The steps towards Building a nonprofit organization will vary depending on your organization’s location. Despite the different steps identified per country there remain many shared steps which we’ll discuss below:

How to Built a Nonprofit Organization
  1. Step One – Incorporating as a nonprofit: Identify what type of corporation you want to create and submit the appropriate forms, documents, and information to the relevant government office (and pay relevant fees). Note, the following steps emphasize organizations incorporating as a nonprofit.
  2. Step Two – On-boarding & developing new board members: Recruit, engage, develop, and on-board the organizations Board Members.

The next step is to prepare the organization’s constitution and bylaws (mission, vision and values statements). This would typically be put together with the help (or sometimes exclusively, on their own) of your board. For nonprofits, the board members are volunteers that are invested in your mission. The following ‘roles’ should be included in your organization’s Board:

  1. President
  2. Vice President
  3. Secretary
  4. Treasurer
  5. Ideally, it’s great to also have someone that fills the role for Fundraising/Public Relations (and they could help you with your fundraising projects!)

Committees are formed from these roles (and include other members of the board) and typically include:

  1. Governance Committee
  2. Finance Committee
  3. And ideally, a Fundraising Committee

Other committees are also formed depending on the organization’s industry and needs. Such as:

  1. Human Resources Committee
  2. Quality Assurance/Audit Committee

‘Types’ of boards

Keep in mind that there are ‘volunteer boards’ – that help out quite a bit, but Canada has been moving more towards ‘Governance Boards’ – which focus on strategy and oversight. I currently sit on a governance board, but recognize the pros/cons of each. Board governance follows a set of standardized rules for decision making.

  1. Step Three – Drafting agency constitution, mission and bylaws: With the help and leadership of the board, draft the organization’s governing documents and submit to the relevant government office along with your application for the Charity Tax Status.

Ideally, you have board members who are experts in the above roles. In addition, a lawyer is also great to have on the committee as well.

Other areas of specialization include child welfare, education, nonprofits, leadership, human resources, etc. Once the board is formed, the board members typically take on the lead for recruiting future members. The term for board positions is 2 years, although many may choose to stay on longer. The on-boarding process includes interviews, and the BOARD vote (requires a quorum to elect a new member). The Board technically supervises the CEO/Founder, and emphasizes strategic initiatives. Typically, the CEO otherwise has the discretion to handle operational issues on their own (with some consultation with the Board, if needed).

With a new organization it is often recommended to begin recruiting those board members who specialize in policy and understanding the legislation of the New Societies Act of BC (as well as the organization’s area of focus). In addition to identifying requirements around the organization’s constitution and bylaws, The New Societies Act of BC also informs the steps to incorporate as a nonprofit.

There are some new updates to the Act this year, so you will see some language mentioning the ‘transition.’ The transition can largely be explained and transitioning from paper filing/copies to digital filing/online. There are a few other details as well, but the Board’s first step might be simply to take a look at this page to determine how to put the constitution and bylaws together (and where and how to file them).

Having a nonprofit board has a lot of advantages, but can become a little political. That’s the life of all nonprofit execs, I’ll admit. But if carefully engaged during the initial forming stages of your organization – they can also be very helpful to get the documentation and policies in order.

  1. Step Four – Applying for Charity Tax Status: Apply for the organization’s Charity Tax Status. Once approved, this tax status allows pursuing funding opportunities not available to for-profit businesses.

Nonprofit grants will require a letter and charity number verifying your organization’s tax status. The links above should also provide suggestions regarding how to complete grants, etc.

The key challenge will be to identify grants that provide funding for the exact purpose you are looking for (a challenge all organizations face). Since there is often quite a bit of tracking and reporting requirements for each grant most organizations prefer to target larger grants to justify the time and effort. Please refer to your local government’s websites for links and additional information for organizations in other locations.

Nonprofit grants will require a letter and charity number verifying your organization’s tax status. The links above should also provide suggestions regarding how to complete grants, etc.

The key challenge will be to identify grants that provide funding for the exact purpose you are looking for (a challenge all organizations face). Since there is often quite a bit of tracking and reporting requirements for each grant most organizations prefer to target larger grants to justify the time and effort.

Organizations may also want to consider pursuing other traditional funding vehicles prior to a nonprofit securing their Charity Tax Number. The funding available to an organization will depend on the business’ tax status.

How to build a nonprofit organization

Beginning with an aligned culture of shared meaning and values is crucial for nonprofit organizations. The process of Incorporating as a Nonprofit and securing your organization’s Charity Tax Status is a lot of work. But the steps are worthwhile as they will set the foundation for the organization’s direction, vision, and future. With the organization’s constitution, bylaws and mission the agency staff has the guiding documents, values, and statements to build momentum.

Has your business recently been involved in Building a Nonprofit Organization? Share your insights with the group below.

This article was written by Travis Barker from Business2Community and was legally licensed through the NewsCred publisher network.