As a grant writer
and nonprofit consultant, a dozen or more times each month someone contacts me
with an email subject line like this one.
"Need a
grant to start a nonprofit"
My answer is
always going to be along the same lines; it just isn't going to happen. You
have to already be a nonprofit, and usually an IRS approved nonprofit, i.e. a 501(c)(3),
with financial statements to apply for most grants. If disposable funds for these
grantors become less available, as is forecast by many experts, guidelines even
for approved nonprofits are going to tighten. Getting that determination letter
can require a significant outlay of funds, typically $1,500 or more, usually
much more. Typically, a nonprofit doesn't become a viable candidate for
significant grant funding for three years.
That doesn't mean
you can't start a nonprofit. You just have to recognize that you have to get
the money from other sources.
First, you should
be a corporation in your state. It will give you some measure of legitimacy and
personal protection and you will need that corporate status when you do apply
for formal 501(c)(3)status. Filing fees vary, but most states don't charge
exorbitant fees to form a corporation. Most states have the forms and fees
required available to fill in on their website. They are normally found on the
secretary of state's page, but typing in "nonprofit corporation filing
fees, your state" in a search engine will get you to the right starting
point.
If you are
detail-oriented and have a basic understanding of the legal and business terminology
used on the site, and are willing to spend several hours understanding the
legal ramifications of filing the paperwork, you can do it yourself. Hint-the
purpose of filing isn't so you can get grants!
If you don't
understand the terms, my company my company offers low-cost
assistance to assist you in learning the terminology and provides research avenues
for your education in the requirements. Typically, you are going to spend from
$100 to $400.00 dollars at this stage.
Even this low
level of spending can be daunting if you don't have any money. So where do you
get it?
Most nonprofits
start out as self-financed organizations, usually through non-tax-exempt donations
from supporters. Some also use fiscal sponsors and that can be an ideal way for
you to access professional expertise as well as funding. It will allow you put
your program on trial status without the bother of having to dissolve a
nonprofit entity if things don't work out
.
One word of
caution is warranted here. Due to recent problems with some fiscal sponsor
organizations, many are now requiring you to have your determination letter
from the IRS, but it is still worth looking in your area for organizations with
missions that mesh with yours. Fiscal sponsorship is a topic of its own, and I
won't try to cover the requirements and ramifications here.
Who puts up the
initial funding? Your friends, family and interested supporters will probably
be your first donors. If you have been discussing a community need with friends
and family, you start with them. For instance, you will need a board of
directors. Although some states only require one board member to file the nonprofit
paperwork, (California is one) you should have at least three, since you will
need a minimum of a president, vice-president and a secretary-treasurer at some
point. Start with prospects for that board, making sure that they have the
expertise and commitment necessary to see the task of forming a nonprofit
through to the end. They should be willing to provide the nucleus of your fundraising
goal.
Maybe they each
can only kick in twenty dollars. Ask them to recruit additional funding from
people they know. Twenty people times twenty dollars will normally get you
started. If you can't generate at least this much support in your own
community, you might have to reconsider whether this is the right path for you,
and/or redesign the way you are presenting the idea to supporters.
You will need to
develop a mission statement, a strategic plan, by-laws, a business bank
account and an "elevator pitch" to present your idea to these
prospective "investors". In other words, you need to be credible.
That's a great way to break into the fundraising side of the nonprofit world.
Other avenues
include community fundraisers such as the ever-popular yard sale or car wash,
Facebook campaigns, even Twitter posts to find more interested people.
Until you have
your IRS nonprofit letter, you should not tell anyone that their contribution
is tax-deductible, but you should keep track of donors even at this stage. Some
of them may become the nucleus of your organization. They may also be willing
to help you recruit more supporters. Call them or drop them a thank-you email
even if their contribution is only five dollars, and ask them to refer you to their friends.
If the contributions are
in cash at an event, have a postcard-sized handout you can give them outlining
your organization's goals and asking for their help in recruiting other
supporters. If you have a Facebook page, put out a call for supporters there.
The nonprofit
world has certain ethical and business requirements exactly like those found in
the for-profit world. It has its own jargon, rules and its own goals. If you
understand that this is a learning process and are willing to start small and
work at it, you can certainly succeed.
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