If you have a passion for paying it forward, you may find your niche in life by starting a nonprofit organization. Some individuals dream of a life of helping others. If this sounds like you, launching a nonprofit organization may quench your desire for service.

There were over one and a half million nonprofit organizations registered with the Internal Revenue Service in 2015. Each year, nonprofit organizations contribute nearly $1 trillion per year toward improving the lives of others.

The following are seven vital considerations for starting a nonprofit organization in 2020.

  1. Are You Sure That Your Idea Is a Nonprofit?

You may have a great idea that will improve the lives of others. However, you must make an honest assessment of whether your idea is a nonprofit organization – or a for-profit enterprise that practices corporate social responsibility.

It’s common for entrepreneurs to struggle with making this critical decision. Nevertheless, you must establish whether your business idea is a nonprofit or for-profit organization before filing any paperwork with municipal and federal agencies.

According to Faith Knutsen, director of social innovation and entrepreneurship for Ohio University’s online masters of public administration, “Four of the considerations an entrepreneur should keep in mind when considering whether a non-profit is the appropriate model are: (1) Is the concept strongly-mission driven (as opposed to market-driven)? (2) Is the concept likely to appeal to donors and grant funders due to its strong value proposition for the target beneficiaries?

(3) Does the concept fill a gap in mission-driven goods or services that is not filled by others in the market (therefore avoiding stepping on toes in a crowded non-profit space, or creating ‘donor fatigue’ among those already giving to a similar cause)? (4) If this becomes a non-profit, is the mission strong enough to draw significant volunteer labor, a volunteer Board, and/or staff that are likely to be lower-paid than they would be in a for-profit enterprise?”

  1. Is There a Need for Your Proposed Charity?

Also, you must make an honest assessment of whether there is indeed a need for the nonprofit organization that you intend to launch. Along with board members, you must research whether other nonprofit organizations exist that already serve the cause that you intend to support.

If your nonprofit idea addresses an unmet need, you can then work with board members to figure out how to find your market and forecast demand for your services. These assessments are essential steps in the early planning stages of developing a framework for your nonprofit organization because the foundation of it will rest on your ability to demonstrate a real need for philanthropy to potential donors.

Another critical early-stage planning item is determining whether your nonprofit idea qualifies for tax-exempt status according to the law. In most states, a nonprofit organization must conduct charitable, educational, scientific or religious activities to qualify for exempt status.

Each state has different laws regarding nonprofits. You can contact your Department of State to find out the rules and regulations that pertain to your organization.

  1. Did You Choose the Right Board Members for the Job?

If you advocate for any cause, you’ll eventually connect with many individuals who share your passion for doing good and are willing to sit on the board of your nonprofit organization. However, those individuals must understand and accept the fact that the state will make them accountable for legal and fiduciary responsibilities in their role as board members.

According to Knutsen, “A strong nonprofit board is a vital asset and can make or break the success of the enterprise. Optimal board candidates would be dedicated to the enterprise mission, able and willing to volunteer for the nonprofit, above and beyond board meetings, and collectively represent a fairly wide range of skills that will support the nonprofit (e.g. professional or personal experience in law, accounting, human resources, and operations, as well as in the particular mission of the enterprise).”

Resultantly, you must choose your board members carefully. In addition to choosing board members with exceptional character, you’ll also want to select members who can make a meaningful contribution to the business plan and the organization.

“Because the burden of fundraising and volunteerism is often high, a fairly sizable Board is often advisable (perhaps 10-15 people, if possible). Finally: it is very important that Board members be rational, logical individuals capable of expressing clear opinions but also of collaborating even if their opinion does not always ‘win.’ Flexibility is a vital characteristic for success in enterprises driven to achieve a social good,” says Knutsen.

  1. Who Will Be Accountable for Back Office Administration?

Governance encompasses the administration of your nonprofit organization. Individuals will assume many different roles to help your nonprofit organization meet its objectives, such as:

  • Committees
  • Directors
  • Executive directors
  • Members
  • Officers
  • Staff members
  • Volunteers

Although the formation of your nonprofit protects key internal stakeholders from some liability, their activities and conduct will directly impact your organization in so far as public image and legal accountability. Also, in the unfortunate event that an internal stakeholder conducts themselves unethically, their actions can land you and your organization in serious legal trouble.

  1. Do You Know the Type of Nonprofit Organization You’d Like to Launch

Altogether, there are 29 different types of organizations that can qualify for section 501(c) Internal Revenue Code tax exemption. For instance, chambers of commerce, civic organizations and credit unions are just a few of the types of entities that may qualify for nonprofit status.

The most well-known and popular form of 501(c) structure is the 501(c)(3). It’s essential that you know the type of 501(c) corporation that you like to form so that you use appropriate language when you file your articles of incorporation and other essential legal documents.

  1. Have You Established Bylaws for Your Proposed Nonprofit?

The main governing document of your nonprofit organization is the nonprofit bylaws. They are supplemental rules to state legislation that inform how you will run your organization. When you apply for federal tax exemption, you must include your bylaws with your application. If a conflict or disagreement arises, the document will outline how you will resolve any issues.

By forming a nonprofit, you can extend your ability to help others. There are over one and a half million nonprofits that work toward improving the quality of life for those in need.

You can also leverage your nonprofit organization to form a partnership with other groups that do good in the community. By forming a nonprofit organization, you can increase your group’s influence as well as awareness about a cause that’s near to your heart.