Starting a business is one of the most courageous and impactful things you can do. If you are considering starting a nonprofit organization, we get it! SEED SPOT is a 501c(3) and since our founding back in 2012, we have learned a ton about what it takes to thrive as a nonprofit entity. Here are a few tips that might help you in your nonprofit journey.
- Expect a long, long, long wait for your 501c3 designation from the IRS. When you are just starting out, you can get a fiscal sponsor so that you can begin operations immediately. But when working with the IRS, it can take up to a year or more in some cases to officially receive your determination letter. Don’t stress! From 2012 to 2014, SEED SPOT operated under the fiscal sponsorship of a community foundation. This enables donors to still receive tax receipts for their contributions while you wait for your official IRS designation.
- Find an accountant and and auditor that specialize in nonprofits and is up to date on the latest laws. There are very specific rules and regulations surrounding the way that nonprofits have to file their taxes, track their philanthropic and earned revenue, and manage their assets. Finding a partner who understands the intricacies
- Build a pro-bono attorney relationship – this will come in handy as you need an extra set of eyes on grant contracts, file trademarks and grow as an organization. Finding an attorney that can bring your organization on as a pro-bono client will truly save you thousands of dollars over the years, and bring you peace of mind as you partner and scale your growth!
- Balance Earned Revenue with Philanthropic Revenue – the most successful nonprofits don’t rely solely on donor dollars for their operations – they know that it is critical to bring in revenue by charging for your services, finding “in-scope” ways to sell or market your products, and to create revenue streams that are not solely donor determined. Even selling “swag” with your logo can be a great way to accomplish this!
- Always, always, ALWAYS ask if there is a nonprofit discount – 99.9% of the time, vendors will knock down their prices for a nonprofit. It never hurts to ask!
- Just because you’re a nonprofit, doesn’t mean you can’t profit – in order to sustain your operations and serve the market you want to reach, you need to make money. Anchoring into the concept of “You need to make money to make an impact” can help you keep your eye on the mission of your organization, while balancing a growth mindset and remaining open to opportunities.
Think you have what it takes to start a nonprofit? We think you do! Join SEED SPOT on November 18th and 19th for a 2-Day Launch Camp surrounded by others who are looking to launch a 501c3 and get the support, mentorship and information to succeed. You’ve got this!