A few years ago, I wrote a book with 15 co-authors from around the world called Planet Entrepreneur. I learned many lessons from that experience (including not to try and write Starting a Charity.jpga book with 15 other people).


More importantly, I discovered the many ways entrepreneurs act on their inherent idealism.


Globally, this is often called “social entrepreneurship,” meaning, using entrepreneurial skills and tactics to accomplish societal goals. For instance, one of my co-authors was using his MBA to bring electrical lighting to rural India; not something you usually associate with entrepreneurship.


Here at home, social entrepreneurship often takes the form of starting a non-profit or a charity. Is it difficult? Well, how is this for an answer: It is no more or less difficult than starting a business.


Here are the steps to take if this is your goal:


1. Have a specific vision and goal: There is a local sportscaster where I live who started a non-profit intended to help disadvantaged kids get into youth sports. He raises money to give them footballs, basketballs, soccer uniforms, and so on. It is a specific goal that fits his passion and brand. That’s the ticket.


The point is, if you want to start a charity, you should have a specific goal or purpose in mind. Make it narrow enough that it is easy to understand, and important enough that people will want to help you accomplish it.


That last point is vital. As the creator of the charity, you will necessarily be in front. You must get people excited with your vision. So, make sure you choose a focus that revs your motor and people can get behind.


As with a business, you will know what is unique and different about your intended charity. The National Center for Charitable Statistics states there are 1.5 million non-profits in the U.S. That is a lot of competition – for eyeballs, buzz, funding, and so on.


To stand out, you must do something different, special.


2. Draft a business plan: Just as with a for-profit business, a charity or non-profit needs a business plan. You will use it to define your vision, raise money, and give specific action steps to your lofty goals.


In it, you should discuss:


  • What the charity will be
  • How it is unique
  • Why it is needed
  • Who it will serve
  • Strategies for funding
  • Likely donors


And so on. My favorite tool for business planning is BplansThey have a good article on the subject here.


3. Make it legal: First, you will need a name. Choose wisely. Make it memorable.


Next, you will need to create a 501(c)(3). This is the section of the tax code that deals with charities and non-profits. A 501(c)(3) is the legal structure your charity needs to take. It is akin to incorporating. You can create it yourself using a site like LegalZoom, or work with an attorney.


After, you will file the non-profit’s Articles of Incorporation with your state, and then you will need to apply for tax-exempt status from both the IRS as well as your particular state.


4. Choose a board of directors: Your board helps set policy and direction and should be a major help with fundraising.


5. Get funded: Funding is the challenging part for most non-profits. It is an ongoing process. You will need funding to launch, and continued funding for operations. There are all sorts of models out there that you will need to learn about, including foundations, grants, individual giving, legacy giving, and so on.


The good news is that people want to help. If you have a strong and unique vision, a lean operation (meaning, most money goes to those you are trying to help and not your overhead), and a solid plan, you should find plenty of people and organizations who will want to assist you.


About Steve Strauss


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Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss.


Web: www.theselfemployed.com or Twitter: @SteveStrauss

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