Many people feel the urge to help out by volunteering time or income. For those whose charitable itch cannot be scratched via conventional methods, there is the possibility of operating your very own charitable foundation. It should be noted that this requires a substantial investment of time and money. It is therefore not an endeavor to be taken lightly, but for those fueled by a zeal to help their chosen causes, creating a charity can be the best way to make a difference.
The first serious consideration is money. Expect to be working for free or for a considerable pay cut during the initial phases of your charity. It is not unusual to have to live off savings for periods of a year or more.
Additionally, even after many years of successful operation, salaries at non-profits can be quite a bit lower than in the private sector. This is less true for the largest organizations, but the general trend is that the cause comes first, so be sure you are financially prepared. Time is also a factor to be considered. Starting and operating a charity is time-consuming. Anticipate long hours devoted to the various functions of supporting the charity. If you are still reading, it is likely you are comfortable with the time and financial commitments required and have the drive to achieve success. In fact, you probably already have a cause in mind.
Your next step then should be to craft a vision statement. This is your idea of what you hope the charity will accomplish. What inspired you to create this charity, and what do you see it achieving into the future? It is appropriate to be somewhat vague because this is just a broad overview and introduction to your cause. The mission statement is where you break down the specifics of: whom the charity is benefiting, what exactly you will be doing and how this is going to achieve your vision.
Choosing a Name
At this stage a name should be chosen. Choose a name that people can relate to. It should be something personal, memorable, and something that will support your brand and vision. This is especially important because a properly chosen name can help differentiate your charity from the 1.5 million other non-profit organizations in the United States. Getting noticed gets donations. You are now ready to get down to business. Establish a five-year plan of operations. Decide who is going to do what and how it will be done. A useful suggestion for before commencement of operations is to have enough cash for the initial capital outlay in addition to a year's worth of operating funds.
You should also decide on a funding source. Most charities raise funds through private donations or seek out government and foundational grants. Worth looking into is the concept of "social entrepreneurism" where instead of going to traditional fundraising sources, as above, a charity instead sells a product or service with the proceeds going to the charitable cause.
A physical workplace may or may not be useful for you. Rent can rapidly increase overhead, but donors and governments prefer numbered addresses instead of P.O. boxes. In the early stages, there is really no reason your home would not suffice as a base of operations.
Get a Lawyer and an Accountant
You should also get a lawyer and an accountant who are both well versed in advising non-profit organizations. They will assist with drafting articles of incorporation required to register your charity with your state. In addition, they will be useful in registering with the IRS.
Register and Get a Board of Directors
Finally, register with your attorney general in order to be allowed to solicit donations. Finally, serious consideration should be given to the composition of the board that manages the charity. While often overlooked, having a solid board of directors will help to keep your goals in focus and prevent any unfortunate legal ramifications. The size of the board will vary with need, but be sure to constantly evaluate its performance and seek out those with experience running non-profits.
The Bottom Line
Starting a charity requires an immense dedication of time, passion for a cause, and business savvy. You may be setting out to fund an altruistic organization, but good intentions won't pay your bills, so be sure you're financially prepared to live on a small income for a long period of time.
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