Understanding Nonprofit Corporations
If you have a company or plan to set up a business, social club, a trade organization, or cooperative whose goal is addressing a societal problem, then you should set up a nonprofit.
If your organization is looking to earn a profit as well as accomplish those goals mentioned above, then you should form a for-profit corporation or LLC.
Most nonprofits are formed to provide a benefit to the public. Such organizations include companies formed for charitable, educational, scientific, religious and literary purposes. These charitable companies are sometimes referred to as Sec. 501(c)(3) organizations. Their name is derived from the section of the Internal Revenue Code that provides them with an exemption from taxation.
Funding your Nonprofit
So, your nonprofit organization is up and running; now you need funding to keep it solvent. Here are a few funding ideas.
- Apply for a grant. To get the most ‘bang for your buck’, consider subscribing to a grant listing service like GrantWatch.com. For as little as $18.00 per week, you’ll get unlimited access to a database of more than 20,000 grant listings. Grant funding sources include local, state, federal and foundation.
- Ask for donations. Social media sites like Facebook will allow you to place a donation button on your profile. Friends, family, and colleagues can donate to your project as well as share your campaign with their friends and colleagues.
- Crowdfunding. Create a campaign on crowdfunding sites like YouHelp.com Crowdfunding is a fundraising tool that enables forward-thinkers like you to raise money for worthy charities, new programs or products or to stage events.
- Cause-related campaigns. This is more of a marketing effort where you combine marketing with funding for your nonprofit. It is built upon a partnership between your nonprofit and a for-profit/business where your organizations team up to raise money for your cause. Toms show does this paring well. When you buy TOMS products, the company makes an in-kind donation to a person in need. When someone buys a pair of TOMS shoes in the US, for instance, the company donates a pair of shoes to a child in a poor country like Haiti.
- Ecommerce or brick & mortar store. Consider adding an eCommerce store to your website. If you have space, adding a store (like Goodwill or Habitat for Humanity) where the organization accepts and sells gently used donations to the public. Holiday cards and stationery are great sellers in charity eCommerce shops. You can also become an affiliate of major brands such as Amazon. Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products.
- Sponsorships. Seek out strategic partnerships with a business or other for-profit organizations. Solicit sponsorships. Through their sponsorship, your nonprofit can gain monetary as well as in-kind donations that can include items such as furniture, office equipment, marketing advice, logo or website development support, etc. In exchange for their sponsorship, your nonprofit can showcase their business on your website, displaying their logo at your events through banners or on t-shirts, or giving them recognition on your blog and social media platforms.
- Traditional fundraising will always be in vogue. This includes sporting events, tournaments, festivals, walk-a-thons, dinners, auctions, concerts, etc.
- Google Ads grants – Did you know that Google gives nonprofits up to $10,000 USD of in-kind advertising every month?
You could recruit more volunteers. Attract more donations. And share your story with audiences all over the globe.
- Good old fashion bartering services. You could do things like bartering for free office space in exchange for being the property manager of the building. Think about your marketable skills and seek out partners willing to barter.
Do you have a funding idea that will benefit a nonprofit? Tell us in the comments 👇.