Gaining Nonprofit Status

After Gaining Your Nonprofit Status

You’re legit! You’ve got your nonprofit status! Congratulations. Now the REAL work begins.

Build a board of directors. Because nonprofit corporations do not have shares of stock, the board is the closest thing to an owner a nonprofit organization has. Look for people who share your vision and understand your mission. Bring people on the board with a wide range of skills, abilities, and networks. Consider individuals with specific relevant expertise (experts with backgrounds in your organization’s field, legal, accounting, human resources, etc.). Of course, directors who can also give generously to your organization are also valuable. Ensure diversity: gender, age, socio-economic background, race, etc.

Prepare the bylaws. The bylaws are the “operators manual” for the board. Draft and adopt them early. And then follow them!

Develop a strategic plan. It is impossible to know the future – especially as you start a new nonprofit organization. Still, if you don’t know where you are going, then it doesn’t matter what path you take. Practically speaking, a long-term plan will help attract board members and funders as well as help you complete the paperwork. What will be true three years from now about your new nonprofit? Who will you be serving? How many? What programs and services will you be providing? Will you have staff? How many? What facilities will you need? What materials will you need? How much will all of this cost? From what sources will the revenue to meet these expenses come?

Set up tax exemption with the state. Nonprofit organizations are not required to pay certain taxes (e.g., certain sales taxes). Once your organization has received its nonprofit status from the federal government, file the appropriate paperwork with the state and receive a state tax exempt number.

Register to raise funds. Register with the Kentucky Attorney General’s office before beginning to raise funds in Kentucky. Before you raise funds in other states, check to see whether they also require some form of registration.

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