How to Start an Online Charity: Everything You Need to Know
Understanding how to start an online charity isn't much different than knowing how to start a traditional charity.3 min read
Understanding how to start an online charity isn't much different than knowing how to start a traditional charity. Most importantly, you will need to make sure that your organization is following the IRS rules for nonprofit organizations. You also need to be certain you structure your charity correctly.
Create a Vision for Your Charity
The most crucial step in starting a charity is developing a vision for your organization. Generally, people with an interest in starting a charity are enthusiastic about a certain cause, and if you want your charitable organization to succeed, you need to choose a cause about which you are passionate. Consider the causes that excite you, and then try to determine if other people have an interest in this cause. Next, think about the type of change you want to accomplish related to your cause.
In general, the best way to start your charity and work towards your chosen cause is to form a 501(c)(3) nonprofit organization. To form such an organization, you will need to comply with certain IRS rules, and your organization must focus on a charitable purpose.
For an organization to receive tax-exempt status, it must either be a charity or focused on one of the following purposes:
- Prevention of cruelty.
- Public safety.
You cannot operate your charity for a private interest's benefit. You are also restricted in how your charity can lobby for support and the political efforts in which your organization can engage. Before you apply for tax-exempt status, you should consider whether forming a 501(c)(3) organization is necessary for your charity. It's possible that your charity can find support from charitable trusts, which would eliminate the need to obtain nonprofit tax status. Nonprofits and trusts are very different organizations. Typically, trusts focus on providing money instead of services, and are almost always privately funded.
Outline Your Mission and Choose a Name
Once you've decided the cause on which your charity will focus and on whether you will apply for tax-exempt status, you need to outline your charity's mission. Think about the activities in which your organization will engage. Will your focus be on offering services to your community, or are you more interested in advocacy? After you've decided your mission, you should write a mission statement that outlines what your group will do.
Strong mission statements will indicate what your group will do and what goals you hope to achieve. With a well-developed mission statement, you should be able to attract support from funders, volunteers, and members of your community.
You can follow these simple tips to help you write your mission statement:
- Keep it Concise: Your mission statement should be no longer than five sentences, and you should avoid using complex language.
- Do Your Research: Reading the mission statements of established charitable organizations can help you write your own.
- Support Your Statement: After writing your mission statement, you should develop goals for your charity that will be challenging but feasible.
Once your mission statement is complete, you should select a name for your charity. The best idea when naming your charity is to choose something that will let people know what your organization does. In many cases, charities are named after a person who is in some way related to the purpose of the charity. For example, if your charity's focus is on fighting a disease, you could name your organization after someone close to you who has suffered from this disease.
Articles of Incorporation
Drafting your Articles of Incorporation is the next step in forming your charity, assuming you are establishing a nonprofit corporation. You will use your Articles of Incorporation to found your charity and detail important information about your group. On the internet, you can find templates for your Articles of Incorporation.
Include the following information when drafting your Articles:
- The purpose of your charity.
- Your charity's name.
- How long you intend your organization to last.
- Your charity's structure.
- Other organizational information.
Generally, you can visit the website of your Secretary of State and find an online Articles of Incorporation form that you can complete and submit. Before submitting your form, you should check your state's requirements, as you may need signatures from two incorporators.
If you need help with how to start an online charity, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.