Start a Nonprofit: Fulfill Your Purpose
- Coach Al
- Feb 9
- 9 min read
Updated: Feb 17
You have skills, knowledge, or experience to share, but may not have a purpose in life. Starting a nonprofit is a great way to help others with your expertise. Starting a nonprofit can feel like a big leap, but trust me, it’s totally doable! If you’re passionate about making a difference and want to serve your community, creating a 501(c)(3) nonprofit is a fantastic way to do it. This guide will walk you through everything you need to know, from the types of nonprofits to the nitty-gritty of staffing and board members. Ready to live your God-given purpose? Let’s dive in!
“Everyone has something to offer. If you have skills, knowledge, and experience, then you can solve a problem within your community.”
What Are the Top Common Types of Nonprofits?
Before you jump into starting a nonprofit and the paperwork, it’s important to understand the different types of nonprofits out there. Knowing where your mission fits will help you shape your organization and its goals. Also, be aware that the IRS has rules that govern a public charity’s participation in political activities.
Here are some of the most common types of 501(c) nonprofits:
501(c)(3) Public Charitable Organizations: These are the most common. They focus on supporting people in need through organizations such as youth and adult mentoring programs, food pantries, and shelters.
501(c)(3) Private Foundation: Usually funded primarily by one person, family, or company. These tend to make grants rather than run big programs. An example is the Bill & Melinda Gates Foundation (creator of Microsoft).
501(c)(4) Social Welfare Organization: Common for advocacy and community organizing. The IRS has different rules for tax-deductibility and political activity.
501(c)(6) Business League/Association: Chambers of commerce, trade associations.
501(c)(7) Social/Recreational Club: Hobby clubs, social clubs. This option is suitable for groups or friends traveling together who want a formal way to coordinate their efforts. Think travel club.
Educational Organizations: Think tutoring centers, scholarship funds, or museums. Their goal is to educate the public or specific groups.
Prevention of Cruelty to Animals or Children: Animal shelters or child advocacy groups.
If you’re thinking about starting a nonprofit to help families improve their financial health or prevent type 2 diabetes, you might fall under charitable or educational organizations. That’s a great place to be! Coach Al, a certified life coach, also founded and runs a 501(c)(3) Public Charity to help teenagers, young adults, and their parents succeed. He can help you align your values with your talents, passions, and purpose to identify the type of nonprofit that is right for you. He can also assist with policies, board member intake, job descriptions, and operating procedures, because he created them all. Contact Coach Al at https://www.tips4living.org/consulting.
Examples of Causes or Services Offered by Small Nonprofits
Wondering what kinds of causes small nonprofits tackle? The possibilities are endless! Here are some inspiring examples that might spark your own ideas:
Financial Literacy Workshops: Teaching families how to budget, build credit, and save money.
Health and Wellness Programs: Offering exercise classes, nutrition counseling, or diabetes prevention.
Food Pantries and Meal Services: Providing healthy food options to families in need.
Youth Development: Tutoring, life-skills workshops, school-supply drives tied to tutoring support.
Coaching and Mentoring: Helping kids make good decisions and build confidence.
Stress Reduction and Mental Health Support: Hosting mindfulness workshops or support groups.
Community Gardens: Encouraging healthy eating and exercise through gardening.
Each of these services aligns perfectly with helping families improve their financial and health outcomes. Plus, they’re manageable for a small nonprofit to run.
Understanding Nonprofit Departments: What You Need to Run Smoothly
Running a nonprofit is like running a small business, but with a heart. You’ll need different departments or roles to keep things moving. Here’s a quick breakdown of the key departments you should consider:
Fundraising: This team is the lifeblood of your nonprofit. They plan events, write grant proposals, and reach out to donors. Without fundraising, your nonprofit won’t have the resources to operate.
Finance/Accounting: Keeping track of money is crucial. This department manages budgets, payroll (if you have paid staff), and financial reporting to the IRS. If your organization’s revenue is less than $50,000, a public charity can file a simplified electronic Form 990-N annually.
Marketing and Communications: These folks spread the word about your cause. They handle social media, newsletters, press releases, and your website.
Volunteer Management (if applicable): They handle recruiting, screening, training, scheduling, and retention.
Operations: This department manages day-to-day activities, from program delivery to volunteer coordination.
Program Management: If your nonprofit offers services, this team designs and runs those programs.
For a small nonprofit, these departments might be handled by just a few people wearing multiple hats. That’s okay! The key is to stay organized and clear about who does what. Coach Al’s small nonprofit, Sherrod Foundation Inc., is run by unpaid volunteers. No one gets compensation, which simplifies the IRS reporting requirements. Check out their website for an idea of how it is structured, their mission statement, programs, and staffing at Sherrod Foundation - Improving communities by helping children succeed. Coach Al has a specific offering to help you set up your small nonprofit without breaking the bank.
Paid Staff vs. Unpaid Volunteers when Starting a Nonprofit?
Here’s a question I get a lot: Should I hire paid staff or rely on volunteers? The answer depends on your nonprofit’s size, budget, and goals. Let’s weigh the pros and cons.
Paid Staff Advantages
Consistency and Reliability: Clear accountability and time commitment.
Professional Expertise: You can hire people with specific skills, like accounting or marketing.
Accountability: Paid staff have clear job descriptions and performance expectations.
Paid Staff Disadvantages
Cost: Salaries, benefits, and taxes add up. Requires steady revenue (cash-flow stress is real)
Management: You’ll need to handle HR tasks like payroll and employee relations.
IRS Requirements: Additional reporting requirements apply.
Volunteer Staff Advantages
Cost-Effective: Volunteers are free, which is great for tight budgets. Some professionals, such as nurses, may be required to support their communities. This gives you access to a great talent pool at no cost.
Community Engagement: Volunteers often bring passion and local connections.
Flexibility: You can scale volunteer involvement up or down as needed. Volunteers can bring specialized skills (legal, marketing, finance, tutoring)
Volunteer Staff Disadvantages
Inconsistency: Volunteers may have limited availability or varying commitment.
Training Needs: You’ll spend time onboarding and supervising.
Limited Expertise: Volunteers might not have all the skills you need. You can offset this disadvantage by recruiting a professional corporate trainer to fill in the knowledge gap.
For a small nonprofit just starting out, a mix of both is often the best approach. Start with passionate volunteers and add paid staff as your budget grows for those mission-critical assignments.
How Many Board Members Does a Small Nonprofit Need?
Your board of directors is your nonprofit’s backbone. They provide governance, oversight, and strategic direction. But how many board members do you really need?
For a very small nonprofit, 3 to 7 board members is typical. Here’s why:
Too few: You might lack diverse perspectives and struggle with a quorum for meetings.
Too many: It can be hard to coordinate and make decisions efficiently.
Your board should include people with diverse skills, including legal, financial, fundraising, and community connections. Remember, board members are volunteers who care about your mission and want to help you succeed. Keep in mind that the IRS has rules regarding using immediate family members on your board of directors for a 501(c)(3) Public Charity, so review their requirements before being on a board. Tips4Living LLC has all the requirements, documents, and policies you need when starting a nonprofit. Contact them for help at https://www.tips4living.org/consulting.
Ready to Take Action? Your Step-by-Step Plan for Starting a Nonprofit
Alright, you’ve got the basics down. Now, let’s get practical. Here’s a clear, actionable roadmap to start your small 501(c)(3) nonprofit:
Define Your Mission and Vision
Write a clear statement about what your nonprofit will do and why it matters. This will guide every decision you make. List 3 measurable outcomes you want in the first year (examples: “mentor 25 teens,” “place 15 people in jobs”). Start with only one program that you can deliver consistently with your resources. After the first year, learn from your first program and add others as needed.
Choose a Name
Pick a unique name that reflects your mission. Check your state’s business registry to make sure the name you want is available. This is managed in most states by the Secretary of State’s website. You also want to check whether the name is available for your website and social media pages.
Incorporate Your Nonprofit
File articles of incorporation with your state government. This legally creates your nonprofit corporation. You will need this document to open a business checking account.
Apply for an EIN (Employer Identification Number)
Get your free EIN from the IRS. It’s like a Social Security number for your nonprofit.
Draft Bylaws and Policies
Create rules for how your nonprofit will operate, including board roles, meetings, and conflict of interest policies.
Recruit Your Board of Directors
Find committed individuals who share your passion and bring diverse skills. Do not bring on lazy folk looking to pad their resume with your organization’s board position. They must be willing to do the work.
Hold Your First Board Meeting
Approve bylaws, adopt a conflict of interest policy, and set your nonprofit’s fiscal year. Schedule the frequency for board meetings. You should serve as Chairman of the Board during the first term, as you know the mission and what the programs should deliver.
File for 501(c)(3) Tax-Exempt Status
Complete IRS Form 1023 or the streamlined 1023-EZ for small nonprofits. This step can take several months, so be patient. This is a vital step to ensure the donor can claim a tax deduction.
Set Up Financial Systems
Open a bank account, create a budget, and decide how you’ll track donations and expenses. It is vital to never mix your business and personal funds. Never deposit donations into your personal checking account. Remember, no shortcuts here, do it right from the beginning.
Start Fundraising and Marketing
Build your website, create social media profiles, and reach out to your community. Create your fundraising campaigns to get donations quickly.
Launch Your Programs
Begin delivering services that fulfill your mission. Collect email addresses to communicate with potential donors and supporters.
Conduct Monthly Staff Meetings
Monthly reviews and discussions are the only way to stay on top of things. You can do this using video conference calls for flexibility.
Remember, starting a nonprofit is a marathon, not a sprint. Celebrate small wins and keep your eyes on the big picture. You should create a launch plan that outlines all activities and tasks required to start a nonprofit. You should have a mentor, coach, or professional guide you through this launch plan to ensure you are ready to go. This may take 3 to 6 months of preparation, so don’t rush things. Many issues stem from the lack of a well-defined launch plan.
In Conclusion
Starting a nonprofit is one of the most rewarding ways to serve others and create lasting change. A small nonprofit can be started with less than a few hundred dollars. The amount of work you put in is determined by your ambitions and program scope. Many people have full-time jobs while running a small nonprofit. With this guide, you have a clear path forward. So, what are you waiting for? God’s purpose for you is within reach, so step out on faith.
Remember that Coach Al runs a nonprofit and can help you create and implement your launch plan. He already has all the documents you will need and the experience to help you get up and running smoothly. Contact Coach Al at https://www.tips4living.org/consulting.
For more detailed IRS information on tax-exempt status, check out the official IRS 501(c)(3) page.
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What a meaningful way to serve others and have a positive impact on future generations!
The world is hurting more than ever. Fortunately, many people have expertise, skills, knowledge, experience that can help others. Running a nonprofit might be the answer to fixing the American Dream for Gen Z and Gen Alpha.