Starting a Charity: Expectations vs. Reality

Got a great idea for a charity? Maybe you have a friend recently diagnosed with a rare disease, or maybe you’ve seen a need in your community that you are determined to address. In theory, it may not seem like too much work to get behind an issue that really matters to you, but in reality, it’s a bit more complicated than you may think. Having a great idea is only the first step.

For starters, you need to develop your great idea into a mission with some clear, defined goals. Then you need to pick a name for charity. You will want to make sure that no one else is using the name you choose. This is especially true if you plan on incorporating your charity. You’ll want to first check your state’s Secretary of State business records. If your name is available then you may want to submit a request with the state to reserve your name while you start drawing up your charity’s Articles of Incorporation. Once the incorporating documents are filed with the state, then you can submit an application to the IRS to register your charity as a 501(c)(3) tax-exempt nonprofit…. See what I mean? There are many steps that must be taken before you can actually see your vision come to fruition.

But you shouldn’t get discouraged! You can bring your charity to life as long as you take the right steps! Below are some helpful guidelines you may want to consider when starting a charity.

Vision and mission: Formulate your vision- try to define your hope for the future. Then focus on your mission. Your mission statement should be concrete, with a definite purpose and measurable goals.

Name: Pick a name for your charity that is unique and definitively different from others.

Create your founding documents: Possibly with the help of legal counsel, you’ll want to draw up Articles of Incorporation if you plan to incorporate your charity. Then you’ll want to submit your articles of incorporation to the Secretary of State where you would like your charity to be domesticated. You’ll want to create Bylaws for your organization. Once these founding documents are finalized, you can submit your application to the IRS for recognition of tax-exemption as a 501(c)(3) or (4) nonprofit entity.

Develop a strategic plan for your charity

Recruit an efficient Board of Directors: Seek out people who have a background in the work that your charity aims to do, or have experience with nonprofit work or fundraising.

Start a website: This is where you can start to lay out your plan and intentions for your charity.

Register your charity to solicit: Look into any laws that govern solicitation compliance in your state, and in any other state where you plan to ask for donations for your cause. If you plan to have a donation page on your website, you should also make sure to register with any state that requires registration if you solicit online.

Fundraise! You may want to start by reaching out to friends, relatives and community members to support your cause, but you should also plan for some loftier fundraising goals. A basic internet search can help you discover many opportunities to apply for grants from other nonprofits, foundations and government entities. Fundraising takes a lot of time and energy; don’t be surprised if it is what you spend most of your time doing during the beginning stages of your charity.

Begin operations: Once you have a bit of cash flow you can start to do the work! It is crucial that you maximize every dollar spent. Your ultimate goal should be that roughly 80% of your spending goes directly to your charity’s mission. Remember that donors want to give to charities that spend most of their money on their programs and services, not their overhead!

Starting a charity takes lots of work, patience, discipline, and time. It will probably take a lot longer than you think to get up and running before you can actually begin to make an impact with your work. Remember that you can make a difference and change lives if you hold steadfast to your vision and the passion it inspires in yourself and others!

Written by Taylor Goerl