on how to determine your eligibility, application instructions, and even how to avoid grant scams. Or, if you enjoy webinars, Charity How To has a free webinar on how to write your first grant.

Building a business plan and creating your revenue strategies from scratch is not a lot of fun, but the payoff is definitely worth it. Once you’ve completed all these steps, it’s finally time to do the one thing most are itching to do from the start: pick a name.

 

Step 5) How to Choose the Best Name for Your Nonprofit

name how to start a nonprofitTypically the best nonprofit names are easy to remember, indicative of what they do, and sound appealing.

If you haven’t come up with a name yet, Nonprofit Rally has a number tips to give your nonprofit the best name. They say that the best nonprofit names answer three questions:

  1. My nonprofit will...? To help answer this question, write all the action words you can think of to describe your nonprofit (give, teach, heal, feed, rescue, etc.)
  2. My nonprofit helps...? Describe the market you plan to serve (children, hungry, homeless, elderly, cats, environment, etc.?)
  3. Our members are...? If your nonprofit has a specific type of member then it may be important to include them in your name. Doctors without Borders and Mothers Against Drunk Driving are good examples of this.

If you need more examples, here are three great nonprofit names that answer the above questions. Also note that it’s okay to choose a longer name as long as it’s descriptive:

Once you’ve picked a name, you’re not done yet. Make sure another organization doesn’t have the same name as you by conducting a quick Google search. Then you’ll need to check if it’s available with the Secretary of State in your State. Here is a map with links to each Secretary of State where you can check.

Once you have a business plan and a name, there’s one more step before being incorporated. That is to gather your board.

 

Step 6) How to Recruit Your Board

recruit how to start a nonprofitSome States will require you to gather your board before incorporating, because you must list their names in the documents. 

If your State doesn’t require this, it’s still a good idea to recruit your board first, because they can help you with the incorporation process and lead your new nonprofit on the best path when faced with challenges at the start.

In this section, I will cover how to recruit the best board members for your nonprofit and the five steps to get them up to speed as quick as possible.

 

Who to Recruit for Your Board

An unsupportive and unmotivated board can quickly dismantle a nonprofit. Unfortunately this isn’t a rare occurrence and I’ve heard many stories of office drama, board members scrapping the mission, and even forcing staff to carry out their own initiatives. If you’re worried about this happening to you, here are 14 interview tips to help you uncover a toxic board member from the start.

On the other hand, a supportive and motivated board can help your nonprofit grow quickly. It’s all about finding the right fit during the hiring process. But what is the “right fit” exactly?

You may be tempted to hire someone with the right fit when it comes to skills and experience, but a survey of over 2,000 HR professionals reveals that the right fit has more to do with the following seven characteristics:

  1. Strong work ethic: Setting and achieving goals
  2. Dependable: Consistently following through
  3. Positive attitude: Creating a good environment
  4. Self-motivated: Working effectively with little direction
  5. Team-oriented: Making the most out of collaboration
  6. Effective communicator: Understanding the benefits of clarity
  7. Flexible: Adapting in a meaningful way

Another important point, as The Nonprofit Answer Guide mentions, is your board should be made up of individuals who have expertise and resources in different areas. A good rule of thumb when recruiting is: 

  • One-third from individuals who have access to financial resources or soliciting donations.
  • One-third from individuals with management expertise in areas of financial, marketing, legal and the like.
  • One-third from individuals connected at the community level, with expertise in your service field.

If you recruit a team who possess the right experience, skills, and characteristics, there’s a good chance you’ll build a strong team that will make your nonprofit a success.

To help you recruit such a team, I’ve broken down the whole recruitment process with into four steps, including templates to follow and places to find board members.

 

1) Define Success and Build Job Descriptions

Before you can begin your recruitment process, you’ll need to determine which roles you need filled. This is where you can refer back to the organizational structure you created in your business plan.

Most nonprofits have similar roles when it comes to the board. Here are the three most common ones for you to consider and examples of what success in each role might look like for your organization:

  • Leader: This person is the key representative who can lead the nonprofit and act as a spokesperson. The role title might be: President, CEO, Board Chair, etc. If you’re creating this nonprofit, this role is likely yours. Sometimes boards have a second in command to the Leader, typically called the Vice Chair.
    • Success for the Leader might be to grow the organization a certain percentage year over year, develop a strong culture within the nonprofit and build up the brand of the nonprofit as a professional organization within the community.
  • Secretary or Committee Chair: This role is responsible for helping the Leader execute projects, write meeting minutes, keep track of office activities, help organize meetings, make sure the board complies with all local bylaws, etc.
    • Success for the Secretary might be to organize all meetings on time, facilitate discussion between board members and make sure all board members are informed and on track.
  • Treasurer: This person is responsible for keeping track of money, fees, expenses, paying bills, etc.

After determining the roles of your board members and defining success, it’s time to craft job descriptions to recruit your board and formalize their roles. Here are some great job description examples of each role, but overall your job descriptions must include:

  • Benefits of the position
  • How long the term of board member is for
  • General duties
  • Weekly time commitment
  • Legal / Financial commitments
  • Qualifications / Skills requirements

This is also a good time to note that board members are typical not paid, and are often expected to contribute financially to the organization. When writing up your job description, it is a good idea to mention this. If you do decide to pay your board members more than $600 a year, you must issue them an IRS Form 1099 Msc.

Another important note is that your organization will need bylaws, which all board members must follow when carrying out their duties. Your bylaws will establish procedures for the affairs of your organization (operations, elections, conflicts of interest, etc.). To help you get started drafting your own bylaws, consider this helpful template with examples.

Once you have full job descriptions, it’s time to find the best candidates.

 

2) Where to Find the Best Candidates

Most new nonprofits looks for candidates from their personal connections — colleagues partners, or volunteers, as these people already have access to their community and are in line with their mission and values. However, a word of caution when approaching family and personal friends as often emotional matters can take precedence over business goals.

If you need help finding potential candidates for your board members, there are a number of great resources perfect for just that, including:

Once you have a short-list of potential applicants, the next step is to interview these people to determine the right fit.

 

3) How to Screen and Select Your Board Members

Before you begin interviewing, develop a standard set of questions to ask all candidates. This will help you objectively evaluate each against the other.

To help you out, here are five necessary questions developed by Joan Garry, the “Dear Abby” of nonprofit leadership to ask your candidates:

  1. What do you know about our organization? Why are you interested in committing your time and energy to us?
  2. What do you think are the characteristics of a great board member?
  3. Fundraising is a significant obligation of board service (state give/get clearly). Can you tell us about your experience in fundraising? 
  4. Board members bring experience, wisdom, strategic thinking, and their rolodexes.  Can you tell us about yours?
  5. What kind of autonomy do you have over your calendar? There will be meetings between board meetings, occasional donor lunches.

When you conduct the interview, don’t do it alone. Gather a small committee of people whose judgement you trust to help you make the right decision.

Once you’ve selected your board members, have them sign a Board Member Contract to officiate their role. Here’s a great Board Member Contract template you can use

The next step to ensure success is to give your board members the training and tools to let them hit the ground running. A comprehensive orientation program will do just that.

 

4) Five Steps to Get Your New Board Members up to Speed Quickly

Every smooth transition into a new role starts and depends on orientation.

If you need help with this, here is a great template to get you started. And if you need an example to follow, the Association for Talent Development has published all their onboarding materials online in a comprehensive list. However, since you’re just starting out, a more simple process that you build on over time may be best. At a minimum, you’ll want to cover the following: 

  • An overview of the organization – its history, mission, vision, and strategic plan
  • Organizational chart
  • Schedule of board meetings (and locations)
  • Contact information – board chair, members, staff contacts etc.

Once you’ve created your guide and materials, the next step is to orient your members. Rachel Muir, a seasoned nonprofit founder suggests five critical steps to orient your members in the most effective way:

  1. One-on-one orientation. This should be done by the founder, or CEO. Include a tour, meeting of the rest of the board and reviewing of the board contract.
  2. Match them with a board buddy. At the beginning, everyone will feel like the new kid on the block. Board buddies can help your new members get up to speed faster and eliminate feelings of intimidation from insecurity. Plus, one of the most common reasons people become board members is so they can network and socialize.
  3. Provide them with your orientation guide. These are the materials you created in your guide. Since your board members are volunteers, take-home materials will allow them to get up to speed in their spare time.
  4. Host a welcome reception. This is a great way for everyone to get to know each other, including staff, donors, volunteers, and community leaders.
  5. Announce it publicly. As Rachel says, “Send a press release announcing your new board members to your local newspaper and business journal. Most have an “On the Move” section, and this is a simple, free way to get publicity for your organization and your new board member.”

A well oriented board is one of the best ways to ensure success of your new nonprofit. Once you’ve completed the above steps, it’s time to finally incorporate your nonprofit.

 

Step 7) How to Incorporate Your Nonprofit

how to incorporate a nonprofitWith your business plan and board in place, you’re ready to incorporate your nonprofit. I’ve taken this section directly from the USA.gov website so that the steps are very clear:

Choose a business name: (covered in the above section)

Appoint a Board of Directors: (covered in the above section)

Decide on a legal structure: Choose whether your organization will be a trust, corporation, or association.   

File your incorporation paperwork: Regulations differ from State to State. Check with the National Association of State Charity Officials (NASCO) for your state. If you plan on soliciting donations from more than one State, you will have to register there too. Generally you will have to register:

  • Your nonprofit’s name
  • Name and address of the registering agent (the founder)
  • Address of the nonprofit
  • Names and address of the board members
  • Statement of purpose to which your nonprofit will operate  

Apply for nonprofit federal and state tax exemptions: A nonprofit organization may be eligible for exemption from federal income tax. The IRS provides guidance and instructions on applying for tax-exempt status, but I cover more of this in the next step.

Obtain necessary licenses and permits: Does your nonprofit have all the licenses and permits needed to comply with federal, state, and local rules?

 

Step 8) Filing to Be Tax-Exempt

how to file for tax exemptionOne of the main benefits of incorporating a nonprofit is tax-exempt status. This means that your organization does not pay any tax to the IRS.

There are 29 types of nonprofit organizations that can file for tax-exemption under section 501(c) of the Internal Revenue Code. The most common of these is the 501(c)(3), which includes all charitable, religious, scientific, and literary organizations. Other types of tax-exempt nonprofits fall under different 501(c) codes such as:

  • Fraternities: 501(c)(8) 
  • Social and Recreational Clubs: 501(c)(7)
  • Trade associations and Chambers of Commerce: 501(c)(6)

If your nonprofit identifies with one of the above, or another type of organization, you can view the whole list here.

In order to receive tax-exemption, you will need to register with the IRS as your appropriate 501(c) organization. 

Here is the link to apply for 501(c)(3) status on the IRS website.

apply for 501(c)(3) status

If you need help, you can phone the IRS Tax Exempt and Government Entities Hotline.

The application process can be lengthy (anywhere from 3-12 months to receive a decision), so start as early as possible. To make sure you complete everything correctly the first time, read through these 13 common reasons why applications are rejected. You should also familiarize yourself with all related IRS resources, which offer more details on completing your application:

It’s also important to note that there are fees for filing for tax-exemption:

  • $850 if you expect annual gross receipts over $10,000
  • $400 if you expect annual gross receipts under $10,000

The final step is to receive tax-exempt status for your nonprofit is to register with your state. This is usually accomplished through the state tax commission, but the IRS State Links for Exemption page will help you find the correct office, filing procedures and annual reporting requirements in every state.

By following these steps on how to start a nonprofit, you'll have all your bases covered and be in a top-notch position for staying in compliance with both federal and state regulations.

 

Step 9) Ongoing Compliance

nonprofit ongoing complianceOnce you’ve successfully incorporated your nonprofit, there are a number of things you must do every year to keep your tax-exempt status.

The first thing you must do is file a 990 Form. This form collects information regarding your revenue, expenses, board members, achievements, and other operational information. However, which form you fill out depends on your gross receipts.

After the 990 Form, there are a number of things you must do to remain in good standing with the IRS. For a fun way to remember what to do, RocketLawyer has put together a 17 “Thou Shalt” and “Thou Shalt Not” rules. Here are a few of them:

  • Thou shalt not have any shareholders
  • Thou shalt not contribute to political campaigns
  • Thou shalt conduct proper board meetings

This is also a good time to note that before you can accept donations, or engage in fundraising activities, many states require you to complete Charitable Solicitation Registration. You can do this at the same time as incorporation.

If you and your board follow all of the compliance regulation (remember that this is part of the responsibility of the Secretary or Committee Chair), then you shouldn’t have any problem maintaining your tax-exempt status.

Now that you’ve completed all the legalities of starting your nonprofit, it’s time to set up shop.

 

Part 3) Setting Up Shop and Hiring Staff

How to start a nonprofit

In this section, I'll cover how to set up your office (marketing collateral, furniture, equipment, etc.) on a dime and which staff most new nonprofits hire first.

 


While designing the look of your organization can be fun, don’t spend a single cent on business cards, banners, t-shirts, or any other marketing collateral until you’re fully incorporated and are ready to start getting members, sponsors, and donors. I know of a nonprofit startup that went broke from purchasing marketing collateral before they even got incorporated.

However, once your organization is setup and ready to go, arming your staff, board, and volunteers with business cards, t-shirts, and other materials can be a great way to help spread the word about your organization.

So, when you’re ready, here are some easy ways to get great-quality designs and materials printed (cheaply).

The cheapest way to get a good logo is to head on over to Fiverr, where you can purchase a custom-designed logo for $5 or more. Simply select what type of logo design you’d like and then select your budget and Fiverr will introduce you to a number of designers willing to design within your budget.

If you’ve got more of a budget (~$300), you can create a logo design competition for your nonprofit over on 99designs, where designers will compete to create the best logo for you. In order to get a good competition going, here’s a great guide to getting started.

You can also use Fiverr and 99designs to design any other graphical content you need like business cards, or t-shirts. 

And if you’re looking to print materials, the cheapest option is VistaPrint, which frequently has sales, but also offers discounts for nonprofits (email them to find out about their nonprofit discounts). Even without the nonprofit discount, you can get:

With a budget of just $100, you can get a logo, 100 business cards, a few t-shirts and a banner for your organization to setup right away. Of course you’ll need to have everything shipped somewhere, so in the next section on how to start a nonprofit I’ll show you how to get your nonprofit an address for $50.

 

Setting Up Your Office On a Dime

The writing association I'm a member of has nearly two thousand members and operates entirely from a single desk in a shared office space. The only other fixtures are a phone, and a filing cabinet. For member meetings, they rent a room (for free) at a local library. I also know of another association, CALL, which operates entirely out of volunteers’ homes.

While not as glamorous as a large office complete with cubicles, meeting rooms, and a reception area, these nonprofits have been very resourceful with what they have. The reason they’re able to do this is because most of their activities are run using software entirely over the internet. I'll tell you what type of software that is in an upcoming section.

Depending on what types of services you offer, you may not need a physical office space, which can save you a lot of money. And even if you do, there are a number of organizations that rent office space at a discount to nonprofits and will even donate furniture and computer equipment. 

No Office: If you choose to run your nonprofit without a physical office, you will still likely need a PO Box to accept mail. This can cost anywhere from $50 per year to a $1,000 depending on your location and the size you need. Here are instructions on how to rent a PO Box.

Renting an Office: If you would like to set up an office space for your organization, there are a number of inexpensive options for nonprofits. Here are some places to look:

Whether you choose to rent out space, or operate out of home, you will still need furniture and computer equipment. Luckily there are also a number of organizations that donate essentials to nonprofits. Below are a number of organizations that donate free or discounted furniture or computer equipment to nonprofits.

Furniture:

Computer Equipment:

Once you have your new office space organized and your computer up and running, next, you will determine if you can run your entire nonprofit yourself, or whether you will need to hire staff.

 

Which Staff You’ll Need to Hire

Many small nonprofits start with only one part-time or full time staff until they reach a point where they need extra help to grow larger.

The writing association I'm part of has a few thousand members across the country, but only one part-time staff. That’s because most of the association’s value is offered through online resources, and once-a-month meetings for members in the headquarters’ city. The board is also very active in the association and many members volunteer to help see to other operations (myself included).

If you’re unsure of how many staff you will need, the best thing to do is reach out to another nonprofit of a similar size and consult them. The other determining factor on whether or not you’ll need a staff is how your nonprofit will operate. Below I’ve listed some common nonprofit staff roles and what type of organizations they’re typically found in.

  • Membership Manager / Administrator: If your nonprofit will gather members (like in a club, association, or society), this role is crucial for maintaining member records, developing member recruitment strategies, and engaging/retaining members.
  • Communications Manager / Administrator: If your nonprofit will greatly rely on social media campaigns, public relations (PR) activities, public speaking events, and member and volunteer management, then consider hiring someone to fill this role.
  • Fundraising Manager: If your nonprofit relies primarily on government grants, public fundraisers, or corporate sponsors (like a charity or foundation), you may consider hiring someone who specializes in raising money.
  • Events Manager: If your nonprofit will coordinate large monthly events, yearly conferences, and other types of events like a speaker series, or educational workshops, then an Events Manager is a must.

Even if the above positions don’t apply to your nonprofit, you should still consider hiring a general administrator either full time or part time. Just like the story of Kari Kehr, who had to shut down her new nonprofit after just a year, the failure of many new nonprofits is that they can’t find the time to do everything themselves.

“I met with other nonprofits to learn their best practices and heard over and over we would need a full time person working to grow it in order to be successful,” says Keri. “Our board of directors was made up of four women with big full-time jobs. Our passion was there, but the time commitment was not possible.”

If you do decide to hire staff, many of the steps involved are similar to the steps described in the section to gathering your board members: 

  1. Define Success and Build a Job Description
  2. Find Candidates
  3. Screening and Selection
  4. Orientation

The major difference is that your staff will be paid whereas your board members are typically not. Because of this, there are some extra steps that will need to take place. Here they are:

  1. Determine how much you can spend on salaries
  2. Determine whether your staff will be contract work or salaried
  3. Decide what types of benefits you can offer employees. Here is a full overview of benefits you may offer for your staff.
  4. Create a formalized performance review process. Here is a free template you can use.
  5. Register for all necessary programs with your State, including setting up Worker’s Compensation, Unemployment Insurance, and determining if employees are eligible to work in the US. Here are some helpful resources to help you with this step:

One last tip is to take your time. Many nonprofits are anxious to find someone right away, only to wish they had spent more time finding the right person down the road. My advice is to start the recruitment process early, and don’t settle for something that’s “good enough”. Your new nonprofit needs the best chance at success it can get, so you need someone who will be a rockstar.

 

Part 4) Choosing Nonprofit Software and Building your Website

How to start a nonprofit

In this section on how to start a nonprofit I'm going to cover how to choose the right software for your organization and everything you need to know about building a complete nonprofit website that will grow your organization for you.

 

How To Use Software To Run Your Organization For You

Most nonprofits reach a tipping point with the way their organization operates within their first few years — the systems and processes they originally set up don’t scale as the organization grows. Unfortunately, if you’re unable to make a drastic switch in how your organization operates, you may be closing your doors.

This happened to one nonprofit I know of, a Lawyer’s Association. At the time, the organization had reached about 300 members, but as they continued to grow, so did the administrative work (processing payments, coordinating events, data management, etc.). Unfortunately they didn't have the budget to hire any new staff, so the current admin found himself overworked to the point that events became half planned, the monthly newsletter was dropped, and no one was seeking out new sponsors.

Fortunately, the association was able to break out of the conundrum they were in, and they're now growing well (currently past 700 members). How did they do it? Using software.

Just like that Lawyer's Association, it’s possible to use software like an army of robots (inexpensively) to do all the administrative work for your organization so you can focus on the activities that will actually create more member value and help you grow. You can set up software to automatically:

  • Allow members to join your organization and pay online
  • Register attendees for events and accept online payments
  • Collect donations online and send them to your bank account (or PayPal)
  • Manage a database of members, volunteers, donors, and sponsors
  • Update your website and email your contacts with ease

The list goes on and on. When most nonprofits reach their tipping point, they take one of two paths with software. They either:

  1. Use multiple software programs to handle separate administrative tasks
  2. Use all-in-one nonprofit software called membership management software to handle all administrative tasks

In the next section on how to start a nonprofit, I’ll cover why nonprofits choose one option over the other.

 

Option 1: Multiple Software Programs

In this option, nonprofits choose separate softwares to run separate administrative functions. For example, they get a finance software to help with finances, an event software to help process registrations and payments, and an email software to send out newsletters, etc.

If you’re considering using multiple software programs to manage your nonprofit, here are some of the advantages and disadvantages of doing so, along with two types of nonprofits that typically take this route.

Advantages:

  • Freedom to choose or switch software whenever you like.
  • Many softwares offer a free version for low-usage customers.
  • Only use and pay for what you need.

Disadvantages:

  • You will have to learn how to use and teach others how to use multiple systems.
  • No integration between platforms, so you will have to copy and paste data between systems.
  • May end up more expensive in the long run as each software will require pay upgrades as you use them more.

The two types of nonprofits that typically prefer multiple software programs are:

1) Nonprofits with very limited software budgets (<$500/year)

In this scenario, the staff at the nonprofit will start off completing all processes by hand. As the nonprofit’s budget grows, so does the amount of software they are able to purchase. 

2) Nonprofits with highly technical staff

If you’ve got a “techie” on hand, they likely have the expertise and sometimes a preference to learn multiple systems. Some techies even like to write their own code to help automate tasks like scheduled email reminders. If you do have a techie on hand, one thing to consider is a transition plan in case that person leaves your organization. I’ve heard a few stories where a nonprofit is left high and dry after no one in the organization knew how to take over the highly-customized processes setup by a past techie.

Regardless of your reason to choose separate softwares to run your organization, here are some common programs I’ve seen nonprofits use:


How to start a nonprofit  gmail

Email your contacts, members, and donors

Gmail: Free, paid for upgraded plan

  • Gmail gives you basic email service. Once you grow past 100 members, you may find that Gmail becomes more trouble than it’s worth to send customized messages to large groups of people and you may consider upgrading your service to another email provider like MailChimp (paid).

Accept and process donations online

donor perfect how to start a nonprofit

DonorPerfect: Paid

  • This is a comprehensive online donation processing software.
microsoft word online how to start a nonprofit

Create nonprofit policies, documents, and files

Microsoft Word Online: Free

  • Word offers document writing and editing on the cloud. You will need a Live account to use Microsoft Word Online. Another option is to use Google Docs for a more basic platform.

microsoft excel online how to start a nonprofit Create and manage a contact database and keep track of budgets and finances

Microsoft Excel Online: Free

  • Excel is great for building a basic contact database and financial management. You can also use Google Sheets for a more basic platform. However, once you grow past 250 members, Excel and Sheets will become more trouble than they’re worth (even though they’re free) and you may want to explore membership management software.

eventbrite how to start a nonprofit Create and manage online event pages and registration

Eventbrite: Free for free events, paid for paid events

  • One of the most popular options for online event management.

quickbooks how to start a nonprofit Online accounting and financial management

Quickbooks: Paid

  • An easy way to do all of your basic accounting and financial management.

wordpress nonprofitCreate and update your nonprofit’s website

Wordpress: Free for basic, paid for upgraded accounts

paypal nonprofit

Accept online transactions for membership, events, donations, and sales

PayPal: Paid

  • A basic online system for collecting member dues, donations, and event payments.

One word of caution: if you choose to go with multiple software options,t be sure to evaluate the total cost of all the different systems you use. As your nonprofit grows in membership and transactions, you may be required to upgrade your payment plan for each individual software.

 

Option 2: All-in-one Nonprofit Software - "Membership Management Software"

All-in-one nonprofit software is called membership software, association management software, or membership management software. Just to be upfront, Wild Apricot is a provider of membership management software (the most popular too!). We regularly help new nonprofits attract, engage, and retain members in order to grow.

steps to start a nonprofit

If you’re unfamiliar with membership management software, think of it as a one-stop shop that can handle all the administrative tasks in all areas of your organization. You won’t need to purchase any additional softwares. Membership management software enables you to:

  • Create and manage a contact database including members, donors, and sponsors.
  • Create and manage online event registration and payment
  • Accept and manage online donations
  • Create and easily update a membership website for your nonprofit
  • Allow new members to join your organization through your website
  • Automatically create financial reports
  • and more. 

Here are some advantages and disadvantages that come with using an all-in-one system.

Advantages

  • Integration between functions (the events module integrates with the database module, etc.) means that you save time and don't have to switch back and forth between systems.
  • Lower costs in the long run as you’re only paying for one system. You also only have to learn one system.
  • The software is setup for nonprofits to hit the ground running and caters specifically to nonprofit needs.

Disadvantages

  • It’s hard to get highly customized, advanced functionality if your nonprofit has very specific needs.
  • It’s hard to switch software providers since all your data is stored in one database.
  • It doesn’t integrate well with other softwares if you do choose to buy other software.

If you’re thinking of choosing membership management software to run your organization, here are five considerations to help you decide which provider to go with:

Price Structure

  • As your contacts, members, and transactions increase, so does the cost of membership management software. Be sure you’re comfortable with the pricing structure of the software you choose. If you’d like to get a good feel for what membership management software might cost you, I encourage you to check out Wild Apricot’s pricing structure.

Integration with Other Systems

  • Many nonprofits who choose membership management software still prefer to build their website on Wordpress, or send their emails through MailChimp. It all depends on your preferences. If you choose to do this, research whether the membership management software provider you go with offers integration with that software. Wild Apricot for instance integrates with Wordpress and Quickbooks.

Support

  • Some providers offer free support, while others offer paid support. Most nonprofits need some help setting up their database and membership levels at the start with their chosen provider. If you are very tech-savvy, you may not care about needing support, but if not, be aware of how much support might cost you. Wild Apricot offers free, unlimited support.

Setup Fees

  • Some providers charge setup fees, while others don’t have setup fees. Be sure you know if your software does before choosing. Wild Apricot does not charge setup fees, and even has Coaches who can help you get setup right away for free.

Ease of Use

  • Some systems are more complex than others. Before you choose your software, see if you can give it a test drive. Wild Apricot offers a 30 day free trial to help you get comfortable with how the system works before you upgrade.

Whichever you choose — multiple software, or membership management software, there’s no doubt that software can drastically change the output of your organization. In fact, here’s the story of how one nonprofit tripled their members by using membership management software.

 

How to Get Free or Discounted Nonprofit Software

Before you purchase software for your nonprofit, make sure that you investigate whether you may be able to get it free or even at a discount. Here are four ways to do that:

  1. Contact TechSoup, an organization that distributes software to nonprofits for free or a discount.
  2. Browse this list of 199 free or cheap software tools for nonprofits.
  3. Contact the software provider’s sales staff. Often companies provide a discount for registered 501(c)(3) nonprofits.
  4. If you are thinking of using membership management software, there are some options for free. Here’s a great list of options from membership software analysis site Capterra (we’re at the top since you can use a limited version of Wild Apricot completely free).

Once you have your new nonprofit software setup. The next step is to start creating a presence for your organization to start attracting members. The best and easiest way to do that is to start with your website. In the next section on how to start a nonprofit I’ll cover how to get your website to grow your organization for you and what fundamentals you’ll need to include for it to be complete.

 

How to Build a Website That Grows Your Organization For You

I joined the writing association I’m part of without ever speaking to anyone from that organization. I simply typed “local writing association” into Google and clicked one of the first results. About fifteen minutes later, I had paid for a yearly membership.

Just like my writing association, setting up a website with a good understanding of what potential members and donors want can help you grow quickly by attracting members right from the internet.

 

What Potential Members Want

Potential members want three main things:

  1. They want to know you have a thriving, engaged community. Research shows the number one reason anyone joins an association is because they want the opportunity to network with like-minded individuals. If you can prove this on your website, there’s a great chance someone will join online. You can showcase this by doing the following:
    • Including pictures of members and events
    • Member testimonials and quotes about the value your organization offers
    • Information about upcoming events
  2. The second most important thing potential members want is access to specialized information, or educational content. You can attract new members on your website by publishing industry reports, educational webinars, or creating a members’ only section with restricted access to valuable resources.
  3. The third thing potential members want is instant access and an easy way to join and pay for things online. Why? Online shopping and same day delivery has made people expect instant gratification from the organizations they interact with. I’ve seen nonprofits fall behind, because they require all new members to download a PDF form, print it out, physically fill it out, and then mail it in — a process that can take a whole week. On the other hand, I’ve also seen organizations who’ve modernized this process by allowing new members to join online. The result? An instant increase in members and event registrations (here’s the story of a ski club that sold out in record time after accepting online payments).

  

What Potential Donors Want

Potential donors also want three things. And the nonprofits I’ve seen focus on these things have been successful in growing their online donations. Overall, potential donors want:

  1. To know your organization’s mission. This lets potential donors know why you exist and why they should give to your organization. In fact, this information is the most important thing potential donors want to know before donating.
  2. To know where their donations are going. Research shows the number two thing potential donors need before making a donation is to feel comfortable about where their donation is going. Including explicit information on the breakdown of what happens to a donation can help increase donations.
  3. The last thing every online donor wants is similar to what members want — an easy way to donate. Nothing is more frustrating than multiple steps, downloadable forms, or complicated processes. A simple donation button, or form with instant online payments is best. If you’re looking for tips to make your own donation page, I’ve written a full guide here.

If you craft your website with the right information and allow online registration and donations, your website will start to grow your organization for you. This is a concept we talk a lot about at Wild Apricot, because we've seen how drastic the results can be if done right. If you’d like to learn more on how to do this, we have a free webinar called, Turn Your Website Into a Membership Growth Engine, which covers: 

  • Three website changes that will start attracting new members right away
  • How to get anyone on your board to easily make updates by themselves (even if they don’t have any tech experience)
  • The top website features our most successful clients use to drive membership growth

In the next section on how to start a nonprofit, I'll cover the rest of the pages your website needs to be complete.

 

What Pages your Nonprofit Website Needs to Be Complete

Now that you have an understanding of what people want, the next thing to do is to build out your website.

From studying hundreds of nonprofit websites, here are the most common pages I’ve seen:

Homepage

  • Think of this page as a one-page pitch to get someone to join your organization or donate (so include buttons to join or donate). Besides that, many nonprofits include recent news, featured members, upcoming events, and lots of pictures.
  • Here’s an example of a great Homepage from Livestrong.

About Us

Join Us

  • This page has all the information about what a new member might need to know before joining your organization as well as the online form to join.
  • Here is a great example of a Join Us page from the Kapolei Chamber of Commerce.

Donate

Events

  • The best way to make this page is to simply host a calendar of upcoming events where people can register. It’s also a good idea to list some benefits of joining one of your organization's events.
  • Here is an example of a simple event calendar from the Wayne County Chamber of Commerce.

News/Blog

  • This is the area for you to post important updates about your organization. 

Resources (if applicable)

  • If part of the value your organization creates is from publishing resources, this is the place to host them.
  • Here is an example of a good resources page of publications from the Medical Library Association.

Member-Only Area (if applicable)

  • This is where you give restricted access to resources intended for members only.

Contact Us

  • This page includes basic contact information for your organization.

While these are the most common pages for nonprofit websites (and most websites admittedly), whatever pages you decide to publish, having an organized structure will allow website visitors to find information faster, and can even boost your search engine optimization results. Here are some more tips on how to organize your website.

One more point is to make your nonprofit website accessible to all visitors, including those with disabilities. Air-Rallies, a global web accessibility awareness and skills development program gives some tips on how to make a website accessible to all:

  • Videos have captioned text, so that those with hearing impairments can still get the message you are trying to communicate.
  • All links use descriptive text; instead of “click here”, you say “Here is a list of our staff,” for instance.
    Within the HTML for a web page, all photos and graphics have “alt” tags, allowing someone with a sight impairment to hear, via their screen reader, what graphics and photos are on a page.
  • All text that is within a graphic is also represented as text somewhere on the page; for instance, the name of the organization may be a part of the logo, but it should also be found as text on the page, so someone with a sight-impairment can find the name of your organization.
  • There is not a need for a mouse in order to navigate web site or online feature.

For more tips and details, visit Air-Rallies.org.

And if you find creating your own nonprofit’s website is overwhelming, you have a few options:

  • Build your website using nonprofit membership management software, which is an easy-to-use, drag-and-drop system, ready with all the pages and templates your organization will need (including membership forms, event calendars, member only areas, and more)
  • Create your website with WordPress and use plugins for all the membership-related modules (like membership forms) you’ll need
  • Hire a freelancer to build a website to your liking.

Once your website is setup, you’ll have a base to start building your online presence and attracting new members and donors. The next step on how to start a nonprofit is to setup your social media channels to increase your organization's awareness.

 

Which Social Media Channels You’ll Need to Setup

Below is a screenshot of the Google results when I searched “Livestrong Foundation”. Notice how many of the top results are actually Livestrong’s social media profiles? 

how to start a nonprofit social media

That's because Google treats social media profiles with high importance when determining what to show in their rankings. If you take the time to setup social media profiles for your organization, you’ll be able to see the same result, which can instantly increase awareness of your nonprofit on Google when you’re first starting out. 

On top of this, the rise of the internet and smartphones has actually decreased people’s attention spans, making it harder for nonprofits to stand out and get their your message across. This means that your organization must have multiple presences across different social media channels. People check Facebook 14 times a day, and if you’re organization doesn’t come up in their feed, they’re not going to think of you.

There are three social media platforms that I recommend you setup first for your nonprofit: Facebook, Twitter, and Linkedin. These social media platforms are some of the biggest and also relatively easy to setup and maintain. Here are three step-by-step guides to help you create your social profiles.

Once your social profiles are setup and your website is ready to go, it’s finally time to start attracting members.

 

Part 5) How to Get Your First Paying Members

how to start a nonprofit

At this point, everything for your organization is setup:

  • You've created a business plan
  • You’ve got strategies in place to start generating revenue
  • You’ve registered your nonprofit
  • You’ve hired your board and staff
  • You’ve setup your website and social profiles

And while completing all of that is a lot of hard work, going through the process of trying to attract your first paying members will put your nonprofit through the gauntlet. This is the real test to see if your organization will create enough value in your community.

So, if I asked you to recruit 100 members for your organization by the end of the month, would you be able to do it?

A lot of the time, when I ask this question, I get responses like, “I’ll need a bigger budget,” or “I’ll need more time to come up with a full marketing strategy.”

But, I know many new nonprofits who have gained a hundred members or more in under a month with a little creativity and a good understanding of their target market. While I definitely recommend planning out a full marketing strategy and budget to attract new members, in the early days you won’t have a good understanding of which tactics will or will not work so you’ll need to get creative, try new things, and move on quickly when something isn’t working. 

Take for example, Sarah Rintamaki, the Founder of Connecting for Kids faced a similar challenge. When her son was diagnosed with a rare genetic disorder, she started a nonprofit to support the educational and emotional needs of other parents like her. At first, Sarah tried and tested a number of tactics to attract members, and some of them worked alright, but she stumbled upon one tactic above all others got the attention of every parent in the city. And the best part was it cost virtually nothing.

Sarah spoke with the principals of every public school in her region, and got permission to send informational flyers home in the backpacks of every child. It seemed to work right away and in just three years, her flyer strategy had been crucial to gaining 700 new members for her organization. This spike in new members also led to revenue growth from just $14,000 a year to over $100,000 a year.

Just like Sarah, it’s important to brainstorm, get creative, and try new things quickly. To help you get the wheels turning, here are a number of tactics that nonprofits often find successful in attracting new members to their organizations.

  • Email everyone you know and ask them to become a member, and ask them to pass the message on to all their contacts.
  • Host an open house networking event and invite everyone you know.
  • Publish industry resources online and drive website visitors to them through blog posts, emails, social media, speaking events, and news publications. In fact, this is the strategy used by a growing nonprofit run by Dr. Samuel Dryer. Every year he publishes an industry salary survey which people must become members to access. In just four years, this tactic grew his organization from 12 members to over 500.
  • Connect with similar organizations in different cities to ask how they attract new members.
  • Work with a Public Relations agency to get into local newspapers, radio stations, and breakfast television shows.
  • Join established communities where your target market is (like Facebook or LinkedIn Groups, Meetups, or similar events) and notify them there.

I’ve also heard of a number of low-cost, highly creative ways to get the word out, including:

  • Leaving informational bookmarks at your local library’s check-out desk.
  • Placing coloured stickers on new members’ watches to remind them to tell their friends about your organization.
  • Sending care-packages to your local radio hosts to get them to mention your organization on the radio.
  • If you’re still stumped on where to start, here are 100 more ideas from ClubRunner.

Whatever tactics you start with, the most important thing to remember is to adjust quickly. As soon as you are able to get even one member to join, interview them to discover where they found out about you and what was their main reason for joining. Then do more of those activities that attracted them in the first place.

 

One Final Step To Get Every New Member To Stay (Forever… Hopefully!)

One of the biggest complaints I hear from new members of nonprofits is the organization they joined doesn't care about them.

This happened to me. I joined two writing associations at the same time. One got in touch with me right away, gave me a tour of their website, and invited me to an upcoming event. The second, a much smaller association, took two weeks before their first response. They didn't give me a tour, they didn't invite me to any events. They expected me to find everything I needed on my own. I ended up cancelling my membership with the second organization, because I didn't feel like they cared if I was part of their organization.

The problem is that some nonprofits can't keep up with engaging current members and giving new members the personal connection needed to build a lasting relationship.

This is where larger organizations are stepping in. They're building relationships with new members by using software that aggregates data to deliver personalized experiences to every member. So, if your nonprofit doesn't create a great first impression with every new member right away, another organization could be stealing them away.

Fortunately, it's fairly simple to do this too with what's called an onboarding process.

An onboarding process, sometimes called a welcome stream, is a series of personalized touch-points (most nonprofits use email and welcome kits) that welcome a new member to your nonprofit and direct them to helpful resources, events, and contacts at your organization.  The ability to personalize an onboarding process and further communications at scale (even to thousands of members) is how large organizations build loyalty with their members. To keep up with them, you must do the same.

The easiest way to setup a new member onboarding is through a series of automated emails that get sent out as soon as a new member registers online. Most email software or membership management software can do this with the ability to personalize each message automatically.

When creating your onboarding emails, here are some tips to follow:

  • Thank your new member for joining.
  • Positively reinforce their decision to join by talking about the amazing benefits of your organization.
  • Add social proof to further reinforce their decision to join. Ex. “You’ve just joined a community of 200 other dedicated individuals.”
  • Point them to useful resources on your website.
  • Include a personal touch from the Founder, President, or another key contact in your organization.
  • Give them the contact information of someone they can get in touch with if they need to.
  • Invite them to look at your online event calendar and register for an upcoming event.

If you’d like an example of a great first welcome email, here’s the one that we actually use at WIld Apricot for every new customer we get.

After your onboarding emails are sent, make sure to follow up with new members by email or phone to make sure they’re happy about their decision to join and they’re finding everything they need.

It’s your initial impression with every new member that will set the mood for the rest of their experience with your organization. If you set a great first impression with a  robust onboarding process, you can be sure they'll stay members for a long time. I detail this out in the video below.

 

 

An Awesome Place to Find Support for your Nonprofit

If you’ve gone through every section in this guide, I'd like to personally thank you for taking the time to read it and congratulate you on your decision to start a nonprofit. While the road to starting a nonprofit and gaining members is difficult, you’ll quickly discover how supportive the nonprofit community is. If you haven't done so already, I recommend joining a community of other nonprofit professionals who can share their tips, insights and strategies to help you grow. 

We’ve created such a group filled with thousands of other nonprofit professionals, called the Wild Apricot Membership Tribe. You can find us on Facebook and it’s completely free to join.

how to start a nonprofit facebook group

I hope to see you in the group!

Now, there’s just one last thing I wanted to share in this guide:

 

The Best Advice I’ve Heard About Starting a Nonprofit

“People plan and God laughs,” says Anne Desrosiers, founder of The World Is Your Oyster (TWIYO), a student development nonprofit. Even with a Masters in Nonprofit Management, she had no idea what she was in for.

She devoted two full years to planning everything perfectly: incorporating, gathering her board, establishing partnerships and raising funds. She even got a Masters in Nonprofit Management. Everything seemed ready to go, but, on the day of her launch not a single student showed up.

Anne discovered what many others who start a nonprofit do: unpredictable challenges can derail even the most careful of plans.

Fortunately Anne was determined to get her nonprofit off the ground, but it took another year before she could successfully launch her first program for students. During that time she learned a valuable lesson that has been the main driver of her success to this day:

Network and never stop sharing the good, bad, and ugly. 

“When I wanted to quit, I shared that sentiment with a few people who supported me from the beginning. It wasn’t the greatest thing to talk about, but you have to share and communicate with your network to get support, tough love, encouragement, and ideas to move forward.”

During the next year Anne cultivated a network of supporters who introduced her to the opportunities that eventually led to the success of her nonprofit. Now, six years later TWIYO is still going strong, building up student leaders in Brooklyn New York.

Even with a robust plan in place, just like Anne discovered, the next best thing you can do to make your nonprofit a success is to build a network of support around you (don't forget to join our Wild Apricot Membership Tribe on Facebook).

 

Best of Luck!

I hope this comprehensive guide has given you all the understanding, tools, and resources to start a nonprofit and become successful in today’s world. Best of luck!

 

Additional Resources:

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Terry Ibele [Learning Apricot]

Posted by Terry Ibele [Learning Apricot]

Published Wednesday, 24 May 2017 at 3:47 PM

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Comments

  • Sheldon Koufman said:

    Friday, 26 May 2017 at 2:40 PM
    Thanks Mr. Ibele for this great resource! I will bring it to my non-profit board and try to use some of your tips and tricks.
  • Justin said:

    Friday, 02 June 2017 at 11:14 AM
    Your ongoing compliance section left out a key detail. Even if gross receipts are within a qualifying range of a 990-N, if the nonprofit's total asset value is high enough, a 990-EZ or Long Form would be required. You also didn't touch on charitable solicitations registration, which is a registration/renewal requirement over 40 states. Without filing charitable solicitations, a nonprofit cannot solicit donations within that state, or else it can face penalties.
  • Steve said:

    Friday, 02 June 2017 at 11:35 AM
    May I suggest blogs from 50c3.org for additional resources, along with their services to help with the application process: https://www.501c3.org/blog/
  • Terry Ibele [Learning Apricot]

    Terry Ibele [Learning Apricot] said:

    Monday, 05 June 2017 at 11:12 AM
    Good points, Justin. Thanks for mentioning. I'll update the 990-N section. I did include a section on Charitable Solicitations under "Private Revenue" explained, but I'll include it in the section to incorporate too.
  • Terry Ibele [Learning Apricot]

    Terry Ibele [Learning Apricot] said:

    Monday, 05 June 2017 at 11:22 AM
    Hi Steve, definitely. Added your blog under additional resources. Thanks.
  • Justin said:

    Wednesday, 07 June 2017 at 10:39 AM
    Charitable Solicitations would be a better fit under the "Ongoing Compliance" section, as most states don't allow nonprofit to file until they are already incorporated, or sometimes, not even until they have 501c3 status. It all depends on the state.
  • Terry Ibele [Learning Apricot]

    Terry Ibele [Learning Apricot] said:

    Wednesday, 07 June 2017 at 10:45 AM
    Justin, good point, and you're right, it does depend State to State. I made the move.

    P.S. thanks for taking a thorough look!
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