This is the third in a series of articles on nonprofit organizations. Many businesses could qualify for and benefit from nonprofit status – but don’t realize the range of options available under the law. My aim is to share with you the research I’ve conducted concerning nonprofit organization. This is not legal advice, nor is it a substitute for legal advice.

We’ve looked at developing the vision for your nonprofit, and we’ve considered the various possible IRS-approved categories a nonprofit can be organized under. In this article, let’s bring it all together and do something that may prompt the first inner realization that your dream is not only possible… but first, an overview.

Something Many People Don’t Realize About Nonprofits

My own “aha moment” came years ago when a friend pointed out a news story about a nonprofit organization that had come under fire for being too picky about who they would serve. Not only was this nonprofit investing in real estate and offering vacations in exchange for donations, but it was being criticized for focusing on a rather narrow group of children and their families in order to promote a specific religious view.

But here’s the kicker:

While all of that sounded a bit outrageous to me, the bottom line (as I soon came to discover) is that their conduct was absolutely legal and within the bounds of nonprofit regulations. Despite the attack from those in opposition to their chosen audience and their marketing methods, that organization is still going strong today.

You see, contrary to what many people think, nonprofits don’t have to benefit only poor people and they don’t have to cater to everyone. I don’t know about you, but that fact stirs up a boatload of ideas for me.

Don’t misinterpret what I’m saying; I think soup kitchens and homeless shelters are absolutely grand endeavors and their founders are to be applauded. But nonprofits can do a whole lot more.

How about organizations aimed at cleaning up trails and streams, for instance? That would be “good work” too. Or maybe an association of entrepreneurs who band together to help one another succeed?

Either of those could easily be organized as a nonprofit.

Benefits of Nonprofit Organizations

Before we go on to take a giant step towards making your nonprofit idea a reality, let’s look at some of the benefits you could potentially realize by deciding to go the nonprofit route for your startup.

  • Nonprofits can qualify for tax-exempt status: This may be the most compelling reason for forming as a nonprofit. Imagine being able to operate on funds exempt from much of the tax code.
  • Nonprofits can receive grants and donations: There are plenty of people who have money and property to donate to worthy causes. When that cause is a properly organized and qualified nonprofit, the donor can receive tax breaks for chipping in and helping out. It’s a true win-win situation.
  • Nonprofits offer financial liability protection to founders, directors, and employees: Assuming no irresponsibility or illegal activity, if a nonprofit is sued, those harmed can only go after the assets of the nonprofit – they can’t pursue the assets of the people associated with the organization. Of course, this is an area where legal advice would be essential, and chances are your nonprofit would never be faced with that situation. Yet, that layer of protection is a benefit of nonprofit organizations.
  • Nonprofits foster teamwork: The feeling that this is “our organization” typically flourishes much more readily in the organizational culture of a nonprofit that in a for-profit business. Nonprofit work brings people together for a common cause. It’s easy to be proud of your efforts to really make a positive difference in the world.
  • Nonprofits create jobs: New business is a primary catalyst for economic growth. When you launch your nonprofit and bring on others to help you in the endeavor, you are instrumental in providing jobs – not just any jobs, mind you, but jobs that are worth doing because the work is aimed at filling a real need that begs to be addressed.

Entrepreneurs who devote their energies to helping solve problems that might not otherwise be addressed in an affordable or practical way are heroes in my book.

If you’ve a vision for something, and it can fit into one of the categories we covered in the previous article, nonprofit status may be the perfect organizational tool for building that dream.

New business creates jobs
Source: https://www.census.gov/ces/pdf/BDS_StatBrief7_Creation_Churning_Wages.pdf

Name Your Nonprofit and Watch it Take Form

Parents will understand this well. Once you being thinking of names for your baby, reality quickly sets in. And once the name is set, you can almost hold that baby in your arms. There’s a name attached to soft, precious clothing you start to accumulate. You begin talking about the baby’s future and getting everything prepared to welcome the new child into your life.

In a way, that’s how it is with your business idea. You’ve outlined your vision, you’ve considered organization structure – why not go ahead and start thinking about the name?

Once you’ve titled your new business, you’ll have taken a giant step towards seeing it happen.

Here are some suggestions to help with the process:

  • Get plenty of people involved: After all, you’re going to need help with your business. Why not go ahead and start generating excitement? You’re likely to find there are many other folks who would love to join in the vision and help it get launched.
  • Start a list: Go ahead and brainstorm away. Write down every idea. Allow yourself to think outrageously. There are times when something initially sounds far fetched, but turns out to be not so far “out there” after all.
  • Select the top contenders: Whether you choose the list of potentials or ask others to help you (the preferred method), determine which five or so names are most appropriate and appealing.
  • Check with the office that regulates business in the state where the business will be registered to make sure the names are available. Remove from your list any names that are already taken or are too close to existing names for comfort.
  • Check domain names to make sure acceptable URLs are available. Check social sites as well. There are several tools available online for both of those tasks. My favorites are WiserSites and Knowem. You don’t have to pay anything for the search. It’s easy to conduct on your own. Check this article on how to find a domain name for your business: 10 Tips.
  • Further trim the list to reflect your findings, gather your supporters, and choose the name. Throw a party! Something new is about to be born.

How to Start a Nonprofit Organization – Who are You?

Are you feeling a little more excited about your nonprofit idea right now? I hope so.

You can organize a nonprofit to accomplish just about any worthwhile purpose. Life is shorter than we think… so why not use our time on Earth to direct our passions towards something we really care about?

I’m reminded of the story about the Englishman who wanted to be a poet. He took a job on a ranch in Australia and saved his money. When he retired, he moved back to England and sat down to write. Then he had a heart attack and died.

Sad story? You bet. Let’s not let that happen to us.

We can start on our dreams right now, today.

Here’s something important to remember: Together, we can accomplish a whole lot more than any of us could ever do alone.

Let’s do this thing!