Starting a nonprofit organization can be an inspiring way to give back to your community and help those in need. However, it is important to understand all of the steps involved in this process before moving forward. Growing and sustaining a nonprofit may take years of effort and a great deal of determination. 5 Key Steps to Building a Successful Nonprofit Meghan Kirby-McFarland. Meghan sits on the board for Copper’s Dream and is a content strategist at LinkedIn. Since the start of Copper’s Dream 5+ years ago, our team of dedicated volunteers have saved over 2,000 dogs.

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I doubt there is a single definition of success for nonprofit collaborations, but here’s my take: a collaboration is successful if the parties are eager to work together again. In contrast, if the parties are running away from each other, vowing never to collaborate again, something’s gone wrong. Here are 5 tips for success, plus a kicker at the end of this post for nonprofits committed to success with collaborations.

These 9 steps will help you get on the right track to making your nonprofit vision a reality. Complete the articles of incorporation. To start a nonprofit corporation, you have to file formation documents, commonly called “articles of incorporation.”. The 5 Keys to Successful Fundraising Page 3 By Sandra Sims of www.StepByStepFundraising.com Introduction “The5 Keys to Successful Fundraising” covers the essential elements to making a fundraising campaign work. This guide will be helpful for those new to fundraising, as well as provide fresh insights to experienced non profit leaders.

Tip #1: Beware the “scarcity mindset”

I love this: “Do what you do best and partner for the rest.” This quip acknowledges that there are limits to what we can accomplish on our own, and it also captures the positive, expansive outlook essential for a successful collaboration. Many nonprofits are jaded by negative experiences with past collaborations so it may seem naive to stress the benefits of a positive outlook. However, consider that each nonprofit has its own unique “sphere of influence.” Any nonprofit, no matter how successful, can only communicate with, and therefore influence, a finite number of people. But when that same nonprofit collaborates with another entity, their two spheres of influence combined can expand their ability to advance their shared goals and their individual missions. (This theory is consistent with a collective impact or a networked approach to problem solving.) So while collaborations definitely require time, energy, and tons of effort (and usually also exact a financial cost), the upside of collaboration can be enormously positive for moving an agenda forward, mobilizing stakeholders, or simply increasing a nonprofit’s ability to influence a greater number of people.

What’s the takeaway? Mindset matters. Think positive to unleash potential success. In the book Forces for Good, the authors observe that high-impact organizations are those that embrace a collaborative mindset:

We had assumed that there was something inherent in these organizations that helped them have great impact – and that their success was directly tied to their growth or management approach. Instead, we learned that becoming a high-impact nonprofit is not just about building a great organization and then expanding it to reach more people. Rather, high-impact nonprofits work with and through organizations and individuals outside themselves to create more impact than they ever could have achieved alone.

A scarcity mindset will put limits on all the potential upsides. Instead, look for abundance through a collaborative mindset: celebrate the skills, resources, and contacts that your collaborative partner(s) shares with you. If you are able to intentionally hold scarcity thoughts at bay, and replace them with a more positive outlook, you will energize the collaboration and release creativity and innovation. More on that below! Nonprofit leaders play important roles, especially when the collaborative partner is a grantmaker. As the excellent piece, Building Collaboration from the Inside Out(GEO), points out, when staff and board leadership visibly demonstrate commitment to a collaborative mindset, there is a greater likelihood of success. Just like any other cultural norm, collaboration needs support from the top.

Once your mindset is positive, you’re ready to take on other challenges in “forming, storming, norming, and performing” a collaboration!

Tip #2: Work with your partners to define success and articulate shared goals.

Each partner in a collaboration should be able to answer, “What role are we playing in this collective effort?” As any sports team coach knows, “keeping your eye on the ball” is key. At the outset of a collaboration it’s very useful to take the time to jointly work out and write down “what success will look like.” The process of identifying shared goals should also include exploring all the things that may go wrong. Looking at those potential derailments in the eye, in advance, will help the parties put strategies in motion to avoid them, and jointly developing a shared vision will motivate everyone to keep moving forward together despite the challenges.

Peter Kramer, Associate Director with the Nonprofit Finance Fund, notes that clarifying goals keeps collaborations from stalling. In his article, What it takes to succeed in a nonprofit collaboration, (Chronicle of Philanthropy) he wrote:

5 Key Steps To Building A Successful Nonprofit Business

The simple question, “What are we trying to achieve together and why?” can lead to candid conversations among partners and help prevent roadblocks. The motivations and goals of the partners don’t have to be identical, but articulating them clearly fosters transparency and helps manage expectations throughout the process.

We have found that the simple process of writing down shared goals and defining who’s doing what, will manage expectations about the parties’ responsibilities, which reduces surprises mid-project. When the National Council of Nonprofits engages in a significant collaboration our practice is to jointly prepare a letter-agreement that defines shared goals and spells out who’s responsible for what (and when collaborating with a for-profit entity, to avoid any concern about private benefit, we believe it’s extremely important to document that the collaboration’s goals will advance our own organization’s charitable mission.)

Tip #3: Be honest.

If “relationships are the currency of trust” then certainly trust is the currency of collaborations. Let’s face it: It’s hard for many nonprofit leaders to cede control and share power, which has to happen collaborations. Nonprofits have to trust their partners in order to share both power and responsibilities. Earning trust happens along the way, but you can look for and intentionally create opportunities to talk about trust issues and call out friction points with your collaborative partners. Some examples include discussing ways in which intellectual honesty and lack of resources could play out in the collaboration, or exploring what the norms will be for the parties to share credit, control, and be open to criticism. Nonprofits that already have cultures of accountability and transparency will be comfortable with conversations about trust but their partners may not, so be patient, and keep communicating.

Tip #4: Embrace mistakes, take risks.

One of the country’s leading scientific experts on creativity, Dr. R. Keith Sawyer, studied collaboration in the context of jazz performances. According to Sawyer, innovation is stimulated through a trial-by-error, improvised process, “with … multiple dead ends, and the reinterpretation of previous ideas.” One of the potential frustrations in collaborations can be the apparent need to repeat a variation on something that had not worked previously for one of the partners. Instead of being frustrated by what seems to be a waste of time, review lessons learned together. You may find that a slight spin on what was tried before will result in progress. It also may be tempting to take fewer risks because of the embarrassment factor of failing in front of peers. However, when a collaboration offers a supportive environment of learning and striving together, that may actually be the RIGHT time to take a risk.

Tip #5: Expect, and accept conflict, gracefully.

Assume that there will be conflict at some point in a collaboration. If you accept this, you will be more prepared when something blows up (inevitably it will!), but it will be easier to focus on the “big picture” instead of the slight or oversight, dropped ball, or worse. The key is to discern whether the collaboration’s goal is still within reach, and if so move as smoothly as possible beyond the conflict. Acknowledge the conflict, but focus on keeping the project moving forward together to reach the endgame: “We didn’t get this last bit right, but what can we do now to make sure it doesn’t happen again, and keep moving forward together?” If you ignore tensions or outright conflict, you’ll miss important signals that otherwise can lead to improvements and better solutions. Conflicts managed well can offer the necessary friction that polishes the final product.

Finally, don’t forget your manners. Expressing your ‘thanks’ when the collaboration is over is important!

Beyond Tips

A common lament among nonprofits is that grantmakers frequently encourage nonprofits to collaborate but don’t recognize the costs - and therefore don’t provide funding to nonprofits that they are simultaneously urging to collaborate. Nonprofits have a role to play in correcting this damaging dynamic. We need to self-advocate (which means speaking truth to power) about what it really costs to deliver what a grantmaker is asking us to do. As GEO points out, “When funders provide steady core funding to organizations participating in aligned work, it can give organizations what they need to support staff and leaders in developing capacities for collaboration, reduce competition among collaborative members for project dollars and ease the process of trust building. Grantmakers also should remember that achieving real results from collaborative efforts can take time.” (excerpt from What capacities do nonprofits need in order to collaborate?)

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The National Council of Nonprofits’ materials on #ownyourowncosts, and misunderstanding overhead may be useful for nonprofits to help frame discussions with donors/grantmakers. Additionally, to help nonprofits make the case that there are indeed hard dollar costs to collaboration, here’s a short list to use as a springboard for discussions with funders: Consider and define what will it cost your nonprofit to:

• Spend time defining and articulating joint goals?
• Spend time meeting with collaborative partners? Developing a rubric or process for evaluating the collaboration’s progress?
• Get to know each partner’s culture and build trust?
• Ensure that your nonprofit has the capacity (technology needs?) to communicate effectively and regularly with collaborative partners?
• Build your nonprofit’s ability to negotiate effectively?
• Adjust and adapt if things aren’t going according to plan?
• Evaluate and report/share lessons learned about the end results?

There are many useful resources for both nonprofits and grantmakers on collaboration. Here are a few we recommend:

Resources

• Mergers, collaborations, and strategic alliances (National Council of Nonprofits)
• Principles for Ethical Collaboration (various)
• What capacities do nonprofits need in order to collaborate? (GEO)
• Building collaboration from the inside out (GEO)
• Nonprofit collaborations: Structural options (Gene Takagi)
• Making sense of nonprofit collaborations (Bridgespan)
• Building successful collaborations (Lawyers Alliance of New York)
• Collaboration Hub (Grantspace)
• 8 Tips for collaborative leadership (Forbes)
• Start with a shared vision (Stanford Social Innovation Review)

5 Key Steps To Building A Successful Nonprofit Non-profit

In many ways, starting a nonprofit corporation is like starting any corporation—you register your business with the state, draft bylaws and file reports. However, there are a few additional steps if you plan to accept donations or apply for tax-exempt status.

These 9 steps will help you get on the right track to making your nonprofit vision a reality.

1. Complete the articles of incorporation

To start a nonprofit corporation, you have to file formation documents, commonly called “articles of incorporation.” Requirements differ state to state, but at minimum, you’ll need to provide your nonprofit’s name, registered agent and incorporator signature.

• Name: In addition to any state-specific requirements, your name can’t be the same as (or deceptively similar to) the name of another entity registered to do business in the state. You can usually check availability on the state’s business registration website.
• Registered agent: A registered agent accepts official notices on behalf of your nonprofit. If your nonprofit is made up of volunteer board members with regular jobs, it can be beneficial to hire a registered agent instead of appointing a member, as board members may change regularly.
• Incorporator: An incorporator is the person who signs your formation document and submits it to the state governing agency. You’ll need at least one incorporator. Typically, this is a person within the nonprofit, but some nonprofits authorize attorneys or professional services to submit their filing.

Blitz: the league. Your state may also require you to list directors, business purpose and more. If you plan to file for federal tax-exempt status, your articles will need to pass the IRS’s “organizational test,” as described in Publication 557. In particular, your nonprofit’s purpose must be limited to one of the purposes the IRS expressly permits.

2. File the articles of incorporation.

You will need to file your articles of incorporation with the governing agency in the state. Generally, you will file with the secretary of state or a business registration division or department. However, a few states have different governing agencies—for instance, New Jersey filings are handled by the Department of the Treasury.

Your articles of incorporation will also need to be accompanied by a filing fee. In most states, fees range from $20-$100, but again, there are a few outliers. Kentucky, for example, only charges $8 to file nonprofit articles of incorporation, while Maryland requires several fees with a minimum total of $170. In most states, you can file either online or by mail.

3. Draft bylaws.

Bylaws are the rules that govern your nonprofit. For instance, bylaws dictate how officials are elected within your nonprofit and how assets will be distributed should your nonprofit dissolve. When drafting bylaws, it’s a good idea to seek the legal assistance of an attorney well-versed in the nonprofit laws of the state.

If you apply for federal tax exemptions, you’ll attach your bylaws to your IRS application. In this case, you’ll need to ensure your bylaws don’t conflict with IRS requirements—for instance, your bylaws should support the business purpose listed in your articles and limit the powers of directors to those permitted for exempt nonprofits.

4. Hold an official meeting.

At your first official meeting, your team will adopt the bylaws for your nonprofit. You will also elect any directors and other officers (such as president, secretary, treasurer, etc.) needed to run your nonprofit. You’ll also make any corporate resolutions needed to complete the process of starting a nonprofit. Like any corporation, you’ll need to follow standard corporate formalities for meetings, like recording meeting minutes and adding them to your corporate book.

5. Apply for a Federal Employer Identification Number.

The IRS uses ID numbers known as FEINs or EINs to easily identify businesses on tax-related filings. Whether you plan to file regular taxes or apply for federal tax exemptions, you’ll need to obtain an EIN first. EIN applications can be completed on the IRS website and do not require any filing fees.

6. Apply for federal tax exemption.

Many nonprofits opt to apply for federal tax-exempt status under Section 501(c) of the Internal Revenue Code. There are a few different application forms and procedures, depending on your organization’s purpose. The most commonly-sought tax-exempt status is 501(c)(3), which includes charitable, educational and religious organizations. All applications require supporting documents (such as articles, bylaws and financial reports) and a filing fee.

Often, applying for federal tax-exempt status will enable your nonprofit to be eligible for other state tax exemptions as well. However, in some states, you’ll have to file additional paperwork to apply for state tax exemptions—you can typically find this information on the state’s Department of Revenue or Department of Taxation website.

7. Familiarize yourself with initial state requirements.

States vary widely in initial requirements. Arizona, Georgia, Nebraska and Pennsylvania all require that new corporations publish notice of their incorporation in local newspapers. Nevada also requires publications for foreign corporations. Also, certain states, like Alaska, require an initial report to be filed as opposed to just an annual or biennial report. Depending on where you’re operating, you may also need state or local business licenses or other permits.

8. Register as a charity.

If your nonprofit involves fundraising or accepting donations, you may need to register as a charity. If required, registration typically must be done before your nonprofit organization accepts any donations. A few states (such as Delaware) don’t require charity registration, but it’s a common requirement in most states. Charity registration is usually managed by either the secretary of state or another state office that deals with charities and charity registration.

9. Take care of annual compliance requirements.

5 Key Steps To Building A Successful Nonprofit Organizations

The paperwork doesn’t end when the nonprofit holds its ribbon-cutting. Each year, the nonprofit will need to take care of compliance requirements. In addition to any annual tax filings required, most states require annual or biennial reports where nonprofits update any changes in management or contact information. Charity registrations often need to be renewed annually as well.