Grantmakers for Effective Organizations, an affinity group of the Council on Foundations, defines an effective nonprofit as one that has "the ability to fulfill its mission through a blend of sound management, strong governance, and a persistent rededication to achieving results." Establishing a nonprofit organization requires a full understanding of the key characteristics that will be important to future funders. They include a vital mission, clear lines of accountability, adequate facilities, reliable and diverse revenue streams, and high-quality programs and services.
As you embark upon the first steps of legally incorporating a nonprofit organization, drafting the bylaws, and building a board of directors, it is essential to keep these characteristics in mind.
This tutorial describes 12 tasks you will need to accomplish as part of the process of establishing a nonprofit organization:
- File the certificate of incorporation
- Select individuals to serve on the board of directors
- Develop vision and mission statements
- Establish bylaws and board policies
- Obtain an employer identification number (EIN)
- Open a bank account and establish check signing procedures
- File for federal tax exemption
- Follow state and local nonprofit regulations
- Find office space and obtain office equipment
- Recruit staff and prepare a personnel manual
- Establish a payroll system and procure necessary insurance coverage
- Develop an overall fundraising plan
