Men and women start charities for a number of reasons. Many want to establish a charity or nonprofit organization because there is a particular cause that speaks to them on a personal level.
Just about anyone can learn how to begin a charitable organization and then be successful running it, provided they start with a good foundation and the necessary legal requirements.
In the United States, a not-for-profit charitable corporation is referred to as a 501 (c) corporation. This means it qualifies as a tax-exempt charity under Section 501 (c) of the Internal Revenue Code. This classification makes the nonprofit exempt from paying taxes and also ensures that any donations made to the foundation are also tax-deductible.
In Canada, a charitable organization can be established by contacting the Canadian Revenue Agency. The process usually takes around 18 months and will require the foundation to be incorporated. Charitable status allows you to issue receipts to donors for income-tax purposes and will also enable you to file for provincial and property tax exemptions, own your own property and create a bank account. The following are seven steps men and women can follow to start a charity or nonprofit organization.
1. To begin a charity, first you must come up with a purpose and a mission statement. Perhaps there is a cause that is near to your heart and you want to help fund research or initiate a group of like-minded individuals working toward the same purpose.
2. Establish an organizational structure for the charity. This means organizing staff members and volunteers into a distinct hierarchy.
3. Fill out and file the appropriate paperwork with the government in order to be able to operate with a nonprofit status. You may need to consult with an accountant to do this properly.
4. Open a bank account in the charity's name when all identification numbers and paperwork have been confirmed in order to collect donations and pay any business expenses.
5. Familiarize yourself with various fundraising efforts and then begin advertising your mission statement and getting the word out about your new charity. This can be done by hosting a charity launch event.
6. In lieu of monetary donations, solicit certain businesses, such as printers or marketing companies, to donate their time and services to help with the business building blocks necessary to solidify your charitable organization.
7. Maintain accurate record keeping and remember to thank and provide receipts to anyone who makes a donation.
Starting a charity means laying some groundwork, but once established, it can be a successful foundation helping to raise money and awareness for a worthy cause that's near and dear to your heart.
