No Funds, No Problem: Starting a Nonprofit from Scratch

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

  • 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.

  • 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.

  • 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.