How to Start a Nonprofit with No Money

What do you do if you want to start  a non-profit but you don't have any startup money to get it launched? That's  what I'll talk about in this video. Welcome or welcome back! My name is Amber Melanie  Smith and I am a non-profit founder and executive director who makes these videos here on  YouTube to help people who want to make a social impact whether that's through starting a  non-profit or a social Enterprise or a socially conscious business and more as always I hope  that you find this vid

eo helpful and useful to you and your social impact Journey whatever um  step you might be on in that journey and don't forget to give it a like And subscribe to this  channel for more content all about these topics I also have a website FounderToFulltime.com  where people looking to start a non-profit can find some online courses that will help  you work through the steps to get it going and develop a sustainable fundraising plan I want  to preface this video by just saying that just like start

ing a business starting a non-profit is  going to require some amount of startup funding even if you can get a lot of items or services  that your non-profit might need donated there are some of those costs that you just can't avoid  paying for things like for example the filing fees to your your government to make your non-profit  an official legal entity but if you are starting with zero funds that doesn't mean that you can't  start a non-profit it just means that you're going to have a couple

of other extra steps between you  and making it an official non-profit organization okay so let's jump in the first phase that I will  talk to you about regarding starting a non-profit is a phase that you need to take whether you have  startup funds or you don't have startup funds and that is to start by doing your research you really  need to understand the community or social issue that you plan to tackle through your non-profit  and be kind of an expert on the topic before you even get start

ed you need to be able to understand  why your organization is needed and make the case for its existence and for people supporting it um  right right out the gate so to do this you want to really understand the needs of the people  or population that you're planning to serve surveying them is a great way to understand their  needs by simply asking them what do you need what needs are not yet being met by you all of this  research is going to go into later making your case and fundraising and de

veloping things like  your mission statement and marketing materials for your organization so it's a really good idea for  you to have a sense of how you're going to talk about your organization the talking points if you  will at the very beginning a second thing that I recommend you do before anything else is to start  considering who might be on your founding board of directors you're going to need to assemble a  board of directors in order to become an official legally recognized non-profit o

rganization anyway  so there's some value in thinking about what are the talents and the skills and the people who are  connected to different entities in the community who are these people and is there  an opportunity for you to get them um into your organization now so that they can be  helping with the other startup tasks that you're going to need to be doing okay so you've done your  research you feel like you can make the case for the need for your organization you've started to  think thro

ugh who might be on your founding board of directors and possibly even recruited some  of those individuals early on the next step is you're going to need to get some of the money in  the door now so that you can pay for those must have expenses that you just can't get donated like  the legal fees to pay for the filing process for your non-profit or even website hosting and basic  website costs or possibly even liability insurance depending on what your mission is so in this phase  we'll call it

the raising money phase your first step is to develop a Bare Bones budget what is the  minimum amount of money you absolutely must raise before you can pay for some of those expenses  that you just can't get donated so do this how you want you can make a spreadsheet a document use  a budget template but you're going to want to make a list of all of those expenses that you're  anticipating and then research the costs of each of those things so if it's uh filing for your  organization to be incor

porated in your state what are those filing fees for your state and then  the filing fee fees for the federal government and then if you need liability insurance because  your organization's early work is going to include something that will possibly entail some kind of  liability physical or otherwise I'm talking about things like working with vulnerable populations or  working with equipment or Machinery that could be hazardous or dangerous or working with  volunteers if anything happens with

any of those items you might be liable so protecting  yourself on a basic level through that kind of insurance could help you with that and then  you really do need a website some kind of presence that can attract people and explain  your mission so those basic website hosting costs it doesn't have to be a very fancy website  I encourage you if you have the inclination and basic skills to even try to create your own  to save on the costs of web design just to get something up there at this very

early stage  so you're putting together this budget and it's just the basics at this stage it really shouldn't  cost more than a couple thousand dollars between all of the things that I just listed obviously  it will vary based on your specific situation and Mission but that is that is a pretty good ballpark  estimate no more than a couple thousand dollars now it's important to know of course you're  going to need to raise money for other things in the future but the goal right now is not  to wo

rry about that the goal right now is to raise just enough to get your official non-profit  paperwork into the government's hands so that they can make you an official tax-exempt non-profit  now you've got your budget you know the dollar amount that you are aspiring to raise let's  say it's three thousand dollars this is going to help motivate the people around you to help  contribute to this fund to get things going so step two in this fundraising phase is to develop  your fundraising strategy a

nd there are two things you really want to do as part of this step the  first is to identify what is the audience in your community that is most likely to want to support  your specific cause or Mission does your mission relate to businesses or entrepreneurs perhaps  then the business Community might be a good donor pool for you perhaps your mission will help  or serve kids or families then parents or families could be a good potential donor population for  you maybe you're doing an animal rescu

e or a group that's helping animals someone with pets  who can empathize with with you know a Love of Animals might be a good donor population for  you so who's your target audience as donors um and the second part of this is you want  to get a sense of how many donations from how many people you need to collect in order to reach  the goal amount that you set through your budget one way that you can do this is by using  a tool called a gift range chart and I'll show the picture of what that migh

t look like  here but it's basically a chart a chart saying that you need to raise a certain number of  donations at certain levels so let's say you need 10 donors who will get ten dollars  each that you can raise a hundred dollars or 10 donors at 50 each to raise five hundred  dollars so basically just determining what are the different levels and how many people need to give  at that level for you to reach the total goal of for example the 3000 I said before the purpose of  a gift range chart

is twofold one it will give you and possibly your other team members if you have  a pre-assembled board or team of people helping you out it will give you a sense of the number  of donations you need to get which can be very motivating and help you be very goal oriented the  second thing is it's psychologically motivating for donors if I see that you just need one more  donor to give you fifty dollars and then you'll reach your goal there that's exciting I want to  be that donor I want to meet t

hat need for you um it's like when you have a like a coffee punch  card and you have just like one more coffee to go before you can get a free coffee you really  want to get that last coffee it's the same kind of psychology um so this gift range chart will  help you develop the rest of your fundraising strategy and help you go out there and talk  to people and let them know what you need and make your ask later on in this phase the third  thing you want to do as you're developing your fundraisin

g strategy is develop your fundraising  message basically what are your talking points how are you explaining your organization to  people you meet in the community who might want to donate how are you inspiring them to want to  give so that you can support those startup costs so your compelling fundraising message is going to  include possibly a couple of different components the first is sort of your case for support  it's like a proof of concept maybe you have a new organization and it hasn't

done anything  yet so you can't show the past evidence of how it's working what you can do however is show  how similar models or similar programs maybe in other regions have been very effective and  by bringing it here to your community you can bring this effective model here too and help  people here so all that research you did in the very beginning of this process should really  come in handy here because you should be armed with Statistics something like did you know that  one in four teen

s say they express or that they experience depression or anxiety and let's say  you're doing a youth Mental Health Organization um that number can really help people in  the community understand the need for your organization and why it's important that they  donate donate to help you with your startup costs as part of your fundraising message I also always  recommend that you include a little bit about your yourself personally why do you want to start  this organization why are you the best fit

or a a good leader to start this organization is there  something about your experiences that drives you to to do this work also people are more likely  to donate when they feel like they know you and trust you so opening up a little bit sharing more  of your personal story can help build that trust and credibility which will inspire donations okay  so at this point you've got your fundraising goal you've got um a sense of the number of donations  you need at each level in your gift range chart

you've got your fundraising message now it's  time to go out there into the community and start building up a little bit of an audience so  that those people can donate to your startup costs there's a lot of ways you can do this networking  events is a great way social media telling the stories and sharing your goals there with a link  where people can contribute another great way starting with the people you know um in your  circles if someone is not in a position to donate perhaps they are wi

lling to share your  message on social media or amplify your cause in some other way but the idea here is your  social connections are going to be the best way for you to get some of these initial donations and  that target audience that we talked about before let's say your target audience is um pet owners  right so where are the pet owner groups in your community is there a dog walking Meetup that you  might check out and join and share more about your cause is there an association of veterina

rians  um where where are all the people who might be connected personally to your costs somehow you  want to go to where they are and share your message with them at this point you've got your  goals your fundraising message you've started to do some Outreach to build up your audience  now it's time to make the ask simple you make your case you share a story of someone who might  be impacted you share your story you share the statistics based on the research you did early  on in this process an

d you say if we want to make this organization a reality I need to raise  X three thousand dollars for example I can get 30 of you to donate a hundred dollars hopefully I  did that math right we will reach our goal that's just 30 people don't you want to be number 29 and  number 30 in that in that list yes you do donate here one thing that's really important to do at  this phase where you're actually making the ask for money to be very transparent that you do not  have your official legal non-pr

ofit status yet um you can start to collect donations before  you get your status but you do have to be honest and transparent that when people  donate it's not going to be tax deductible um unless they donate after you're at least  Incorporated in your state and then once you get your federal tax exemption it  would be retroactively tax exempt but um just make sure that you're being transparent  make sure that you're checking your non-profit laws around um collecting money personally  for a cau

se there is a possible risk of the government thinking that that is your personal  income and trying to tax you on it so just educate yourself on those rules and be honest and  transparent and you can collect money to do your startup costs before you have your legal  status important final step of fundraising phase thank your donors shower them with gratitude these  are your first donors your first supporters it takes a lot of faith and um and just graciousness  to support at an early phase so m

ake sure that you have their contact information that you're sending  them thank you notes that you're keeping them up to date on the progress of getting started  they want to go on the journey with you so make sure that you are staying in touch with them  also all right so you started in Phase One doing your research and assembling or thinking about  who might be on your initial board of directors in phase two that was the big step that you've got to  do if you're starting a non-profit with no

money and that is raise some money so at this point  you've got just enough money to get your startup costs in order now it's time to do phase three  the actual legal steps of starting a non-profit step one of this phase is if you didn't already  assemble a board of directors at this stage you do need to do so because filing your paperwork is  going to require you to have a board of directors how many board members you need will vary by state  or region so be sure to look up the rules for your a

rea in terms of thinking through who to recruit  for your board like I said before you want to think through who's going to have the right skills  to get you started so if you need someone with fundraising experience try to find that someone  with marketing experience to get the word out some marketing professional might be a good board  member I have lots of other videos on recruiting boards and board of directors so be sure to check  those out too the next step is you've got to have a name for

your organization and it's possible  that earlier on in this uh experience you already came up with a name if so off them you do need  to make sure that that name is not already taken by any similar entities in your area so make sure  you do a name check with your secretary of state um or applicable Authority in your region to  make sure that you're not duplicating the name of an existing entity next you've got to write  your bylaws the bylaws are basically a governing document it's I'm going t

o lay out all of the  rules for how you're going to elect your board members and officers and govern the organization  develop policies what percent of your board needs to vote for something to pass stuff like that you  should be writing these with your newly assembled board of directors so that everyone's on the same  page that will save you some headache later then you want to have your first board meeting  at this first board meeting there are many things you could talk about like the strateg

y  for the next year or so or your fundraising goals after this but the main thing you want to  focus on is officially voting in your bylaws and recording that vote in your organization's first  meeting minutes in the United States the IRS does require you to keep board meeting minutes in case  of an audit they will look for your board meeting minutes so make sure that you are recording at the  very minimum the vote and who voted and and how many voted and did the vote pass all that stuff  once

you've got your official bylaws voted in you can start to file some of your formal paperwork  in the United States this will most likely start with getting incorporated as a non-profit in  your state so you're going to need to fill out your Articles of Incorporation there are some  great templates online or official forms for your government online once you get Incorporated  in your state you're not done yet you are not an official tax-exempt non-profit yet then you  have to file for your federa

l tax exempt status most people are filing when they start a  non-profit they're they're aiming for the 501c3 tax exempt status which is the most common  status for public charities there are other tax codes too that you can look up to see if they fit  your organization and its Mission and structure better but that is the most common one so you're  going to fill out that paperwork you can do it without a lawyer but many choose to hire a lawyer  or use some kind of legal service just for peace of

mind because the IRS can and sometimes does  reject applications for non-profit status all right that's it it's basically like the process  for starting a non-profit when you do have startup funds except you've just got a fundraise and I  hope that the road map I kind of talked through helps you think through how would you start to  build an audience just get those first donors in the door so that you can raise just enough  to get that tax exempt status or more if you're lucky I'd love to hear

what you think if you are  someone who started a non-profit starting with zero dollars to apply to your launch tell your  story in the comments below share how you did it any tips for the folks watching here today I know  we'd love to hear from you as I mentioned before if you are in the process of starting a non-profit  or developing a long-term sustainable fundraising plan check out my online courses and resources  at my website foundertofulltime.com I also have a fun little newsletter that I

do regularly  sending out resources and tips and sometimes funding opportunities for folks on my mailing  list who want to make a difference in some form or fashion you can subscribe to that newsletter  at the link below and opt out anytime you need finally I do have a group on Facebook  called Change the World or Bust we've got 4,000 people from around the world in there  now who are all in there sharing how they're making a difference and helping encourage and  provide feedback to others too s

o come on out and join us change the world or bust is that  name of the group that's all I have for you today once again I hope that you found this  useful and helpful don't forget to give it a thumbs up subscribe to my Channel all that  good stuff and I hope to see you next time bye