Starting a non-profit agency can be a wonderful and yet harrowing idea. There are many factors to consider that are beyond just overhead and income. How much can you afford in rent every month? How many employees can you have in your budget? What about your own salary? When starting your own non-profit agency you need a budget that reflects what you want your organization to accomplish not only in the first year but set the stage for the future.
Incorporating your agency as a 501(c)(3) agency or the like will be your first priority so you can take advantage of financial benefits. If you have no clue as to how to draft a budget don’t be afraid to ask a local accounting firm or bank for help.
Once you become a 501(c)(3) agency it becomes worth other people’s time to help you as they have tax incentives to do so. The same would be true with consulting a CPA or savings and loan bank when they assist you. Many financial institutions have a non-profit banking specialist who can help with your needs.
There are many considerations when you first begin your venture. Where your non-profit is located can be something that affects your agency’s image. Are you going to be large enough to be in a new office building? Can you handle being in a building that is older?
Keep in mind that many aspects of a non-profit involved donated time and materials. A business owner will derive some tax incentives from renting to a non-profit agency in his or her building so you can keep that in mind. Don’t be afraid to rent a space that may be a little run-down and then volunteer some time sprucing it up.
If you want to own your own building there are several low-cost loan alternatives for banks when they lend to a non-profit organization. Local banks would surely be a great source of financial backing as they have the same passion for helping the community as you do.
How a non-profit receives income is always a concern. At first you may have to rely on a low-cost loan to get you started as donations haven’t rolled in yet. Debts should be just like your budget at home-they shouldn’t exceed a certain percentage of the operating costs.
Grants and donations are the life blood of your agency. Before your non-profit gets off the ground you may want to research the art of grant writing when you apply for aid. Getting grants can also lessen the burden of a bank loan if you start the process early in your agency’s existence. Grants don’t always have to come from national sources as local agencies give out grants all the time.
Keep in mind that a budget for when you first start a non-profit will have start-up costs that may not appear in future budgets so your first year is likely to be the hardest. Statistics show that half of non-profits that start fail within in the first year so it is vital that you plan your budget carefully to reflect realistic expectations on your agency.
The website Non-Profit Guides provided information for this article.