How To Start A Nonprofit
Nonprofits exist in response to community needs. Nonprofits provide the services and attractions that make communities livable, vibrant, and desirable.
Critical considerations before starting a nonprofit
What is the purpose of the nonprofit?
What is the need or issue you want to address?
What other organizations are already working on the issue? And have you met with them?
Have you researched best practices locally and nationally?
What is your theory of change?
Have you done a needs assessment?
Does a significant portion of the community support the creation of a new nonprofit?
Where will the funding come from?
Have people committed to making donations if the nonprofit gets the letter of determination from the IRS?
Are you aware that many foundations will not give grants/contracts to nonprofits less than three years old? Without a track record, is there research to show that your approach is effective?
Additional Considerations
Have you considered all the work involved in managing a nonprofit?
In addition to working on the mission of the organization, you will also need to raise funds to do the work, manage the funds, work with a board of directors, employees, volunteers, and comply with all reporting requirements.
Running a Nonprofit, by National Council of Nonprofits
Accepting Contributions
To accept donations online or via credit card, your organizations needs to be in compliance with Payment Card Industry Standards.
Many nonprofits find it easier to work with a credit card processor to let them handle the compliance and security issues.
Your organization needs to register in any state where you want to solicit donations.
Steps to Establishing a Nonprofit
1. Incorporate as a nonprofit corporation with the NM Secretary of State
2. Apply to the IRS for tax exempt status
Before applying to the IRS, register with Pay.gov
For revenues under $50,000 for the first three years, use Form 1023-EZ
Otherwise use Form 1023
3. Register within thirty days with the New Mexico Department of Justice, Charities Division
Additional Resources
How to Start a Nonprofit, National Council of Nonprofits
Conflicts of Interest, National Council of Nonprofits
