How To Start Your Nonprofit Organization With No Money
Fueled with just a passion for their mission, many people wonder how to start a nonprofit without capital. Starting a nonprofit organization is like starting a for-profit business — it requires seed money. If you do not have savings to dip into for this seed money, you have to find creative ways to get tasks done for free or cheap. Luckily, we have some strategies for this!
The rest of this article will cover the following topics:
- Can You Start a Nonprofit Organization With No Money?
- 7 Tips for Starting a Nonprofit Organization With No Money
- How To Start a Nonprofit Organization in 4 Steps
- Final Thoughts
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Can You Start a Nonprofit Organization With No Money?
The short answer is yes. If every individual with a dream of changing the world waited until they were rich to start, there would be far fewer nonprofits. However, there are a few start-up costs involved with building an organization. If you do not have the funds, you will have to find the funds. The good news is, with the right knowledge, it is doable.
Even if you are working without any ongoing expenses (or overhead), there are some payments you have to make to get your idea established as a nonprofit:
Filing your 501c3 application with the IRS costs at least $275. This is the cost for the 1023-EZ form, which is not an option for every nonprofit. The fee for the traditional Form 1023 is $600.
Incorporating with your state can cost around $100 or more, depending on the state’s specific requirements.
So all that being said, how much does it cost to start a nonprofit? At the very least, you will need around $1,000 to get started, and this does not take into account any administrative or legal fees. However, there are ways you can cover these fees without personal cost — as long as you know where to look for help.
Pro Tip: Before getting started, take some time to research how to register a nonprofit in your home state. Some states make it fairly easy, while others have stiff requirements. It is best to know exactly what you are getting into before you take any definitive steps.
7 Tips for Starting a Nonprofit Organization With No Money
In this section, we will discuss some practical tips for cutting costs as you are creating your nonprofit.
Work With a Pro-Bono Attorney
We recommend working with a legal professional as you file the complicated paperwork necessary for starting a nonprofit. Though the legal fees can cost several thousand dollars, doing the paperwork incorrectly yourself can end up costing you more time and money if the government rejects your application, and you have to resubmit it.
Sadie is thinking of the best ways to get started with her nonprofit without much capital.
A great way to sidestep this problem is to get a lawyer on your board who can offer legal help for free. You could also do a basic Google search for lawyers in your area who offer pro-bono programs.
Find a Fiscal Sponsor
A fiscal sponsor is an established organization that supports a new nonprofit to benefit the community. With the support of one of these groups, your fledgling organization could lighten its load by leaning on its sponsor for some financial and administrative tasks.
You can search the National Network of Fiscal Sponsors website to find a potential sponsor that matches your goals, vision, and mission. Cold calling existing organizations that have similar values to yours is another way to find a sponsor.
Build a Dedicated Board
Your board members do not only exist to advise you; they also play key roles in getting your organization off the ground. As we mentioned earlier, an attorney on the board means you get pro-bono legal work. A marketing professional can create advertising campaigns for you. Actually, all of your board members are potential marketers. By networking with their peers, they can increase the visibility of your organization.
Board members can also help defray start-up costs — in fact, many nonprofits ask for their directors to give annual donations.
Take Advantage of Volunteers
A team of dedicated volunteers is the foundation of any successful nonprofit organization. As someone with a strong interest in your mission, you likely know friends, family members, and community members who have a similar interest. Encourage these folks to volunteer for you.
Here are a few tips for organizing your volunteers:
Ask each volunteer what specialized skills they have that can help you.
Create a training program by having the more experienced volunteers mentor the newer ones.
Divide your volunteers into teams, and delegate a leader for each team.
In essence, you are treating these volunteers like employees. But be careful! They are helping you out of the goodness of their heart, so do not abuse that. Do not overload them with so much work that they do not have time for their job, family, and other responsibilities. Be sure to thank them regularly as well. If you can afford even $50 from your personal bank account, use that money to host a thank you party with some light snacks.
Research Free Marketing Tools
The great news about starting any corporation in today’s world is the availability of online marketing tools. Many of these tools are available for free or with a lite, free version.
Some of the best free online marketing tools include:
Social media: All social media sites are free to join.
Mailchimp: This email service offers a free tier, which allows you to send 10,000 emails per month to up to 2,000 subscribers.
Bloomerang: The free version of this program helps small nonprofits start a donor database.
Microsoft Clarity: This free tool allows you to track how visitors are interacting with your website.
Google Ad Grants: All eligible nonprofits can set up a Google Ads account with a free monthly allowance of $10,000. You write some ads and attach them to keywords that relate to your organization. When someone searches for one of those keywords, your ad may appear above or beneath the top search results.
Pro Tip: Springly has a free version of its membership management software called Liberty. It helps with marketing in addition to organization at no cost to you!
Apply for Community Grants
Community grants are designed for small start-up nonprofits just like yours! Government and corporate entities offer them to benefit local communities. They do not offer a ton of money, but they are certainly enough to help with small costs, such as printing flyers. Plus, they do not have the involved application process that large grants from federal entities and private foundations do.
Host Free Fundraisers
Finally, start to do what nonprofits do best — collect donations! Fundraising campaigns are the lifeblood of every nonprofit organization, and there are several that you can run for free.
Online crowdfunding is a fairly recent phenomenon. Create a profile on Kickstarter or GoFundMe, and see how much you can raise. If you tell your volunteers, board members, and other stakeholders about your page, they can donate themselves or encourage their peers to do so.
Matt is emailing to spread the word about his upcoming fundraiser!
You can also run an online peer-to-peer fundraising campaign. Simply tell the story and mission behind your organization on social media. The hope is that your followers like, share, and comment on your posts to reach their networks. If they are dedicated enough, they can even write their own posts promoting you.
Finally, you can look for corporate sponsorships. Find a local business that has similar values as your nonprofit, and ask if they want to fund your next fundraiser. Promote it as a win-win scenario. You receive help with your fundraiser, and they get free publicity and the reputation of being socially responsible.
If you do not want to rely on a corporate sponsor, there are tons of fundraising events that are not completely free but cost very little. Here are some examples:
Potluck dinner party
Game or trivia night
How To Start a Nonprofit Organization in 4 Steps
Now that you have some ideas for finding the money you need to get started, we will share a basic overview of how to actually get going. If you are looking for more detailed information on how to choose a name for your nonprofit organization, what to ask yourself before starting a nonprofit organization, how to draft your nonprofit organization’s vision statement, or anything else, check out our blog.
Step 1: Conduct Research
The best way to ensure a smooth and successful launch is to do your research ahead of time. Complete a nonprofit needs assessment, and read resources like this one. Along the way, ask yourself:
What type of nonprofit do I want to run?
How am I going to find funding?
What steps do I need to follow to get incorporated in my state?
Step 2: Create a Business Plan
Drafting a business plan is a necessary step in the nonprofit forming process. This document is going to help you stay organized when you get inundated with paperwork and other administrative tasks. The exact structure of your nonprofit business plan is going to vary, but it should at least have the following sections:
Provided products or services
Step 3: Recruit Board Members
Next, bring together a governing body for your nonprofit. Do not just accept anyone, though. Be meticulous to ensure that you get the right people. First and foremost, you want to find individuals who are aligned with your values. Also, try to recruit people with a variety of skill sets. This is not only a best practice for diversity reasons, but, as we mentioned in the previous section, you can use their skills for free.
Peter is feeling at peace now that he knows exactly how much it takes, and how to start a nonprofit!
Step 4: File on the State & Federal Levels
This step is where it gets a bit involved. You are already ahead of the game if you have a solid business plan and a board of directors behind you, as they can help smoothen the multi-step process of filing for incorporation and tax-exempt status. Here is a quick rundown of some tasks you need to complete:
Establish the name of your nonprofit.
Apply for an Employer Identification Number (EIN).
Write your bylaws.
File your articles of incorporation.
File your Form 1023 or Form 1023-EZ.
Pro Tip: While filing a 1023-EZ with the IRS is less expensive and extensive, you have to check if you are eligible to use this form; it is only available to small nonprofits. It is also important to note that the 1023-EZ can be controversial, with some states opposing its use. Some nonprofit advocacy groups also feel that using this form can be a roadblock to getting certain grants. Make looking into this form a part of the research phase of your process.
Whether you are working with a team of like-minded friends or looking to establish a sole member nonprofit, there are many ways that you can avoid spending too much of your own money. It is not necessarily an easy process, but seeing your vision through is well worth the effort it takes to get it off the ground.
Also, remember that you do not need to do it alone to prove your dedication and motivation. Find people in your networks who support your mission, and recruit them as board members, volunteers, members, and donors. With your work ethic and our tips, you can make your dream nonprofit a reality.
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💡How do nonprofits get start-up money?
New nonprofits can find start-up money in several different places. First, when you recruit your board of directors, set the precedent for annual donations. Next, look into small community grants that do not have the involved application process that other grants do. Finally, do some fundraising. You can run crowdfunding or peer-to-peer campaigns or try other free fundraising methods. Find out more.
🔑 Can you start a nonprofit organization with no money?
The short answer is yes. You still need money to get started, but this money does not need to come out of your own pocket. By finding backers and volunteers, you can get your nonprofit started without it costing you a penny. Find out more.
📝 How much does it cost to start a nonprofit organization?
It depends on your individual organization. However, given the application fees for incorporation and tax-exempt status, you likely need to have at least $1,000 at the ready. Find out more.