How do you start a non-profit organization?

The process you use to form a not-for profit organization also known as an organization without share capital will depend upon the rules and regulations in effect where you reside.

The links accompanying this hub will help those who live in the United States or Canada get the formalities rolling.

However, before you start reading the legal jargon or filling our forms, I want to share the experience I have gained through setting up not-for-profits organizations over a 25 years span.

The first and perhaps most important step is to have a clear understanding of why you want to create a not-for-profit. Are you planning to champion a cause, poverty, the environment, violence or another issue that is dear to yoru heart?

Or are you planning to create a charity to raise funds for a good cause?

There is a legal difference between an organization that raises funds for good works and an organization that advocates for political justice.

So why do you want to create this organization? If you plan to raise funds you will want to register as a charity so that you can give tax receipts to the donors, but if you also do political work you may not be allowed to register as a charity. Find out what the rules are where you live. A trip to the public library can help.

You are going to need to develop a mission statement and your ability to articulate why you want to set up the organization in the first place will go along way to getting that done. The mission statement is a brief statement of the purpose of your organization.

This next step is the one I believe is the most important unlike a for profit business an individual cannot setup a not for profit organization. Once again depending upon the rules in place where you live you will need from three to five people including you.

This group will at first be the organization’s steering committee; the people who guide the not for profit through the process from dream to reality. They may also become the agency’s first board members or will help recruit board members.

Once you have the reason worked out why you want to create a not for profit look for people who will share this interest and have a degree of passion for the project.

Passion is important because in the early stages no one is getting paid.

The development of a not for profit is not an overnight activity and it is well worth it to take the time to find people you can and want to work with as it will save you heartache and disappointment down the road.

If you already have your members then you are well on your way.

Once you have the steering committee in place you can work on your mission statement. From the mission statement will flow the organization’s goals and objectives.

You will also need a set of bylaws to govern the agency. The bylaws set out the roles and responsibilities of the Board of Directors, how frequent meetings of the Board take palce and other operational issues.

This is the point were a lawyer comes in handy, especially if you are going for charitable status but regardless of that, you want to get the wording correct and be sure that you have dotted all the Is and crossed all the Ts.

If you think about the not for profit incorporation process as being similar to preparing a business plan you will be in the right head space to bring it all together.

Are you planning to be an employee of this organization; in other words are you doing the work to create a job for yourself? If the answer is yes consider setting up a company to do the same thing.

Why? A not for profit is governed by a Board of Directors who do the staffing, especially in the beginning. You cannot sit on the Board and apply for a job at the same time.

This brings us back to the purpose of setting up a not for profit, the why. I have worked and am working with people who want to address various issues, in some case a not for profit was necessary, but in others, there was little need for the formal organization.

Then, if you still want to proceed find out the rules and regulations governing the start up and registration of a corporation without share capital or a not for profit; now proceed one step at a time.