Nonprofit Kit For Dummies (6^th Ed.)

Helping you successfully start a nonprofit organization the right way or strengthening the governing, financial, and capacity-building framework of your existing nonprofit organization!

Ready to do some good? Ready to give back to the community? You better be! Because in Nonprofit Kit For Dummies you?ll find the tools and strategies you need to organize and shift your nonprofit into high gear. Buckle up and hit the gas as you master the latest techniques in nonprofit startup, recruiting the right board members, identifying collaborative stakeholders, grant writing, online fundraising, and marketing. You?ll learn to improve your management practices, raise more money, give more effectively, and plan more creatively.

This book?s supplementary online resources include expertly written organization plans, financial procedure outlines and guides, and event planning tools you can implement immediately to help your nonprofit help more people. It also walks you through how to:

• Find up-to-date info on the latest web-based campaign tools, like Kickstarter, Kiva, and others
• Use templates, checklists, and plans to organize your nonprofit?s finances, employee relations, and legal structure
• Survive and thrive during challenging times, like those caused by pandemics and natural disasters

Starting and running a nonprofit organization takes heart, courage, and know-how. You?ve got the first two taken care of. Let Nonprofit Kit For Dummies help you with the knowledge as you lift your nonprofit to new heights.

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 3

Beyond the Book 3

Where to Go from Here 4

Part 1: Getting Familiar with the Nonprofit Framework 5

Chapter 1: Journeying into the World of Nonprofit Organizations 7

What is a Nonprofit Organization? 8

Comparing for-profits to nonprofits 9

Introducing the coveted 501(c)(3) status for nonprofits 9

Knowing Your Mission Before Entering the Nonprofit World 11

Setting up a nonprofit 11

Making plans and being flexible 12

Embracing and Sharing Your Inspiration 13

Finding the Resources to Do the Job 14

Who is giving to nonprofit organizations? 15

Supporting your mission with fundraising 15

Chapter 2: Understanding What It Takes to Start a Nonprofit 17

Weighing the Pros and Cons of Starting a Nonprofit 18

Doing Your Homework First 19

Analyzing the competition 20

Identifying the right people to help you 20

Figuring out how you’ll survive financially 21

Acknowledging the reality of what’s ahead 22

Planning, plotting, and projecting 23

Understanding Nonprofit Ownership 24

Benefiting the public for the greater good 24

Being accountable and transparent 25

Looking at the Many Varieties of Nonprofits 26

Identifying nonprofits by their numbers 27

Adding rules and regulations to add to your file 28

Comparing Nonprofits and For-Profits 31

How they’re alike 31

How they differ 32

Using a Fiscal Sponsor: An Alternative Approach 34

Examining common details of a fiscal sponsorship relationship 35

Finding a fiscal sponsor 36

Chapter 3: Prioritizing Building Your Board of Directors 37

Appreciating the Duties of a Nonprofit Board of Directors 38

Primary role: Preserving public trust 39

Secondary role: Dealing with planning, hiring, and other board tasks 41

Sharing responsibilities among the board, staff, and volunteers 42

Recruiting the Right People for Your Board 43

Incorporating diversity, equity, and inclusion in the board’s composition 44

Keeping it fresh: Terms of service 46

Big boards or little boards 47

Choosing officers and committees 48

Introducing new and prospective members to the board and the organization 50

Putting Staff Members on Your Board 51

Using Your Board to Full Capacity 52

Encouraging commitment from board members 52

Holding effective board meetings 53

Chapter 4: Creating Your Mission Statement and Vision Statement 57

Honing Your Mission Statement 58

Keeping your mission statement short and sweet 60

Stating your mission — the goal for services 60

Specifying who will be served by the nonprofit 61

Explaining how you’ll accomplish your mission 61

Incorporating diversity, equity, and inclusion (DEI) into your mission statement 62

Imagining Your Future with a Vision Statement 63

Capturing your vision statement 63

Asking “Where are we going?” and “Why?” 65

Inviting Stakeholders to the Planning Table 66

Encouraging and embracing stakeholder input 67

Working together to finalize your statements 68

Living by Your Mission and Staying Fixed on the Vision 69

Chapter 5: Incorporating and Applying for Tax- Exemption Status 71

Creating a New Entity: The Nonprofit Corporation 72

Following your state’s or territory’s laws 73

Understanding the required governing documents 73

Deciding whether to have members in your corporation 74

Finding the best name 75

Writing the Articles of Incorporation 76

Crafting a heading 76

Article I 76

Article II 77

Article III 77

Article IV 78

Article V 78

Article VI 78

Article VII 78

Article VIII 79

Signed, sealed, and delivered 79

Securing Your Employer Identification Number (EIN) 80

Writing Your Organization’s Bylaws 81

Holding Your First Board Meeting 82

Applying for Tax Exemption 82

Tackling Form 1023 online 83

Discerning between public charities and private foundations 85

Establishing public charity status 85

Describing your activities 86

Reporting salaries and conflicts of interest 88

Dealing with financial information 88

Collecting the other materials 89

Paying the fee 90

Navigating possible contribution barriers until tax-exemption status is approved 90

Chapter 6: Adhering to Nonprofit Status Requirements 91

Disclosing What You Need to Disclose 92

What you do need to show 92

What you don’t need to show 93

Using the web to satisfy disclosure requirements 94

Avoiding Excessive Payments and Politicking 95

Determining reasonable pay and benefits 95

Using caution when getting involved in politics 96

Why all the fuss? Understanding the increased scrutiny by the IRS 97

Reporting to the IRS 98

Filing Form 990-N 99Taking it easy with the Form 990-EZ return 100

Tackling the long Form 990 104

Getting your Form 990 to the IRS 106

Reporting to Your State, Territory, and Local Governments 107

Part 2: Bringing Your A-Game to Nonprofit Management 109

Chapter 7: From the Top: Examining the Nonprofit Management Structure 111

Managing a Nonprofit: A Bird’s-Eye View 112

Appreciating the Governing Board’s Role and Responsibilities 113

Understanding the board’s management oversight duties 113

Protecting your board from liability 115

Redefining the Nonprofit Founder’s Role 116

Adding an Advisory Board 117

Expanding to Take On an Executive Director 118

Chapter 8: Strategic Planning: Embracing the Ongoing Process 121

Understanding the Importance of Planning 122

Making Your Organization’s Strategic Plan 122

Getting ready 123

Working with your nonprofit’s mission and vision statements 124

Hearing from all your stakeholders 124

Surveying the external situation 126

Looking at the internal situation 127

Calling in the SWOT team 128

Putting the plan in writing 132

Adjusting your strategic plan when necessary 134

Putting Plans into Action 134

Defining and setting goals, objectives, strategies, and outcomes 134

Creating a work plan 136

Planning for Programs 137

Working as a team 137

Assessing needs 138

Brainstorming the resources needed to implement new programs 140

Facility Planning: Finding a Place to Do Your Work 142

How much space and of what kind? 142

Location, location, location 142

Owning, leasing, or taking a free ride 143

Making a move 145

Deciding to take on a capital project 145

Chapter 9: Evaluating Your Work: Are You Meeting Your Goals? 147

Knowing the Importance of Evaluation 148

Working Through the Evaluation Process 149

Selecting the right kind of evaluation 149

Planning for evaluation 152

Crafting valuable questions 153

Choosing evaluators: Inside or outside? 154

Conducting Your Evaluation 155

Analyzing Results and Putting Them to Work 156

Interpreting results 156

Using your evaluation to strengthen your work 158

Telling the truth 158

Sharing the evaluation results with your stakeholders 159

Chapter 10: You Can Count on Me! Working with Volunteers 161

Knowing Why People Volunteer 162

Designing a Volunteer Program 163

Considering a volunteer coordinator 165

Determining your need for volunteers 165

Writing volunteer job descriptions 166

Organizing volunteers 167

Hunting for Volunteers 169

Getting the word out 169

Looking for volunteers at other organizations 171

Finding volunteers with special skills 172

Hiring interns 172

Interviewing and Screening Volunteers 173

Managing Your Volunteers 175

Providing adequate training 175

Keeping good records 176

Insuring your volunteers 176

Saying farewell to bad volunteers 177

Showing Appreciation for Your Volunteers 177

Chapter 11: Working with Paid Staff and Contractors 179

Determining Your Staffing Needs 180

Getting Your Nonprofit Ready for Paid Employees 181

Developing your personnel policies 181

Exploring payroll setup options 184

Providing benefits and perquisites 184

Preparing to Hire 185

Composing a job description 185

Considering necessary qualifications 186

Establishing nonprofit salary levels 187

Announcing the position 188

Making the Hire 189

Looking at résumés 189

Interviewing candidates 190

Digging deeper with references 192

Making your decision 193

Onboarding a New Hire 193

Confirming employment terms in writing 193

Getting your new hire started on the job 194

Evaluating your new hire’s progress 195

Looking to the future: Creating a professional development plan 195

Managing Employees 196

Recognizing what a manager or supervisor does 197

Clarifying the lines of communication 197

Following the reprimand-and-dismissal process 199

Working with Independent Contractors 200

Differentiating an independent contractor from an employee 201

Establishing the roles for independent contractors 202

Finding a consultant: Ask around 203

Interviewing consultants 204

Developing and executing the contract 204

Chapter 12: Money Matters: Preparing Budgets and Financial Reports 207

Making a Budget = Having a Plan 208

Beginning with zero 208

Defining a good budget 211

Budgeting based on your history 212

Understanding and isolating general administrative and fundraising costs 213

Accounting for in-kind contributions 213

Creating Budgets for Programs or Departments 214

Working Frequently with Your Budget 218

Projecting Cash Flow 219

Constructing your cash flow projection 219

Deciding what to do if you don’t have enough 221

Borrowing to make ends meet 222

Putting money away to make a nonprofit strong 223

Keeping Your Books Organized and Up to Date 224

Differentiating the various accounting systems 224

Considering accounting software or an accountant 225

Reviewing the Numbers: Financial Statements and Audits 226

Preparing financial statements 226

Seeing the value of an audit 227

Knowing whether you need an audit 228

Reading Your Financial Statements 229

Getting to know the parts of a standard financial statement 229

Asking the right financial questions 230

Managing Financial Systems 232

Chapter 13: Marketing and Branding 235

Taking Care of the Basics 236

Designing a logo and letterhead 236

Preparing an organization overview or brochure 237

Creating a website 237

Producing annual reports and newsletters 239

Taking care of your service population — your most important marketing tool 240

Discovering Who You Are: First Steps to Marketing 241

Recognizing the current market 242

Defining whom you want to reach and how 246

Reaching Your Audience via Mass Media 250

Planning for effective publicity 250

Developing a media list 251

Understanding how the media works 252

Submitting materials to your media contacts 253

Getting your event into community event calendars 254

Putting together public service announcements (PSAs) 255

Using Social Media for Fun and Profit 255

Developing a social media policy 256

Planning your social media posts 257

Choosing your social media platforms 258

Protecting your online reputation 260

Part 3: Raising Funds Successfully 263

Chapter 14: Creating a Fundraising Plan 265

Recognizing Who Can Raise Funds 266

Naming Possible Funding Sources 267

Weighing Your Fundraising Capacity 269

Drafting a Fundraising Plan 270

Setting a preliminary monetary goal 271

Asking whom you and your board members know 272

Researching and refining your prospect list 272

Plotting fundraising costs 274

Moving to an Action Plan 278

Planting the Seeds for a New Nonprofit 280

Hitting up family and friends before asking others 280

Raising funds with special events 281

Getting to know community foundations 281

Assessing your capabilities to apply for government grants 281

Chapter 15: Raising Funds from Individual Donors 283

Understanding Why People Give 284

Stating Your Case 285

Creating an Elevator Speech 288

Identifying Possible Donors 289

Drawing circles of connections 290

Getting a list of potential donors from your board of directors 291

Growing a Major Gift 292

Deciding who should do the asking 292

Preparing to make your request 293

Breaking the ice 293

Adopting the right attitude 293

Timing the request: An inexact science 294

Treading lightly when making the ask 294

Expressing gratitude for the gift 295

Raising Funds by Mail 295

Taking the direct-mail route 295

Inspiring volunteers to steer a letter-writing campaign 297

Raising Money the “E” Way (Easily and Electronically) 299

Building and maintaining relationships by using email and related tools 299

Building your email address lists 301

Using your website as a cultivation tool 302

Setting up an online donation portal 303

Soliciting text message donations 305

Telemarketing: Dialing for Dollars 306

Perfecting a script 307

Training your board and volunteers as callers 308

Collecting the pledges 309

Chapter 16: Planning Onsite and Virtual Special Events 311

Thinking through the Whole Event 312

Using your budget to guide decisions 313

Sticking to your budget 316

Soliciting in-kind gifts for your event 318

Building your event committee 319

Setting a date and location 320

Setting Up Your Timeline 321

The first three months 321

Months four and five 322

Four weeks before the event 322

The week before the event 323

Spreading the Word 324

Setting social media to blast 324

Finding a news angle 325

Getting a mention on radio or TV 326

After the Event is Over 326

Chapter 17: Sleuthing for Grant Funding 329

Assessing Your Nonprofit’s Grant-Seeking Readiness 330

Planning for a Foundation Grant Proposal 331

Learning about funding priorities 332

Familiarizing yourself with types of foundations 333

Using the Foundation Directory Online to assemble a broad list of prospects 336

Digging deeper to narrow your prospects 340

Going for a Government Grant 342

Federal grants 343

Nonfederal government grants 345

Chapter 18: Writing an Award-Winning Grant Proposal 347

Attending to Pre-Proposal Tasks 348

Perfecting the letter of inquiry 348

Passing the applicant eligibility screening questionnaire 349

The Pitch: Writing a Competitive Grant Proposal 349

Starting out with the cover letter and executive summary 350

Introducing your organization and its operating history 351

Documenting the need for funding 352

Setting goals, SMART objectives, and proposed outcomes 353

Presenting (ta-da!) your project idea with evidence-based solutions 354

Presenting the management plan 356

Explaining how results will be measured 356

Talking about the budget 357

Showing where the rest of the money comes from: The sustainability section 359

Appending requested attachments 360

Familiarizing Yourself with Other Types of Written Funding Requests 361

Trolling for corporate grants or sponsors 361

Seeking general operating support 364

Asking for capacity building funding 365

Seed money: Proposing to form a new nonprofit 366

Following Through after Receiving Funding 367

Chapter 19: Capital Campaigns: Finding Lasting Resources 369

Beginning the Funding Plan 370

Preplanning your campaign 371

Developing a rough budget 372

Testing feasibility 373

Analyzing the results of your study 375

Developing a Case Statement 376

Building the Pyramid of Gifts 376

Starting at the top 377

Applying for grants as part of your capital campaign 378

Ending the quiet phase and moving into the public phase 379

Realizing the Benefits and Risks of Capital Campaigns 380

Part 4: The Part of Tens 383

Chapter 20: Ten Tips for Pivoting in Times of Uncertainty 385

Create an Emergency Operations Plan 386

Communicate When Making Hard Decisions 386

Step Back and Regroup 387

Set a Manageable Fundraising Goal 387

Collaborate with Others in Your Field 388

Share a Back Office 388

Place a Program within Another Agency 389

Merge with Another Nonprofit 389

Close with Dignity If Necessary 390

Complete the Government’s Closing Paperwork 391

Chapter 21: Ten Tips for Raising Seed Money 393

Ask 393

Hit Up People You Know 394

Tell Your Story and Don’t Ramble 394

Show How You’re Improving Lives 395

Use Numbers to Convey Urgency and Compassion 395

Research, Research, Research 396

Know Your Donors’ Point of View 397

Build a Donor Pyramid 398

Make It Easy to Respond 398

Keep Good Records 398

Chapter 22: Ten Tips for Protecting Your Nonprofit 401

Assessing Your Risks 402

Planning for Emergencies 402

Filing Annual Federal Forms 404

Filing Annual State Forms 404

Paying Employment Taxes 405

Reporting Payments to Consultants 405

Maintaining Transparency 405

Responding to Negative Press 406

Protecting Your Online Reputation 407

Determining Insurance Needs 407

Part 5: Appendixes 409

Appendix A: Glossary 411

Appendix B: About the Online Content 415

Index 421

Dr. Beverly A. Browning is the author of 43 grant-related publications and six editions of Grant Writing For Dummies. She has raised over $750 million in awards for her clients.

Stan Hutton is Program Consultant for the Clarence E. Heller Charitable Foundation.

Frances N. Phillips teaches grant writing at San Francisco State University.