First Things First -- What Do You Mean by "Starting a Nonprofit"? Get Clear About the Purpose (the Mission) for Your New Organization Perhaps the best way to really clarify to yourself what you intend to accomplish by starting a new nonprofit is to write a basic mission statement for your organization. You'll soon need this mission statement anyway if you plan to incorporate your nonprofit (more about incorporation a little later on). The following guidelines may be helpful to you when writing your first, basic mission statement.

1. At is most basic, the mission statement describes the overall purpose of the organization. It addresses the question "Why does the organization exist?"

2. The statement can be in a wide variety of formats and lengths, ranging from a few sentences to a few pages. At this stage in the development of your nonprofit, it might be best to keep your mission statement to at most about half a page.

3. When writing the mission statement, try include description of what you think will be the new nonprofit's:
a) primary benefits and services to clients
b) groups of clients who will benefit from those services
c) values that will guide how your nonprofit will operate
d) how you'd like others to view your nonprofit

4. It's often useful to refine the first, basic mission statement by adding or deleting a sentence or a word from the mission statement until you feel the remaining wording accurately describes the purpose of the new nonprofit organization.

Now Think About What Kind of Nonprofit You Want to Start The phrase "starting a nonprofit" can mean several things. Read the following very basic information to begin thinking about what you mean when you set out to "start a nonprofit". Keep your mission statement in mind when thinking about each of the following.

- You can be a nonprofit organization just by getting together with some friends, eg, to form a self-help group. In this case, youÕre an informal nonprofit organization.

- You can incorporate your nonprofit so it exists as a separate legal organization in order to a) own its own property and its own bank account; b) ensure that the nonprofit can continue on its own (even after youÕre gone); and c) protect yourself personally from liability from operations of the nonprofit. You incorporate your nonprofit by filing articles of incorporation (or other charter documents) with the appropriate local state office. (An incorporated nonprofit requires a board of directors.) In Canada, you can file for incorporation at the provincial or Federal levels.

- If you want your nonprofit (and if you think your nonprofit deserves) to be exempt from federal taxes (and maybe some other taxes, too), you should file with the IRS to be a "tax-exempt" organization. (The IRS states that you must be a corporation, community chest, fund, or foundation to receive tax-exempt status. Articles of association may also be used in place of incorporation.) (Probably the most well known type of nonprofit is a the IRS classification of 501(c)(3), a Òcharitable nonprofitÕ.) (Being tax-exempt is not the same as being tax-deductible.) In Canada, you can file for tax-exemption at the provincial and Federal levels.

- Depending on the nature of your organization, you may also granted tax-deductible status from the IRS. Publication 526 lists the types of organizations to which donations are deductible. In Canada, the Canada Customs and Revenue Agency (CCRA) grants charitble status, and you must be incorporated to achieve charitable status.

- So, for example, you could start a nonprofit that is incorporated, tax-exempt and eligible to receive tax deductible donations.

- The particular steps you take when starting your nonprofit depend on your plans for your organization, including the nature of its services. They also depend on how the IRS interprets the nature of your organization, including its services. Again, in Canada, you can file for incorporation and tax-exempt status at the provincial or Federal levels.

"Should I Really Start a New Nonprofit?"

Before starting a nonprofit business, there is some preliminary thinking that you really should do. Doing this thinking now can save you -- and maybe your employees and clients -- a great deal of anguish. Note that by reviewing the following manual, you'll be able quickly to implement a checklist to start a nonprofit, register it with your state (if you want to be incorporated) and file with the IRS to get tax-exempt and/or tax-deductible status.

Preparation for Planning a Business Venture

Consider Fiscal Sponsorship to Jump Start Your Organization In some cases, you might find and work with another nonprofit organization that will act as your fiscal sponsor. A fiscal sponsor might be useful to you if your nonprofit:
1) Does not have sufficient resources to handle startup costs and fees
2) Does not have sufficient skills initially to manage your finances
3) Will address a community need and then no longer need to exist. See Fiscal Sponsorship -- Help You Get Started?
Do You Need a Lawyer to Start Your Nonprofit?

You Can Do Much of the Work Yourself -- But Get Legal Advice and Guidance
You can do much of the work yourself to get incorporated and/or tax-exemption and/or tax-deductibility, but you should have some basic guidance and advice from a lawyer who understands nonprofit matters. For example, in the USA, it's very important how you characterize your plans when filing for incorporation with your state and/or for tax-exemption and/or tax-deductibility with the IRS -- otherwise, your new organization may be deemed a for-profit or you may have to pay federal taxes (among other taxes) on your income. In addition, there are various reports and filings you may have to submit. A nonprofit-knowledgeable lawyer can help you a great deal. Ask other nonprofits for references to good lawyers. Ask a local funder. Call the local bar association.