Organizations receive their nonprofit status from the state of Michigan - LARA Division (formerly the Department of Energy, Labor and Economic Growth). But there is much more involved in creating a new nonprofit. It is important to understand the rules and regulations governing Michigan nonprofits, the rules and regulations of being a federally tax-exempt organization, how to register for a Charitable Solicitation License and much more. Even before you begin the "paperwork" process, Nonprofit Alliance staff can assist you in working through the following necessary steps:
Step 1: Determine if you really need to start a nonprofit.
Is starting a new nonprofit organization really the best way to accomplish the goals you have set forth? Other alternatives, including collaborating with an existing nonprofit organization, establishing an informal club or association (as long as government standards are met), finding a fiscal sponsor, or forming a for-profit business, may achieve your objectives quicker, more efficiently, and for the best benefit of your target audience.
Step 2: Decide on the purpose and mission.
The purpose of a charitable nonprofit must be for the public interest and common good. It should establish a single mission and a set of goals and programs that will accomplish that mission. This is a step where a new nonprofit should analyze what it wants to do, to whom it wants to reach, and how it wants to impact society. A mission statement should be brief, timeless, and descriptive of what the organization is trying to accomplish. This statement will guide the organization through its initial formation, program development, growth and change.
Step 3: Recruit board members.
The initial board of directors will assume much of the responsibility in starting a new nonprofit. They will determine the direction and goals of the organization and set forth precedents for future board members. The first board writes the articles of incorporation and approves the original bylaws, does much of the initial fundraising and hires staff as the organization takes shape and becomes an entity in and of itself. This initial all-volunteer period can prove to be very challenging for new organizations.
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