The document provides information on starting a non-profit organization, including common myths about non-profits, the basic steps to start one, and types of non-profits. It discusses that non-profits are not prohibited from making a profit, addresses the size and scope of the non-profit sector, and explains that non-profits work in many areas beyond just charity. The document also provides tips on program development, applying for 501c3 tax-exempt status, and alternative ways to pursue social goals besides starting a new non-profit.

1. STARTING A NON-PROFIT

2. Marc Parham, Radio Show Host, MC/Speaker, Infopreneur
2

3. Myths and Facts about Non-Profits
Understanding of the basic steps to start a non-profit
Understanding of the different basic types of non-profits
Understanding of what the 501c3 or Tax Exempt status
means
Understanding the important factors of Program
Development
Other options to accomplish the same goals and objectives
What You Will Get From This
Workshop!

4. Non-Profit Myths

5. Myth #1 -- Nonprofits Cannot Make
a Profit

6. •Nonprofits are not prohibited by
law from making a profit, only
from distributing their profits to
those who control the
organization (known as the non-
distribution constraint).
Myth #1 -- Nonprofits Cannot Make a
Profit

7. • There are approximately 1.4 million
nonprofits in the United States, of
which more than half -- about 777,000 -
- are charitable.
• Collectively, nonprofits employ about
11 million people, or 7 percent of the
U.S. workforce.
• This is more than the number employed
in most for-profit companies
• In New York City alone, one in seven
people works for a nonprofit.
Myth #2 -- Nonprofits Are Small in
Number and Size

8. Myth #3 -- Nonprofits
Deal With Charity

9. • Did you know that the National Football League is a
nonprofit? So is the PGA, (Professional Golf Association) as
well as Public Relations Society of America) PRSA.
• The nonprofit sector consists of all organizations in
American society that are neither government nor
business (clarifying an example just given, NFL teams are
businesses, but their association is a nonprofit).
• Nonprofits range from day-care centers and neighborhood
churches to major research universities and metropolitan
hospitals.
• Their one common characteristic is that they have
qualified for exemption from federal income tax under the
Internal Revenue Code.
Myth #3 -- Nonprofits Deal With
Charity

10. Myth #4 -- Gifts Account for
Most Nonprofit Revenue

11. • Gifts are not the primary source of
income for charitable organizations,
let alone nonprofits in general.
Nonprofits rely on dues and fees.
• For charitable organizations in
aggregate, gifts account for only 25
percent of their revenue.
• About 38 percent comes from dues
and fees, 30 percent from
government grants and contracts,
and 7 percent from investment
earnings.
Myth #4 -- Gifts Account for Most
Nonprofit Revenue

12. • The person that started the non
profit can be fired from the non-
profit (FACT OR FICTION)
• The Executive Director of the Non-
Profit is also the CEO of the Board
(FACT OR FICTION)
• The role of the executive board is to
manage the day to day activity of the
non-profit (FACT OR FICTION)
Fact or Fiction

13. Questions to ask before
starting a non-profit

14. • Question 1: What is the cause or need that I want to
address?
• Question 2: How much passion do I have about the
need that exists?
• Question 3: Do I consider myself a leader?
• Question 4: Have I checked to be sure there is no
existing organization that is working to address the
same need or the same people I want to help?
8 Questions To Ask Before Starting A
Non-Profit

15. •Question 5: What research have I done on the
sources of funding for my dream or vision?
•Question 6: Who will help and support me?
•Question 7: Where will my organization meet in
the initial stage
•Question 8: How much money can I personally
afford to spend on starting my non-profit?
8 Questions To Ask Before Starting A
Non-Profit

16. • Public Charities and Foundations
• There is no real difference between a public charity and a public
foundation
• If the non-profit is a 501(c)(3) exempt organization, they will have
a "determination letter" from the IRS
• Public charities and foundations must receive at least one-third of
their support from the general public, including gifts, grants, and
fees.
• Not more than one-third of their support can come from
investment income.
Types of Non-Profit

17. •Private Foundations
•Private foundation normally has one main source of
support or revenue
•A private foundation might be started with a large
endowment from a family and never solicit support
again
•Private foundations have less tax benefits than
public charities.
Type of Non-Profit

18. •The purpose of the 501 c 3 status is for your
organization to receive Tax Exempt status
from the Federal Government.
•It will provide your organization the ability
to receive tax deductible donations,
discounts and the prestige of having the
status.
501 c 3 Status? Do you Need It?

19. •Do you consistently make a financial surplus (i.e.
a profit)?
•Do you have donors who want a tax deduction?
•Does your group wish to apply for or receive
grants?
•Does a fundraising program require 501(c)(3)
status?
Are Your Ready for the Status?

20. •Complete the 28 page 1023 application from the
IRS
•Requires an application fee $400 - $800
depending on the size and annual reporting of
the organization.
•Requires the development of organizational
documents that must be sent in with the
application
How to Apply for the Status

21. •Hire a consultant, attorney or CPA
•Use a Online service
•Do it yourself
3 Ways To Form a Non-Profit

22. 1. Reserve the Organization's Name
2. File Articles of Incorporation
3. Publish Intent to Incorporate
4. Apply for the Federal Employer Identification Number
5. Prepare Organization Documents
6. Conduct an Initial Meeting of the Board of Directors
7. Apply for Federal Tax-exempt Status
8. Apply for Georgia State Tax-Exempt Status
9. Apply for Georgia State ID Number
10. Register as a Charitable Organization
11. Obtain Business License
11 Steps to Forming a Non-Profit in
the State of Georgia
Reference: Georgia Center for Nonprofits, Starting a Nonprofit Organization
in Georgia,

23. TASK FEES METHOD
1 Company
name
reservation
$25 http://www.sos.georgia.gov/corporations/name_reserve.htm
2 File the
Articles of
Incorporatio
n
$100 https://corp.sos.state.ga.us/Business/NonProfitCorp/Default.aspx?XID=b33b397f-9f54-
492c-b3ad-71862b861e9d
Transmittal Form 227.
3 Obtain an
employer
identification
number (EIN)
$0 https://sa1.www4.irs.gov/modiein/individual/index.jsp
4 Publish
Intent to
Incorporate
$35 NOTICE OF INCORPORATION
5 Develop
Organization
al
Documents
Articles of Incorporation
Corporation By-laws
Business Plan / Program Development Plan
Organizational Narrative
6 Conduct
Initial
Meeting of
the Board
MEETING
7 Complete IRS
1023 forms
http://www.irs.gov/pub/irs-pdf/f1023.pdf
1023 Filing
fee to IRS
$300 FEE
8 GA State
Exempt 3065
form
$50 https://etax.dor.ga.gov/inctax/2008_forms/TSD_Exemption_from_Georgia_Income_Tax_3
605.pdf
9 Apply for
Georgia State
ID
Number/DOL
PDF FORM
1
0
Obtain
Business
License
$150 CLERK OFFICE
CHECK LIST WITH LINKS
This checklist
has all the links
to the sites to
register your
non-profit

24. Are still sure that you want to
start a non-profit?

25. •Social Entrepreneurship
•Volunteer
•Work for a Non-Profit
Other Ways To Help

26. • Social entrepreneurship is the work of social entrepreneurs.
• A social entrepreneur recognizes a social problem and uses
entrepreneurial principles to organize, create and manage a venture
to achieve social change (a social venture).
• While a business entrepreneur typically measures performance in
profit and return, a social entrepreneur focuses on creating social
returns.
• Thus, the main aim of social entrepreneurship is to further social and
environmental goals. Social entrepreneurs are most commonly
associated with the voluntary and not-for-profit sectors,[1] but this
need not preclude making a profit.
Social Entrepreneurship

27. PROGRAM DEVELOPMENT
Programs are
Funded…not the
Non-Profit…..

28. • In order to get funding and implement a successful program
you must develop a sound program plan.
• This development plan, will layout the important aspects of
your program.
• The development of this plan will help you think through
your ideas and make sure that you have covered that things
that will help make your program successful.
Developing a new program for your
non-profit?
DEVELOP A GOOD PLAN!

29. •Bad program development is the major
reason for programs to lose funding.
•By following the steps below you will be
able to develop the basic components of
your program.
PROGRAM DEVELOPMENT

30. • What is your program idea?
• You must be able to describe your program in
simple terms that will give the reader a good
understanding of what you want to
accomplish.
• What issues are you trying to address?
• Give a good description of what the issue is
that your program will address.
• Remember to keep it simple!
STEP 1 - Program Overview

31. •What do you hope to
achieve with your program?
•What do you plan to
accomplish.
•Who will your program serve
and why do they need it.
STEP 2 - The Statement of Need or
Opportunity

32. •How are you going to do what you
say? What are the goals and
objectives of your program?
•Goals refer to things that you
want to accomplish.
•Objectives refer to the outcomes
of a program.
•Be as specific as possible
STEP 3 - Program Goals and
Objectives

33. • How will the success of your program be measured?
• How will you be able to show how well your program is
doing?
• Create activities that are measurable.
• For example you can show how many people participated in
your program by simply counting the participant sign-up
sheets.
• Define the method of how the activities will be evaluated.
• Pre and post tests, surveys and questionnaires, observation,
focus groups, and discussions are some methods of
evaluation.
STEP 4 - Evaluation Plan

34. • Who are you and why can you be successful with this
program?
• Describe who you are by creating an Organizational
profile.
• The Organization profile will give the basic
information about your organization like;
• Business structure, past experience and the management
team.
• Be sure to include the information on your collaborative
partners.
STEP 5 - Organizational Information

35. •Make sure to create a program budget that will
show all your cost and expenses.
•It is also good to include the following
information;
•Resumes of key personnel, a Project plan, Letters of
support, Cooperative agreements and any other
pertinent information.
STEP 6 - Attachments

36. •Take the time to do good program development and
you will create a solid roadmap for a successful
program.
•Just work on the plan step by step and don’t be afraid
of asking questions that you can’t answer.
•Once you have the questions there is always a place to
get the answer.
SUMMARY

37. •Foundation Center Atlanta
•www.foundationcenter.org
•Georgia Center for Non-Profits
•www.gcn.com
•CapBuilder Network
•www.capbuildernetwork.com
Where to get help

39. 39

40. 40