One of the main reasons many people who want to found nonprofit organizations don't is that they aren't sure about the startup process. If you're not sure how hard it will be, nonprofit startup services providers tell people to account for these four things before they move ahead.

Legal Structure

Many of the potential problems that may follow from founding a nonprofit organization come from legal issues. The main benefits of a nonprofit operation flow from its special tax status. However, the law imposes responsibilities that come with this.

Foremost, you are expected to implement serious corporate governance. This means you'll need to draft bylaws for the organization. These cover basic questions about who does what at the organization and how power there works.

You should be able to answer questions about fundamental concerns that anyone encountering the organization for the first time would want to know. For example, is there a board that has the final say? How will the board delegate powers to people who then put the nonprofit's mission into action? What happens if someone in power suddenly develops a debilitating medical issue and can't perform their duties?


Likewise, you should have a structure in place to handle the finances. A nonprofit startup services firm can help you identify which structure is best for your circumstances. For example, do you want to be a truly no-profit organization, or are there not-for-profit scenarios where the operation would hold onto or reinvest the money for long-term needs?

Eventually, you'll need to report these inflows and outflows on tax forms. It's a good idea to have a professional guide you through the process and make sure everything is square, especially during the first year of operation.


Similarly, you'll need to set up accounts in the nonprofit's name. It's important to make sure these accounts are consistent with its legal and tax statuses. For example, there might be some high-growth investment vehicles that aren't appropriate even if they provide the best returns.

Also, you'll want to be sure about who can access funds and when. You don't want to be in a situation where you can't access the necessary money, but you also don't want it to be easy for someone to get at it without at least one additional authorized signature.


Many organizations will end up in possession of properties. As occurs with financial accounts, you need to make sure these don't end up functioning as investments that are contrary to the operation's mission and legal status.

To learn more, contact a nonprofit startup service.