Setting up a nonprofit organization requires passion, patience
Published: August 11,2014
Jeffery Duplessis has a passion for nonprofits. After spending some 20 years in the media, he is now communications and training coordinator at the Mississippi Center for Nonprofits in Jackson helping others launch their charitable concerns.
He said he finds his work immensely rewarding, but has seen too many individuals who have started working toward opening a nonprofit only to stumble. Duplessis’ advice to others looking to establish a non-profit organization is simple — stay true to the cause and be prepared to see the process through to the end.
“I can’t tell you how many people have called me over the years and said they need a job and want to start a nonprofit,” Duplessis said. “That is not the right way to begin. You have to be passionate about your cause — to make a difference in your community. You are going to have challenges. If you are not committed, those challenges can become brick walls. You have to be passionate, persistent and patient.”
So, what are the steps to starting a charitable concern? The first stop is the Secretary of State’s Office.
Nonprofits operating in Mississippi must obtain legal incorporation through the SoS. In addition, the SoS must approve the prospective nonprofit’s right to solicit money. Gaining approvals usually takes less than a month and each requires a $50 fee.
After clearing the SoS, the next step is to craft a nonprofit plan. This is similar to creating a business plan for a for-profit concern, but there are differences. For instance, a prospective nonprofit must outline its bylaws, which spells out exactly how the nonprofit will operate. This can take time, though the Mississippi Center for Nonprofits and other organizations offer a bylaws template at no cost.
The prospective nonprofit must also choose a board of directors, a process that requires time and forethought. Duplessis said it is important to create a board whose members are in unison with the mission of the nonprofit, but who also offer diversity. Landing board members with, say, expertise in accounting, finance and/or law will give the nonprofit much-needed brainpower when it is up and running.
The bylaws also need to spell out the details of funding — how will money be solicited and from where are key questions that must be answered.
With the SoS’ blessing and the bylaws in place, prospects then must meet federal requirements. Step one is to obtain an employer identification number. This is, in essence, a Social Security number for businesses, and generally takes two months or less to obtain.
Prospective nonprofits also must get tax-exempt status from the IRS. This final step is not required, but an organization without tax-exemption will be limited in their fundraising ability. “Without it, you are limited to conducting cupcake sales and those kinds of things,” Duplessis said.
There is good news here. The IRS has required nonprofits looking for 501 (c)(3) status to file Form 1023. However, in June the IRS began offering a 1023EZ. That change means that prospective nonprofits must fill out a three-page form as opposed to the 12 pages that were once required.
Still, the IRS step is not quick or cheap. Approval can take three to four months, and the fee is $400.
“This is where passion comes in,” Duplessis said. “There are going to be frustrations. Not everything is going to be in your control. For some, merely filling out the application can be frustrating and stressful.”
For those who find all of these steps too much to undertake, the Mississippi Centers for Nonprofits offers consultants who can help with part or all of the process. It is not free, but can save peace of mind and help insure that all of the requirements are met.
The Center offers regular workshops to help ease the pain. The next scheduled event, titled “The Right Way to Start Your Nonprofit,” will be held from 9 a.m.-3 p.m. at the Center 201 West Capitol Street, Suite 700, in Jackson. The cost is $139, which includes what Duplessis calls the “Bible of nonprofits,” a publication that spells out the entire start-up process in detail.
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