

In recent years, more and more people have become interested in working for, supporting, or even starting nonprofits.
Let’s start by defining the concept. Some entrepreneurs think their companies might qualify as nonprofits because they aren’t making a profit. That’s not the way it works. Unlike a for-profit business (whose goal is to make a profit), the goal of a nonprofit organization is to support a cause. All of the organization’s income from grants, donations, membership dues or product sales, is put back into the nonprofit to help it grow.
There are many kinds of nonprofits, according to the IRS—27 different types, to be specific. These can range from childcare facilities to teachers’ retirement fund associations. However, the organizations most of us think of when we hear the word nonprofit are 501(c) (3) organizations. Generally, these are either charities or private foundations.
Federal, state and even local governments generally consider nonprofit organizations to be tax-exempt. In order to get this status, however, you must incorporate as a nonprofit organization first. This requires filing regular documentation to keep your nonprofit in compliance.
Nonprofit organizations don’t have owners. Instead, they are overseen by a board of directors responsible for making sure the nonprofit acts in accordance with its mission, spends its money wisely, and abides by regulations regarding nonprofits. Board members sometimes run the nonprofit’s day-to-day operations, too.
If you’re ready to start a nonprofit, begin with a mission statement and a business plan. (Yes, you need one.) Search for business planning tools for nonprofits online.
You can learn more about nonprofits and find resources for getting started at these sites:
Of course, your SCORE mentor can also help you plan for a successful nonprofit.
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