No Funds, No Problem: Starting a Nonprofit from Scratch

We all know that money doesn’t grow on trees. If it did, starting a nonprofit would be as easy as planting a money tree. In a world where money doesn’t come quite so easily, starting a nonprofit with no cash can be a challenge. Luckily the task isn’t impossible. These steps will help you determine the needs of your nonprofit and solutions to finding the money necessary to achieve your mission.

What You Need

It’s always good to know what you’re up against before diving into a challenge. Before you file for 501 (c)(3) status and tax exemption, you’ll need to pay a fee that is dependant on the size of your budget. Since your nonprofit is starting out, the fee shouldn’t be outrageous. If your operating budget is $10,000 or less, the fee will be around $400.

Your organization will have approximately 15 months to file a form 1023, which is a form that assesses your nonprofit’s structure and programs. The form is necessary for 501 (c)(3) status. The standard fee for most nonprofits starting out will be $850. Additionally, to gain 501 (c)(3) status you must be incorporated, and most states charge a fee when you file for incorporation. Once you have filled out the necessary paperwork, it is important to know what you’ll need to file at tax time each year. You might want to review this list of IRS forms for exempt nonprofits.

Trust Your Mission

Gaining trust and supporters is often put on the back burner until organizations can raise the initial funds to start their nonprofit. Don’t make this mistake or you will end up elongating the process of becoming an official nonprofit.

Trust that your mission can help you earn money by connecting on a personal level with possible contributors. If they know and understand your goal, they will be more likely to help you achieve it. With more volunteers and donors by your side, the process of becoming a nonprofit will seem like less of a burden and more like you already have nonprofit status.

Use the Buddy System

Everything is better with a friend by your side, or in this case another nonprofit. Grant money seems like an easy and obvious option for a nonprofit that is still new. But grant money is not as easily attainable as you might think; especially if you have yet to build up a reputation. Look for a similar organization that can help you get started with finding grants. They will have a list of organizations that gave them grant money that would likely be willing to give to your nonprofit since your missions are similar. The government can also be a great source for nonprofits that need financial assistance. Websites like www.grants.gov and www.usa.gov offer places to search for nonprofit grants and funding. From these websites, you can specify which state you’ll be starting your nonprofit in, and find specific funding at the state and local level for your organization.

Finding another organization with a similar mission can be helpful in a variety of other ways besides finding grants, with tips and insight into everything you’re about to be doing. They’ve been through everything already, and should be able to guide you. The common interest in your goals will be an instant connection among organizations, meaning you’ll be on the same page.

Don’t focus so much on finding money and then starting your nonprofit. Instead, build your nonprofit as you try to gain 501(c)(3) status. If you’re passionate about your cause and people know it, they will in turn be excited to help you. But like we said, money doesn’t grow on trees. So, how did your nonprofit handle financial problems when you were starting out?

  • http://www.pickensfoundation.org Jamie Reynolds

    I want to start a foundation dedicated to my grandfather because he was the first person in my family who noticed there was something wrong with my right leg when I was about 22 months old and he demanded to my mother to get me a doctor immediately. My problem today though is that I do not have money to get it started and I really would like to get one started so more research becomes available to older people. Very little is being done for anyone that suffers from cerebral palsy and if nothing isn’t done, soon this will be one disorder that will forever be neglected. It is so not fair.

    • http://www.facebook.com/caseysheakos Casey Shea Lane

      Once I finish my bachelor’s degree (this fall), I plan to get a graduate certificate in non-profit administration and hope to find a way to start my dream of beginning a non-profit for families with children or parents with disabilities. I was fortunate enough to experience taking care of my ill mother and physically disabled brother throughout childhood and I can’t think of anything else I rather do for a living than to help families like mine. I eventually want to be able to offer advocacy, school and medical liaison, case management, and mental health/ therapy services. Of course, this is still a long ways off (I’m just 21, and I’ll definitely need to get my Master’s and License as a Social Worker to be able to perform some of these things), and of course I will have to have the right time, funds, and location (I’m an Army wife), but if you or anyone who sees this are interested in becoming a part of this project in the future (Board of Directors, general ideas, donations, actual employment, etc), I definitely need the support!

      • Jerod Bagwell

        Would definitely be interested In helping to raise funds. My son was diagnosed with PDD-NOS in Sept of 2014. Been thinking of trying to start a non profit for families dealing with autism and developmental disabilities. I’m planning a 400 mile bicycle ride next summer to raise money. If interested email me at blacktoyota4by4@yahoo.com

      • Ashley Ahrens

        hello! just wondering how long did it take for you to get your certificate and could you do it online?

        • suchi

          hai casey..even i have similar views and thoughts too..nd even having same doubts in my mind as urs
          …soo i hope u can help me out with this….

    • Carolyn Di Donato

      There are many foundations for cerebral palsy my cousin now 42 was the post child several times. You should research foundation for cerebral palsy. Research has came a long way he has stood up for the first time in 40 years last summer. So there are great foundations, and research in that area. Is there something your having trouble getting help with?

  • Shannon

    I want to start a foundation for kids who parents need a little break from dealing with just life issues that we all go though with kids who have problems a place where your kids can come so you can just get a little break for parents to have a little time for parents to go shopping take a walk even if it’s just I want to have a long bath just to have a few mintues for you

    • Cornelia Buchanan

      Hi Shannon….I have a similar goal as yours but I would like to focus on helping single mothers financially. Initially I’d have to start with helping out with a bill or two but my vision is to offer temporary financial relief, at least until they are able stand independently. Right now it’s just a vision until I can come up with the resources. I pray you are able to implement your plan. God Bless you.

      • Bridgette Williams

        Hi Cornelia, I have a similar goal and vision as yours. My vision is to help single parents along with the elderly. As a single parent on disability I know the struggles. Also as a daughter of a 90yr old mother and knowing other elderly blessings I know some of the struggles they deal with and not wanting to lose their independence. I’m writing my vision according to Hab 2:2-3 and standing on faith for the manifestation of my vision, every financial need, status, paperwork, volunteers, help that may be needed to come forth in the near future. May God bless you and your vision bringing it to light.

        • shannyn

          Hello. Bridgette my name is shannyn and i also want to start a non profit. Homeless shelter for woman and children while helping them build closer relationships find employment go back to school, and stable housing. I love you’re ideals.

          • Kamia Johnson

            Hi Shannyn and Bridgette, I would like to do something similar. I want to start an organization that will house single parent families and give them a support system, childcare, while also providing education, job skills and helping them become self sufficient.

      • Monica

        My goal as well… I lost my job an I faced major hard times went to various organizations for help, they told me in order for them to help I have to pay a large portion before they submit any monies., my children was out of power for days…I felt lost alone an afraid.. the town I live in has failed me.

        • Sabrina

          Hi Monica,
          My family and I recently experienced this same situation this past week. I had to contact the organization that actually funds the Energy Assistance program to get help. Because of this happening I am even more dedicated and determined to find a way to help families that need that extra voice.

    • Terri

      Shannon, you might find it helpful to contact the Vanessa Behan Crisis Nursery here in Spokane, WA. It’s very similar to what you describe in what it provides, and I’ll bet they could give you a lot of great information. Good luck!

    • Kim

      I have spent the last 10 years being a professional parent, raising children in out of home placement. Many of these children could have returned to their homes if the parents could have learned some new parenting techniques. I would like to open a non profit to teach parents how to parent. The sad truth is so many families are torn apart because of not having the skills to get the best out of their child. I would like to cut down on the amount of children being raised outside of the home and give the parents the tools to keep their families together.

      • Francesca Murch

        I absolutely love you idea as well as Shannon’s idea for a non profit. I completely agree with your views. I have seen to many parents that are overwhelmed and don’t know who to turn to for help. It seems that in our society if you ask for help then your seen as a “bad parent”. Many of these parents will not talk to state organizations for help because they are afraid they will get their children taken away or they will be deemed unfit. I would love to start a non profit in OKC Ok for families that are low income and have been involved in the DHS system. I would love to offer “real” parenting classes. How to deal with children with behaviors, mental health issues and disabilities. How to cope and manage with the issues of a family that was separated due to mental health issues, and or drug/alcohol addictions. To offer reunification therapy between child and parents. To break the cycle and unify family units in a healthy supportive environment.

    • shannyn

      Hello shannon. my name is also shannyn and i to am interested in starting a non profit. My vision is for homeless shelter for women and children in my city there is a great need.

  • Annette Simmons

    I need advice…I am trying to start up a place called My Forever Home for keeping high kill shelters from killing animals….how do I do this?

    • ginoue16 .

      I am trying to start a foundation for Haiti specially for children that parents have no Income . To focus on their talents and give them opportunities that they wouldn’t have normally . Teach them about health & all of the diseases that existed around the world.

    • Jean S

      Annette, I have the same goal. My main focus is on the rehabilitation of semi-feral cats, and colony management. Strays, for seniors, and disabled.Companion pets. Where are you located?

  • kerby

    I want to start a foundation for kids with autism I have 2 kids with autism they inspire me to help kids with autism by providing gift for Christmas, therapy, and support there parents we as parents to need to stand up for better our children they are different god made them for a reason I want to help kids with autism find there passion, and love who they are I need help please help me make a different in this kids life.

    • Beyan Flomo Pewee

      My name is Beyan F. Pewee from Liberia and i run a register non profit
      in Liberia called Youth Coalition For Education (YOCEL). YOCEL is a nonprofit, non-political,
      non-governmental, non-religious and a youth oriented
      organization with focus on campaigning, advocating and building the capacity of
      young people to stand and raise their voices for quality education. YOCEL is
      committed to the fulfillment of quality education for every child without discrimination.
      YOCEL is also committed to empowering youth and providing them the opportunity
      to be change makers. We take serious our responsibility to advocate, lobby and
      implement projects and programs that seeks to advocate and promote quality
      education, gender equality, youth empowerment and entrepreneurship.

      but i am looking for partners that i can work with to
      establish branches around the world like the US and other interested
      countries ……here is my email if you are interested : f.pewee@gmail.com or skype me
      beyan.pewee2

      visit us @ http://www.yocelliberia.wix.com/yocel-liberia

  • Rhonda McGhee

    “I am very passionate about hair and the overall beautification purposes of my hobby.”
    Rhonda McGhee-

    Hi my goal is to one day start an organization with this mission: “To beautify the community one head at a time”.
    By providing services to families in need, whether that is single parents like me who would benefit from my organization due to little too no income, including the many homeless people who are in and around our community, because I have been there too. Lets no forget about those kids who are waiting for a forever home, and the forever faithful senior citizens, the “Whole Community”, simply starting by beautifying one person at a time, one head at a time. Helping them to feel better about themselves and help motivate them and give that drive to be the best, they can be in and around their small community, city, state to maybe one day I am a self-employed disability Navy veteran with a degree in Business Administration, Master Cosmetologist/ Instructor five year old disabled daughter dealing with life issues seem unfair, when we get a bad break or things don’t go our way, but this is why I keep pushing forward because I know that” He is a rewarder of those that diligently seek him”. Desperately trying to build a new life and be financially stable for me and my baby is an expectation….because failure is not an option. That’s why I want to give back to the whole community one head at a time.:#thewholecommunity

  • Crystal Reed

    I am wanting to start an animal rescue in my community as we do not already have one and hope to help the animals who need it but not sure how to get the funding for it. Any advice is greatly appreciated!

    • http://nonprofithub.org/ Lyndsey Hrabik

      Crystal, please see my comment above. If you have more specific questions please email info@nonprofithub.org! Hope that helps.

  • Kevin Barnett

    President and founder of If I Die Young – Non Profit Organization
    dedicated to suicide prevention, battling addiction, and self harm.

    Looking for any legal advice / funding to file our 501C3 status.
    If you have any advice, would like to support us in any way – that would be awesome!

    -Kevin

    ifidieyoungco@gmail.com

    http://www.ifidieyoung.org
    http://www.facebook.com/ifidieyoungclothing

  • Lyndsey Hrabik

    Love all of the aspirations here! If you want to find out about funding for your organization and how much it costs to start an NPO, begin here—http://www.nonprofithub.org/how-much-does-it-cost-to-start-a-nonprofit/.

    In February, we’ll have an entire course on our Nonprofit Hub University to take you from point A (the idea for a nonprofit) to point B (I’ve founded a nonprofit!). Check out nonprofithub.org/nhu for that. If you have specific questions, feel free to ask!

  • tequiladm1

    This was a great article! I so needed this because I am struggling in raising money for my daughter. She is 10 and she came to me in December wanting to start a charity. I have created a gofundme account but it’s hard when people around you don’t want to see you do something good for your community. Oh the charity fund is http://www.gofundme.com/tpromise just in case anyone wants to help. Thanks!

  • Brad Lev

    Im looking for some partners to start a new non-profit to help raise funds for local organizations by partnering with local bars & restaurants – let me know if anyone is interested…

  • Linda

    I have an adult son that have autism here in SC. There is no place in my small town for adults with autism to go, and just have fun. Like maybe have a dance, or interact with other adults with autism. These adults are isolated at home most of the time. It is not fair. No one seems to care much about them. I want to open a place where adults with autism in my town will have a place to go each day and be alive! Have staff to take them on outings. Take the men to get haircuts. The ladies to beauty shops. Have their nails done. Every human spirit have something to offer to the world. These beautiful beings should not be shut away with shame. I know nothing of how to start place such as this. Can I get some help please. These beautiful people’s lives are being wasted.

  • AOD
  • Anthony Manna

    My search ended up bringing me here and seeing all these comments for great organizations really gave me hope. I’d like to start a foundation to help children and teens (under age of majority) with problems at home. In most cases these young men and women can’t stand up for themselves because of age, misunderstanding, and fear of what may happen if they do try to speak out. I’m talking about mental, and physical abuse from parents or guardians. Anyone who’s dabbled in psychology knows about the disorders that develop in minors who’ve had troubled childhoods.

    There are options in many cases for these people to take care of the issue themselves. Say a school counseler, or telling the police. However, this can lead to more problems as soon as the parents hear about it. I’ve grown up with people who’ve been refused food for days, or have been so berated at home they can’t sleep at night. You can imagine how this affects the rest of their lives.

    My ultimate goal is to have a team of counselers, therapists, lawyers, and investigators all working on behalf of those who’s voice would otherwise go unheard, and give them a chance before it’s too late.

    I’ve known too many people who’ve taken their own lives because they saw it as their only way out, all before even reaching adulthood. It’s my dream to offer another option. Its a long way off but I would happily devote my life to making tomorrow’s youth feel safer, and help them have a vibrant and fruitful childhood instead of fearing going home and turning to much more drastic options.

    • Francesca Murch

      I love your idea Anthony. I would love to expand on that and unify the family’s. (keeping in mind only the families that are able to be unified) I understand that many times the abuse is extensive and families can’t be unified through therapy, mental health medications, or addiction services. I do know that many times abuse begins because no one addressed these issues. Also because many of these parents are scared to ask for help or admit that they are overwhelmed, addicted or stressed. So if these issues are addressed and a family can be reunited.

      • Anthony Manna

        That’s an excellent idea. It would really help the family as a whole if that was a possibility. Much more so than the kids being put into foster care in some situations. Most children and parents still have a deep love for each other and the separation may do more harm than good. I completely agree and thank you for your support and thoughts :)

        • Francesca Murch

          Where are you Anthony? I would love to hear updates on your venture. My family and I already have a non profit established. Now it’s time to fundraise and market the idea to the community.

          • Anthony Manna

            I’m actually in Colorado. But possibly relocating to Florida for work. I’m glad to hear you have your non profit established. I would love to hear how you did it all.

  • Tristan Williams

    Hi I’m Trying to start a program that helps anybody that’s in a struggle with drug addiction or just needs to just reminded that they are worth having around on this earth.
    I come from a small city called Port Orchard, Washington. And over the past couple of years I’ve had multiple friends overdose from there drug addiction and pass away. not only that but also suicide.
    I too once had a extreme struggle with drug addiction but was able to overcome this by having somebody simply be there for me. And showed me Love that I had forgotten all about..
    Overcoming this obstacles is within all of us who have or are struggling. I feel like Too many young adults fall through the cracks and are forgotten about because of the wrong they have done.
    I’m very well known in the community and feel that me and some select volunteers can really provide a personal outreach to these individuals.
    This of course is only an idea and I don’t even know if I can qualify for help with something such as this. Some insight is all im asking for and also ideas. I’m sick of losing my friends and loved ones to addiction and being alone. Just simply giving some buddy a safe place to rest and kick drugs and taking them out to eat, hike, to a,a, and just simply be there. Like I said this is a brand new thought to me and im not even sure how to began. so please help me and let me know what I can do…
    I’m not looking to make any money or anything.
    All I want is to do anything in my power to help.
    Thanks for reading

  • Vivian Palmer

    I am a nephrology nurse with over 27 years of experience. I would like to start a nonprofit that provide relief to caregivers and families of individuals that are performing dialysis treatment at home. Home do I start this process in Georgia?

    • http://nonprofithub.org/ Lyndsey Hrabik

      Vivian—For information on how much it takes to start a nonprofit, check out this free guide—http://www.nonprofithub.org/how-much-does-it-cost-to-start-a-nonprofit/.

      Besides that, you can find articles on Nonprofit Hub or check out our entire Nonprofit Hub University course on starting a nonprofit here—nonprofithub.org/nhu.

      Wishing you great luck!

  • shannyn

    HELLO EVERYONE MY NAME IS SHANNYN LOVE AND I AM INTERESTED IN STARTING MY OWN NON PROFIT IN MY LATE MOTHERS NAME . TANCIE MYMOTHER DIED OF CANCER WHEN I WAS 11 IVE BEEN THROUGH THE WORST SINCE SHE LEFT. SEEMS LIKE. I REMEMBER HAVING TO STAY IN MANY HOMELESS SHELTERS AROUND MY CITY I KNEW WHAT I DID AND DID NOT LIKE DURING MY STAY I FEEL LIKE NOW IS MY RIME TO GIVE BACK I FEEL LIKE THIS IS WHAT I WANT TO DO FOR THE REST OF MY LIFE I HAVE BEEN A MOM TO MY SIBLINGS AND THEY ARE OKAY SO TANCIELOVES HOMELESS SHELTER WILL ASSIST IN PROVIDING HOMELESS WOMEN AND CHILDREN EMERGENCY SHELTER JOB PLACEMENT TRANSPORTATION SKILL BUILDING WORKSHOPS AND MUCH MORE. WE BELIEVE THAT THIS WILL HELP REBUILD OUR CITY BY DECREASING BLIGHT BY FIXING THE ABANDONED HOMES AND EXPANDING THE TANCIELOVES HOMELESS SHELTER PROGRAM THIS WILL INCREASE THE NUMBER OF STABLE FAMILIES IT WILL ALSO HELP BRING TH COMMUNITY TOGETHER. IM ASKING FOR ANY ADVICE HELP RESOURCES IDEALS ETC THANK U ALL

  • Cathrine

    How do you start an International non-profit organization with a 501c3 status in the US?

  • Deaf Talent Guild

    How do I start a 501c6 professional association with a membership consisting of talent? Where can I find funding for a professional association like this? Thank you for any tip or suggestion you offer.

    • http://nonprofithub.org/ Lyndsey Hrabik

      The IRS has information on guidelines and things you’ll need to start a 501(c)(6). Check that out here—http://www.irs.gov/Charities-&-Non-Profits/Other-Non-Profits/Business-Leagues