Starting a Nonprofit & Fiscal Sponsorship
Countless community needs have been met by nonprofits. And undoubtedly, new solutions will inspire others to consider the same organizational path. Yet, not every idea or initiative lends itself to starting a new nonprofit organization. The challenge is knowing when the conditions are right and the funding and human resources exist to go this route.
For anyone considering starting a new nonprofit, the best place to begin may be the Starting a Nonprofit Organization guide created by 501 Commons. In simple terms, the guide takes you through a series of informative parts and key questions like:
- Is your idea a nonprofit or a business?
- What kind of nonprofit?
- The legal steps to form a nonprofit
- Nonprofit management obligations
- Checklist for starting a nonprofit
- Online resources
Perhaps most important – or essential to a group’s potential for success – is part four of the Starting a Nonprofit Organization guide. It outlines the steps to developing a business plan. A basic template for creating one – including a staffing plan and budget – can be found at the end of the guide.
The importance of a business plan can’t be overstated. While a nonprofit organization is different in many ways from a for-profit business, from an operations perspective, there are many similarities. A well-developed business plan allows you to assess if you’re ready to start a new organization and how sustainable it may be. It also:
- Becomes an introductory document to share with community leaders and potential board members, staff, funders, and partners in the venture
- Gives future board, staff, and volunteers of the organization a road map for building a successful organization
- Helps you respond to questions from the state of Washington and the IRS
Getting legal or other professional help when starting a new organization – while not required – is one way to ensure compliance with state and federal requirements. One organization to note is Washington Attorneys Assisting Community Organizations, or WAACO. WAACO provides pro bono legal assistance to nonprofits, so groups can focus on their work in the community without concern about legal issues. Help with forming a nonprofit (e.g., incorporation and application for federal tax-exemption status under IRS Code sec. 501(c)(3) is a service WAACO offers.
Yet here again, having a business plan is an essential step. Among WAACO’s eligibility requirements, a start-up organization must demonstrate that it has such a plan. Through its website, WAACO also puts out an excellent and more extensive free guide called the Washington Nonprofit Handbook.
Trainings & Other Services Providers
501 Commons and WAACO are not the only options for help in starting a new nonprofit. A number of highly skilled consultants – many of whom serve the whole state – are also knowledgeable in this area. Some have experience in specific nonprofit subsectors, like arts and cultural organizations, while others have experience with groups serving communities of color or special populations, like immigrants and refugees. To find these service providers, including those who’ve been evaluated by 501 Commons’ review process, visit the Statewide Nonprofit Resource Directory’s “Consultants & Other Nonprofit Specialists” page.
Also, every month and around the State, there are numerous learning and networking opportunities for current and aspiring nonprofit professionals. Take advantage of events offered by service providers approved and listed in the Resource Directory as well as those put on by 501 Commons. Some events cost a fee, but others are free!
Other Ways to Serve Your Mission: Fiscal Sponsorship
As suggested earlier, forming a new nonprofit organization is not the only way community-benefiting ideas become reality. The American Bar Association has a helpful article about alternatives to forming a charitable nonprofit. One effective way is fiscal sponsorships. Learn more about fiscal sponsorships through two excellent links below.
Starting a Nonprofit Resources
- by 501 Commons [PDF document]
- Washington Nonprofit Handbook
Other printed materials we like include:
- The Nonprofit Handbook by Gary M. Grobman
- Starting and Building a Nonprofit: a Practical Guide by Peri H. Pakaroo
- How to Form a Nonprofit Corporation by Anthony Mancuso
Resources on Fiscal Sponsorship & Other Alternatives to Forming a Nonprofit
- Guide to Fiscal Sponsorship
- Fiscal Sponsor Directory
- What is a Social Purpose Corporation? [Word document]