Advise For Nonprofit Organization

Advice for Nonprofit Organization Startups

If you're seeking advice for nonprofit organization setup, then you've come to the right place. At BDJ Non-Profit Solutions, our goal is to provide the best creative and easiest solutions for each of our clients. We understand that each situation is different. To that end, we design our resources to be accessible and keep the cost down for organizations that are looking into how to set up a nonprofit.


The best advice for nonprofit organization startups is to create a mission statement that establishes the values of the organization. The organization must understand their purpose and have a plan in place to utilize funds to help the community that they plan to serve. Registering an NPO means that you must take the profits from the sales of goods and services, as well as donations and sponsorships, and reinvest them in the organization. Any money generated goes to serve humanitarian efforts, education, research, and anything else that would benefit the organization's community.


To understand how to set up a nonprofit, you also must decide on the legal structure for the organization. While most nonprofits opt to be incorporated, the organization can also become an association or trust. Before forming a nonprofit organization, you should understand the types of structures available so that you can choose the one that will provide the most benefits to the type of organization you are planning.


An Association is an informal group such as the Parent-Teacher Association. A club can also be an Association. They can conduct business and open a bank account; however, the legal liabilities are a concern. What if the group is going on a field trip and someone gets into an accident? Who's liable? As a corporation, the organization doesn't have to worry about personal liability. Ultimately it depends on the size of the group. Is it a close-knit group of friends, or does the organization extend beyond those boundaries?


If you're registering an NPO, you may also consider setting up a trust for charitable gifts. Again, if there are members, liability is a consideration. A trust can hold even greater liability because of a higher fiduciary standard that makes a member personally liable for mishandling funds. You may begin to see why many nonprofit organizations consider incorporation. It takes planning as the organization must register with the IRS and use specific language; however, most nonprofits find it's worth it because it protects the members from liability for a range of issues from accidents to debt. Not only that, but many grants are only available to nonprofits that incorporate.


If you feel overwhelmed, take it a step at a time. And if you feel like you want to learn more about how to set up a nonprofit, we have advice for nonprofit organization startups. Get in touch with BDJ Non-Profit Solutions today for a free consultation.

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