Starting a Nonprofit: Visionary Stage

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Visionary Stage

Step 1: Determine if it is necessary 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 unincorporated association, finding a fiscal sponsor, or forming a for-profit business may achieve your objectives quicker, more efficiently, and for the greatest benefit for your target audience.

Tips for this stage

If you’re not sure if starting a nonprofit is the right step, explore other alternatives that will still allow you to pursue your idea without needing to create a new nonprofit.

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.

During this step, a new nonprofit should analyze what it wants to do, who 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 not only its initial formation, but also future program development, growth, and change.

Tips for this stage

If possible, keep your mission statement to 25 words or less. Describe what you are all about, but avoid language that is so specific that it limits your ability to be a flexible organization in the future.

Step 3: Recruit your founding board

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, making it essential that initial board members are dedicated to the nonprofit’s mission and to the success of the organization.

An effective board should include active members of the community the organization serves and accurately reflect the diversity of that community. Founding boards are also often strengthened by including members who are comfortable with financial and legal processes and documentation as well. 

Tips for this stage

Conflict of interest is important to consider when recruiting and orienting new board members. For board members, conflicts of interest occur whenever a director acts in a position of authority on an issue in which he or she has financial or other interests.

Step 4: Check for availability and reserve name

Not only is it Minnesota law, but it is crucial to your new organization’s identity to obtain a unique name under which to operate. Any potential name for a new business or nonprofit can be checked through the Minnesota Secretary of State’s Office. Organizations can also reserve a unique name through the Minnesota Secretary of State’s Office. Once a name is reserved, no other organization may use that name.

Important Update Regarding Early Name Reservation: If you reserve your new organization name early through the Minnesota Secretary of State’s website (as described above), you will NOT be able to complete the submission of your Articles of Incorporation online on the same site on a later date. Rather, you will need to subsequently either file your articles in-person or via mail with the Minnesota Secretary of State OR inactivate your original name reservation (forfeiting your original $55 fee) and file your articles anew (thus, reserving the name as part of your articles filing).

Tips for this stage

Organizations may forgo reserving a name and the reservation filing fee ($35 by mail, $55 online) if they are prepared to incorporate immediately with a name that is currently available.