Running a Nonprofit

Your new nonprofit will need infrastructure, even if you or your volunteers are filling all of the roles for now.

IT & Technology

The moment you send your first official organizational email, you establish a digital footprint for your nonprofit and shoulder the responsibility for ensuring the security of your online activities. Creating a cybersecurity protocol and choosing your vendors carefully are important first steps. You’ll need to pick a domain name, create a social media presence, and acquire a system to securely collect client and donor data. Choosing platforms that will grow with you translates into huge time-savings over the next few years to come.

Insurance

For many small nonprofits, Directors & Officers liability insurance and general liability policies are sufficient. The nature of your activities might make your liabilities more complex. Do you supervise children? Recruit volunteers? Transport participants? Your insurance agent will need to confirm that your policies are focused on participant safety and that you, your staff, and volunteers are all trained on those policies and follow them faithfully. A good agent will talk through this with you and help you find the appropriate product. It might be helpful to change your perspective from “things that could get us sued” to “things we need to focus on to keep our people safe.” When you do that, your insurance becomes the foundation of your risk management policy!

HR & Payroll

Before you hire staff, think through the policies and procedures that will affect them. Human Resources is a huge area of risk for nonprofit leaders; you must follow HR laws, and you should follow ethical practices; if you don’t you could face lawsuits, bad publicity, unforeseen expenses, and gaps in service delivery. Using an online payroll company is a good place to start, as they will ensure that you collect necessary documentation and complete all state and federal requirements for the employees on your payroll.

Taxes & Accounting

To maintain your tax-exempt status, nonprofits have a bit of IRS paperwork to handle, called the 990. Now, if your nonprofit’s yearly income is less than $50,000, this form is a breeze—it’s compact enough to fit on a postcard.

As a tax-exempt nonprofit, you’ll be seeking donations to cover your mission-related expenses. This means you’ve got to keep a watchful eye on your income and expenses, and your board of directors should be overseeing the accurate accounting of your organization’s operational costs.

As your organization becomes more complex, your accounting system needs to grow with it. Some funders might ask for proof that their contributions are used for allowed expenses, and it’s your duty to ensure that your donors’ funds are spent prudently. In the early stages, many organizations manage their finances using spreadsheets, then transition to more sophisticated systems like QuickBooks. Eventually, you might consider outsourcing or hiring a professional accountant to handle the financial aspects.

Nonprofit marketing includes both recruiting participants for your programs and finding donors, volunteers, and cheerleaders for your work. You’ll need to study your community to figure out the best ways to share information and get them involved. Whether it’s coffeeshop bulletin boards or Facebook, your message needs to get in front of the people who are interested, and able to participate. If you love social media, then just budget the amount of your time this will take. But if you’re already craving a break from social media, marketing is going to be exhausting and stressful. In this case, recruit a savvy and dedicated volunteer or hire someone to handle your nonprofit’s social media communications.

Test your knowledge

Which of the following nonprofits needs insurance?