What is a charity and how do I start one?

Want to start a charity? Read our advice on how to get set up and started

Updated:
Want to start a charity? Read our advice on how to get set up and started

Starting a charity is a great way to address important world matters and take a meaningful step in the right direction. But unfortunately, you can’t just wake up one day and start a company to raise money for your cause. You must go through an involved process to make it official. This article will outline the steps you need to take.

What is a Charity/Non-Profit Organization?

Both nonprofits and charities are organizations that aid and raise money for meaningful causes. However, there is a difference between the two. All charities are nonprofits but not all nonprofits are charities.

Here are some other key differences to consider:

  • Nonprofits use their profits to support one key mission. Charities engage in activities that improve their communities.
  • Nonprofits cannot issue official donation receipts that can be redeemed for tax credits. Charities can.
  • Nonprofits can support causes including charitable, recreation, welfare, recreation, and civic improvement causes. Charities can only operate for charitable purposes.
  • Unlike charities, nonprofits do not have spending requirements.

What Type of Charity Do You Want to Start?

One of the first things you will need to determine when launching your organization is what type of charity you want to start. Raising money for your cause will not be easy work, so it’s important to choose a cause you care about. Here are some common causes a charity may support.

  • Animal Charities: These include wildlife conservation, pet and animal welfare, hunting, and fishing conservation, and zoos and aquariums
  • Arts and Culture: Your charity can support arts and cultural institutions such as museums, art galleries, performing arts, centers, libraries, public broadcasting, and media centers
  • Community Development: Community development charities serve to revitalize neighborhoods that are struggling
  • Educational Charities: Educational institutions can be charities or charities can support access to education
  • Environmental Charities: These are similar to animal charities, but they are more focused on environmental conservation and protection. A charitable organization may be a park or nature center or it may support parks and nature areas.
  • Health Charities: Charitable organizations may run medical centers, or they may support causes that improve access to healthcare.
  • Human Services: This is a broad topic that encompasses children and family services, food banks, homeless services, youth development, crisis centers, and the like.
  • International NGOs: These are Non-Governmental Agencies that are headquartered in one country but do work in various countries. Their causes are similar to the ones listed above and may include development, conservation, human rights, and more.

How Do You Start a Charity?

There are several steps you will need to take to get your charity off the ground. These include:

Deciding What Your Charity Will Be About

Deciding on the type of charity you want to start is a good kick-off point. What are your goals? What will the structure of your operation be? Will you have staff? Where will your company operate? What will be your methods for raising income?

Create a Business Plan

Your business plan should include various elements as follows:

  • An executive summary: This includes your company concept and goals, your marketing strategy, your projected finances, the amount of money you are asking for, and who’s involved
  • An organizational description: The organization description better defines the aims of your organization. It also states your business structure which may be a trust, corporation, unincorporated association, or an LLC
  • Mission and vision statement: This describes your company mission and vision. Use Craft's free company values template to quickly get started
  • Value proposition: This tells people why they should support your charity as opposed to other charities
  • Short and long-term goals: Short-term goals could refer to how much money you are hoping to raise monthly while long-term goals could be the overall improvements you want to make
  • Team: This defines the people behind your organization

Legally Incorporate Your Charity

While you do not have to incorporate your charity, doing so offers several benefits including tax breaks and legal protections. Incorporating involves the following steps:

  • Choose a business name that is legally available in your state.
  • File for an Employer Identification Number (EIN).
  • Prepare and file your Article of Incorporation with your state’s corporate office. This will require a filing fee.
  • Create bylaws that dictate how the corporation will be operated.
  • Appoint a board of directors
  • Hold the first board of directors meeting.
  • Apply for the licenses and permits your charity will need to operate in your community.

Build Strategies for Getting Donations

Once you are set up, you must work on strategies for getting donations. Fortunately, there are several ways to do this including the following:

  • Your Website: Your website will serve as an excellent tool for collecting donations. It should describe your charity’s story, mission, and efforts. It should include a section where people can make digital donations.
  • Social Media: There are several social media platforms that can be used for promoting your cause. Create accounts on the ones where you can best reach your target audience. Then publish posts and other materials that will make raise awareness.
  • Emails and Newsletters: Begin building a base of people who have previously donated to your cause and those who are likely to donate. Keep them in the loop with newsletters and emails letting them know your latest accomplishments and the steps you are taking moving forward. Make them aware that donations are needed.
  • Fundraising Events: Charities should host fundraising events regularly. You can host dinners, speaker events, musical performances and so on. Attendees can pay to attend and/or make donations throughout the affair. Events can be in-person or online.
  • Crowdfunding: There are several crowdfunding platforms charities can use to encourage the public to invest in their organizations.
  • Offer Incentives: People will be more likely to donate if you offer incentives. You can offer swag, namings, special opportunities, and so on. These can come in tiers in accordance with the amount they donate.

Ways to Get Volunteers for Your Charity

Most nonprofits would not be successful without the help of volunteer staff. So how can you get volunteers for your organization? Here are a few suggestions.

  • Advertise Virtually: Use your social media accounts, website, and email to make people aware that you need volunteers. If they are passionate about your cause, they may sign up.
  • Target Students: Volunteering at a nonprofit can go towards school credit and work experience. It can even pay off student loans. This makes students a great volunteer target. Make schools aware you are looking for volunteers to attract students to your cause.
  • Target the Right People: Senior citizens make great volunteers as does anyone who can benefit from your cause. Determine the best ways to make these groups aware you need help.
  • Make Volunteering Easy: Be flexible regarding scheduling and the tasks you will require. This will make it easy for people to volunteer.
  • Offer Incentives: Offer volunteers incentives in the form of swag, feed them during events, and provide other small rewards that will make them feel their efforts are appreciated.

Starting a charity can be a very rewarding experience for you and those you are helping. Now that you know the steps involved, you can move forward with confidence. We wish you the best of luck.