What if you could find a way to “crowd-fund” a project or organization you care about AND be able to receive those funds tax-free?

That’s not a dream, my friend, it’s a present day reality — thanks to the many benefits you could potentially enjoy when you start your own nonprofit organization.

Moreover, once you know the ins and outs of how to set up a nonprofit, you’ll realize something CRUCIAL: Nonprofits aren’t only for Church groups, public charities, and fraternal organizations — your nonprofit can accomplish just about any goal you have, AND it can give others a way to claim a tax benefit for their contributions.

Let’s take a look at some of the primary considerations. Once you get a grip on the fundamentals of anything, and you can be successful at it.

How to Start a Nonprofit Organization – What’s Your Vision?

According to the National Center for Charitable Statistics (NCCC), nonprofits accounted for 5.3% of the gross domestic product (GDP) and paid over 9% of U.S. wages and salaries.

Nonprofits aren’t just big business, though, they can do anything from set up a soup kitchen to operate an after-school homework club.

One thing all nonprofits DO have in common, though, is a well-defined purpose.

To be successful, you must define the need you want to fill. Entrepreneurs know how important “finding your niche” is to ANY business endeavor – whether nonprofit or for-profit.

It’s important thing to remember that the job you want to accomplish can be quite broad or tightly focused.

The main thing is that you KNOW what you want to do and you let others know what you want to do.

Here’s an example of one nonprofit that caused a turmoil by having a seemingly narrow focus, but failing to clearly disclose that purpose in their fundraising.

I present it, not do discredit the organization, but so we can learn a few lessons from their experience.

Kars4Kids – A Quick Case Study

Listen to the radio long in many parts of the country — especially Washington D.C., Detroit, New York, etc. — you’re going to hear the Kars4Kids ad and jingle: “1-8-7-7 Kars4Kids, donate your car today.”

Not only can you give that spare car to “kids,” but you can get a tax deduction and a free vacation voucher for doing it!

Sound good?

So far about half a million folks have thought so. The beautiful thing is that Kars4Kids’ desire to help Jewish kids find out more about the Orthodox faith is neither illegal nor immoral. Your nonprofit doesn’t have to solve every problem or serve every person. It just needs to address a certain issue and be of benefit to some people.

Are the bells going off yet?

The Kars4Kids approach is genius. Think of it: The organization allows people to help kids learn, go to camps, discover new friendships, and a slew of other good things … and the funding for those things is a tax benefit for everyone concerned.

Yes!

And targeting those benefits to the Jewish community is absolutely fine as well. The organization has certainly had its critics, but there’s nothing to stop an organization from another faith – or a secular organization – from doing the same thing.

Vehicles for Change, for instance, takes donated vehicles, fixes them up, then gives them to folks who need a way to get to work, take the kids to school, and such. They even turn the fixing-up part into a training program to help the unemployed or underemployed learn a trade.

Is one organization “better than the other”?

Not in my opinion. They simply serve different segments of the community. If I want my kids to learn about Judaism, I’m giving my donation to Kars4Kids. If I want to help disadvantaged folks from the inner city get on their feet, Vehicles for Change may be my charity of choice.

Either way, I help others and get a tax break for doing it.

Life is good.

Here are three pertinent things to remember:

  1. Be transparent about who or what is helped by the work of your organization
  2. Don’t feel bad about serving the people you’re called to serve – they don’t have to be poor, they just have to benefit from your efforts
  3. Don’t limit your dreams when it comes to nonprofits – you can do just about anything

How to Start a Nonprofit Organization – What’s Your Vision?

This topic is way too important to contain in one article.

Let’s stop here and complete the first step.

What’s your vision? Who will your nonprofit serve?

Put some thought into those questions and write them down!

To get notified when step two is ready to view, sign up here: How to start a nonprofit organization.

I don’t know whether your vision would best be accomplished by a nonprofit or for-profit business… but you don’t know either, until you get clear about what you want to do and write it down.

If you have questions, let me know.

If you have answers, let me know.

Please note: I’m not an attorney, nor am I attempting to offer legal advice. I’m an entrepreneur who wants to start a nonprofit and is working through the steps to accomplish that dream. My aim is simply to share what I find with you. If I’m wrong in my interpretations, please let me know.