I just got my 501(c)3 Status - Now What?

In February alone, I counted 30 posts in nonprofit groups asking the same question: “We just received our 501(c)(3)… now what?”

That’s not a coincidence. It’s a gap.

So here’s my top pick of first tasks I wish all young nonprofits would do before providing services or asking for funds. So, you have your 501c3… Now what?

1. Build your Board. Most organizations apply for their 501(c)3 status with an average of three board members. These are typically friends or family who want to support the applicant with their cause. For even the smallest of organizations to be successful, you really need to aim for closer to 7 board members. This board should be composed of individuals who truly believe in the mission, and in the beginning, are willing to pitch in to help it run, either financially or with their own time. This early in the game you should not be looking for board members who only want to provide their insight one meeting per month, but passionate individuals willing to serve on at least one committee with skills that complement your own. For example, if you are terrible at numbers, you should ask a couple of people who are stronger in this area, like an accountant, bookkeeper, or successful business owner. Equally important is that none of these individuals are related or in a relationship in any way. Avoid related individuals or couples serving together. While not illegal, it creates governance and conflict-of-interest concerns that can undermine funder confidence. This is a huge conflict of interest and will severely hurt you in the end when you are securing funding. If you have a couple or family members now, allow them to help you build your board, and suggest they alternate years and the other person can volunteer on their non-serving year. Finally, and most importantly, none of your board members should be receiving compensation for their work in the form of services, kick-backs, referrals, or benefits of any kind. While there are scenarios where a board member with a special service, like an accounting firm, may provide said services at a discounted rate, this involves a clear, transparent, and well defined Conflict of Interest document that the entire board is aware of and approves of. This should never be a secret to anyone, and ideally, avoided in your younger years. Disclosing this to a funder may put your org at the bottom of the application list. The ideal starter board is an unpaid board president (and ED), Secretary, Treasurer, and four additional board members. If your founder also serves as Executive Director and receives compensation, strong governance practice requires clear separation of oversight and management. Many organizations designate the ED as a non-voting board member to preserve independence. Paying a founder before the organization has stable revenue can erode donor confidence and create long-term financial strain .2. Get your “back of house” in order. This means that you should have your important documents created, bank account in place, domain name purchased, and liability and board of directors insurance policies in place before you publicly launch programs or solicit funding. Sloppy infrastructure is one of the fastest ways to lose funder confidence. I typically begin by helping my clients create a Google Workspace, official email addresses, and then a Google Drive, where we will organize all important documents. The Drive is useful because all of the board members can access it at any time. You should also keep a hard copy in your office/home. Here are following items that should be in your Google Drive (or other storage) ASAP.
   

Governance Documents

• Bylaws

• Articles of Incorporation

• Conflict of Interest Policy

• Board List & Bios
  

Legal & Compliance

• 501(c)(3) Approval Letter

• EIN Letter

• State Charity Registration

• Additional state filings
  

Operational

• Budget

• Insurance Policies

• Mission & Vision

3. Create a plan… A flexible one. 

Finally, sit down with your team and create a plan together. Do great things. Turn dreams and hopes into reality. Adapt. Overcome. - and be ready to let go because your dream is now a shared dream, and you should trust the people around you helping make it happen.. 

Starting a nonprofit is easy. Building one that survives is not.

 If you want a structured launch plan, governance review, and operational checklist tailored to your mission, book a free consultation below.

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