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What are some tips for starting a nonprofit organization?

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Quick Answer

Good tips for starting a nonprofit organization include conducting market research to ensure the organization offers unique services, creating a sound business plan and incorporating the organization, recommends the U.S. Small Business Administration. Incorporation of a nonprofit organization involves selecting a business name that adheres to state laws, filing paperwork, applying for tax exemptions, writing bylaws, and acquiring required licenses and permits. In some states, nonprofit organizations must appoint directors and initiate a board meeting before filing incorporation articles.

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Determining a distinct niche is crucial, as more than 1.4 million nonprofit organizations already exist in the United States, as of 2015, reports the U.S. Small Business Administration. It's important to create a comprehensive business plan to obtain financing from donors and government sectors and also attract qualified board members and volunteers.

The main advantage of incorporating a nonprofit organization is achieving 501(c)(3) tax-exempt status, notes the U.S. Small Business Administration. Articles of incorporation feature information about the organization, including its name, registered agent, official address and membership structure. Nonprofit organization founders should apply for the federal nonprofit status within 27 months of the incorporation date.

The organization may begin fundraising after creating corporate bylaws, choosing directors and obtaining licenses, states the U.S. Small Business Administration. Grants and loans are available from the government and other organizations.

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