Information For Start-Ups:
If you are seeking to start a new nonprofit, we recommend that you do the following:
- Read the following from Texas C-BAR’s Legal Resource Library:
- Forming a Nonprofit Tax-Exempt Corporation in Texas, 2015 Edition: Provides information on what to expect when applying for 501(c ) 3 tax-exempt status and step-by-step guidance on how to prepare for filing IRS Form 1023 (the Application for Recognition of Exemption under Section 501(c) (3) of the Internal Revenue Code).
- Business/ Corporate Law Section: Provides guidance on pre-incorporation, incorporation, nonprofit management, and fundraising matters.
- Nonprofit Legal Toolkit, 2011 Edition: Provides guidance on governance matters including how to organize, run, and manage a nonprofit’s operations.
2. Do market research:
– Will your organization serve an unmet need?
– Are there other competing organizations?
– Will it duplicate part or all of an existing program within another nonprofit?
3. Develop a mission statement.
4. Develop a detailed plan for your programs and activities.
5. Research and find existing organizations that you can collaborate with.
6. Recruit qualified people to serve on your board of directors.
– Texas law requires a minimum of three directors/board members at all times.
– Texas C-BAR recommends that you maintain seven directors/board members.
7. Compile a list of sources of financial support (actual, anticipated or potential).
8. Prepare a budget. Develop a fundraising plan and programs.
9. Meet with potential donors.
– While many donors are not willing to provide financial support until tax exempt status is achieved, they are able to indicate whether a nonprofit’s proposed programs are those that are likely to be funded. We recommend that you meet with potential funders early, not to ask for donations necessarily, but to gauge their level of interest in the mission and purpose of the organization, and whether it is the type of organization that they would be willing to support. This also provides a networking opportunity with potential donors. If donors lack interest in the organization’s mission, obtaining 501(c )3 status will not cure this lack of interest. If the nonprofit is going to survive financially, it should cultivate potential funding sources early on.