Forming a Nonprofit Corporation
Here are some steps to take while forming a Nonprofit Corporation:
1. Create a Mission statement, and Vision for your Nonprofit
Your nonprofit will need to have a mission statement, which states what the organization is trying to accomplish, who they will serve, and how they will serve.
2. Who will run your nonprofit?
- A Board of Directors typically run nonprofits. They are legally, financially, and morally responsible for the operation and oversight of the nonprofit. Colorado law does allow nonprofit corporations to have as few as one member. However, to allow for diversity and representation, it is recommended that a board consists of at least five members.
- Board members should NOT be friends, or family members as this would be a conflict of interest. You want people that believe in your mission and want to make it successful. They should understand that they are responsible for budgeting, planning, fundraising, determining policies and procedures, public relations, program evaluation, board development, and, in some cases, hiring an executive director and staff. Once that is done, the Executive Director and/or staff will be responsible for the everyday running of the organization.
3. What are the Bylaws or guidelines for how the organization will run?
- Will the board of directors be elected, if so, how often? Will you have paying membership? Will the membership vote on the board of directors? Think of these as the manual that guides the operation of the nonprofit. These are all questions to consider when starting a nonprofit.
- National Council of Nonprofits
- The National Council of Nonprofits is a membership driven organization on a national basis. They offer a variety of tools and resources that are available to download for free
- Board Source
- Board Source is a membership driven organization. This is the premier site to visit when you have board questions. Many of their resources are fee based. However, they offer guides on board development, management, etc. that are free to download
- Colorado Nonprofit Association (CNA)
- The Colorado Nonprofit Association is a membership driven organization. The membership fee is based on your operating budget, which is pretty low when you are just starting out. With membership you have access to their Knowledge Center, where you will find samples items such as board member job descriptions, board roles and responsibilities, and standards of practice. Your membership would also provide access to trainings and meetings either free or at a reduced rate.
Other Resources for Developing Bylaws and Boards
Candid Start-Up Assessment tool
This assessment is for people who are either considering or are already in the early stages of starting a nonprofit. Questions will assess background knowledge, capital, and work experience that are relevant to starting a nonprofit. Once the assessment is complete, the results will provide customized resources to guide your team on identifying funding, navigating the legal process, developing a business plan, and launching programs.
The Community Resource Center (CRC)
- The CRC offers a Start-Up for Success Workbook that you can purchase and download from their website that will guide you through the start-up process step-by-step. You can find the workbook at https://crcamerica.org/resources/nonprofit-startup-resources/
Candid Learning provides additional information on bylaws along with tips for finding examples.
When forming your nonprofit organization, you should also adopt the following policies: conflict of interest policy, whistleblower policy, document retention policy, gift acceptance policy, and joint venture policy (if necessary). Samples can be found on the National Council of Nonprofits's website.