How to Start a Nonprofit in New Orleans
A guide for nonprofit founders
If you have a cause or community you're passionate about serving, starting your own nonprofit organization can be a powerful vehicle to tackle important issues in New Orleans and beyond. However, starting and running a nonprofit can be a lot of work, so it’s important to understand what’s involved before getting started.
Start by conducting a needs analysis to determine if there are other nonprofit organizations, businesses, or government entities already doing the same type of work you plan to do. If similar organizations already exist, it may be easier and more beneficial for all parties to partner with existing organizations, rather than starting your own nonprofit.
Next, determine if a nonprofit is the best way to achieve your goals, or if pursuing a for-profit business or another alternative might be a better solution.
Once you’ve decided that a nonprofit organization is the way to go, there are a few more things you should understand before you get started. We’ve outlined a few of the most important aspects of starting a nonprofit below, as well as some free resources and technical assistance programs for nonprofits you can find in the New Orleans area.
Types of Nonprofit Organizations
Before applying for nonprofit status, an organization must determine if it is an association, corporation, or trust.
A group of individuals banded together for a specific purpose. For an association to qualify for 501c3 status with the IRS, it must have a written document, such as articles of association that contains certain language.
An organization formed under state law by the filing of articles of incorporation with the state. For a corporation to qualify for 501c3 status with the IRS, its charter or articles of incorporation must include certain language.
A relationship formed under state law in which one person holds title to property, subject to an obligation to keep or use the property for the benefit of another. For a trust to qualify for 501c3 status with the IRS, its organization must contain certain language.
501c3 Tax Exemption
501c3 organizations are charitable, educational, and religious organizations eligible to receive tax-deductible contributions. In order to qualify for 501c3 tax exemption, you must do the following:
- Determine if your organization is a trust, association, or trust.
- Determine the organization’s exempt purpose. Exempt purposes are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.
- Submit a completed, signed, and dated Form 1023-series application with the application fee of $275.
- Apply for and receive an Employer Identification Number using Form SS-4.
- Attach exact copies of the organization’s organizing documents.
- For organizations that have existed for three or more tax years, include financial statements for the current year and two preceding years. For new organizations, give a financial statement for the current year and proposed budgets for the next two years.
Developing a Board of Directors
A board of directors is a nonprofit’s governing body. Its duties include fundraising, financial oversight, leadership and strategic direction, and ensuring the organization remains accountable to its donors and the general public. See below for a few guidelines:
Board Recruitment Guidelines
- First and foremost: recruit board members who believe in your mission.
- Assemble a board that is demographically and racially representative of the community it serves. Be mindful to also include a range of ages and gender balance.
- If other local organizations or institutions are critical to your work, think about including a representative.
- Include a range of professionals who can bring the expertise you will need to accomplish your organization’s mission. This may include experts in law, financial management and accounting, marketing, fundraising, and advocacy.
- Also consider potential board members’ access to networks, from neighborhood leaders who can provide insight into the needs of your beneficiaries, to contacts at media outlets, government officials, or potential donors.