How to Start a Charity

Co-authored by Rob Wu and Amy Bobinger, BA

Last Updated: April 24, 2024 Approved

Starting a charity might seem like a big dream, but if you're passionate about helping others, it can be a really rewarding path. If you're ready to take on this commitment, start by getting really clear on your mission and core values. Once you have that nailed down, you can start putting together the details of how you're going to operate. And if you need help along the way, we're here with the answers you need to get up and running!

Question 1 of 9:

How do I set up a charity?

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1
Start by writing a mission statement that summarizes your goals. Write out a short, clear description of what your organization will do, who you'll help, why your goals are important, and how you're going to reach them. This is your mission statement—use it to help guide you and keep you on track as you get deeper into the planning process. Then, review it regularly as you operate your nonprofit to make sure you're staying true to your original vision.
- You'll use your mission statement will to inform potential donors, state and federal officials, board members, and volunteers of the purpose for your charity.
- The nonprofit Feeding America has a great example of a short but thorough mission statement: "Our mission is to advance change in America by ensuring equitable access to nutritious food for all in partnership with food banks, policymakers, supporters, and the communities we serve." ^{[1]
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Create a detailed business plan for how to achieve your mission. In your business plan, explain your strategy for your first 5 years of operation, including how you'll make money, how you'll spend it, and how you plan to operate. Be as specific as possible when you're writing this out. Consider including things like: ^{[2]
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- What you're trying to accomplish
- A conservative estimate of what you expect to earn from fundraisers
- Plan B if your source of income changes
- How much you'll pay any staff members
- The role your board members will play in the organization
- Strategies for attracting new donors
- How you'll measure your progress toward meeting your goals ^{[3]
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Question 2 of 9:

How do I register a charity in the US?

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Work with legal and financial experts to navigate the paperwork. To register as a charity, you'll need to gain 501(c)(3) status, meaning you'll have tax-exempt status with the IRS. This is a pretty complicated process with a lot of red tape, so it's best to hire an attorney who specializes in nonprofit law, as well as an accountant who has experience incorporating 501(c)(3)s. ^{[4]
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- In addition to registering with the IRS, you'll need to file paperwork to incorporate your charity with your state. ^{[5]
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- Once you've been incorporated as a 501(c)(3), you'll need to apply for your Federal Employer Identification Number (EIN). To do this, fill out IRS form SS-4—your accountant will give you more information on how to do this. ^{[6]
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- Your lawyer and accountant will also be able to advise you on the ongoing paperwork you'll need to file to stay in compliance once your organization is running.

Question 3 of 9:

How much does it cost to start a charity?

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You'll need to raise enough money to cover all the expenses for a year. This includes all of your startup and administrative costs, so you might have to do a good bit of fundraising before you even get up and running. However, it's good motivation to keep your operating costs low—and that's a good practice to follow, even if the organization becomes really successful later. ^{[7]
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- It can cost close to $1000 to file for your 501(c)(3), but you'll also need to pay your accountant and attorney—those fees might be anywhere from $2000-$4000 initially. ^{[8]
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- Once your startup costs are out of the way, only about 20% of your charity's expenses should go toward administration and fundraising. The rest should be dedicated to your main cause.

Question 4 of 9:

What should I name my charity?

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1
Go with a name that clearly explains your mission. It should be something simple and easy to remember. Also, pick something unique—you don't want donors to get you confused with anyone else who's doing similar work. ^{[10]
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- For instance, if you're forming an animal rescue, you might name it something like, "Carrington Wildlife Rescue."
- Check with the Department of Commerce where you live to make sure you're not using a name that's already taken. ^{[11]
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- Keep in mind that you may not be legally allowed to include certain words in your name, like "Bank," "Federal," or "Insurance." ^{[12]
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You might also consider naming your charity after a person. Some donors might find your cause more personal and relatable if you name the organization after a notable person in the field you're working in. You could name it after yourself or your family, someone who was affected by the issue you're trying to overcome, or a generous donor. ^{[13]
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- For instance, the Susan G. Komen Breast Cancer Foundation was named for the founder's sister, who died of breast cancer at the age of 36. ^{[14]
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Question 5 of 9:

How do charities make money?

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Your primary income will come from fundraising. To keep your organization running, you'll need to reach out to donors, have fundraising events, and spread awareness about your organization online. This can take a lot of energy, but it's really the heartbeat of your organization. When you're doing this, it can help if you keep your mind on your reason for starting the charity in the first place. ^{[15]
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- Popular charity fundraisers include marathons, galas, silent auctions, dinner parties, golf tournaments, art sales, and charity concerts. ^{[16]
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  Cancer Research UK
  U.K.-based cancer research and advocacy charity
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- To raise money online, use your website and social media pages, make YouTube videos about your mission, issue press releases, or start a GoFundMe campaign. ^{[17]
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- Be sure to talk to your accountant or attorney before you start fundraising—there might be laws in your area that impact what you can do.
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You can also apply for grants. Research organizations that support charities similar to yours, and look for every grant opportunity you can. When you're applying for grants, really emphasize what makes your charity unique, how you're working to further your cause, and how you'll use the money you receive. ^{[18]
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- If writing isn't your strong suit, consider hiring a writer who can help you with your grant applications—the better you can show how well you fit the requirements, the more likely you'll be to get approved!
- Try looking for grants through websites like https://www.grants.gov

Question 6 of 9:

Can I run a nonprofit by myself?

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No, you'll typically need a Board of Directors to help manage things. In many places, in fact, you'll be legally required to establish a board in order to operate as a charity. ^{[19]
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Research source} The board will be responsible for establishing committees to handle decision-making, managing the charity's finances, and steering the direction of the nonprofit as a whole. ^{[21]
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- As the CEO of your nonprofit, you'll typically sit on the board—but to avoid a conflict of interest, it may be best if you have a non-voting role. The Board of Directors will oversee your position, including your salary and your job duties. ^{[22]
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- You might also choose to have an Advisory Board made up of knowledgeable volunteers. The Advisory Board doesn't make formal decisions for the nonprofit, but it can make recommendations to the Board of Directors about things like fundraising, hiring decisions, and outreach. ^{[23]
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Volunteers are an essential part of any charitable organization. They'll help with things like administrative duties, organizing and running fundraisers and events, and spreading the word about your mission. Remember, they're donating their time to help your cause, so treat your volunteers with respect—consider showing your appreciation by feeding them when they spend the day helping your organization, giving them free T-shirts, and recognizing them on social media or your website.

Question 7 of 9:

Can the founder of a nonprofit receive a salary?

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Yes, you can be paid for your work. As a nonprofit owner, you'll typically have to put in long hours. You don't necessarily have to volunteer your time, though; you can build a salary into your operating costs. ^{[24]
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Research source} It has to be considered fair compensation, meaning you can't just pay yourself as much as you want—there's no set amount, but it's a good idea to check with your accountant and lawyer to make sure your salary wouldn't be considered excessive for the work you do, or your whole organization will be penalized. ^{[25]
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- To be in compliance with the IRS, your salary will need to be reviewed by your Board of Directors or a committee that they establish—you can't just determine it yourself.

Question 8 of 9:

How do I get attention for my nonprofit?

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1
Focus on your website first. Your website is a really important tool for raising awareness and attracting potential donors. Create an "About Us" page that clearly describes your mission and what you're doing to reach your goals. Keep your website up-to-date with information about upcoming events, recent accomplishments, and how potential volunteers can help. ^{[26]
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- When you're building your webpage, be sure to include a place where people can donate directly from your site.
Stay active on your social media pages—get the word out about any upcoming fundraisers, share posts from similar organizations, and interact with your followers. That way, your social media—and therefore your organization as a whole—will continuously grow. ^{[27]
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Question 9 of 9:

What kind of charity should I start?

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1
Choose something you're really passionate about. Running a charity is a big undertaking, so you need to be dedicated to your cause. If you could change anything about the world, what would it be—and how would you do that? ^{[28]
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- If you're upset by the sight of your town's crumbling downtown area, you might start a charity to raise funds locally to restore some of those buildings.
- If you know of a loved one who's suffering from a rare disorder, you might feel led to start a charity to raise money to help people with that disorder pay for their medical bills.
- You might also create a charity that supports the arts, wildlife conservation, animal rescue, disaster relief, or people in need. ^{[29]
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Come up with an angle that will make your organization unique. There are a lot of other nonprofits out there, and if you're doing the same type of work as someone else, you'll have more competition for donors who care about that cause. Try to find your own angle for whatever you do—if you want to help the homeless population in your area and there are already organizations dedicated to providing food and shelter to people without housing, you might start a charity to collect clothing, instead. ^{[30]
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- If you're passionate about helping something that overlaps with other charities, come up with unique fundraising ideas that will help you stand out. For instance, the ice bucket challenge was a viral campaign by the ALS Association that raised money for research into ALS. ^{[31]
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Expert Q&A

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Question

How do I register a charity?

Rob Wu
Nonprofit Advisor
Rob Wu is the CEO of CauseVox, a digital fundraising platform designed for nonprofits. CauseVox works to help do-gooders raise more money with less effort. Rob has raised over $200,000 for his own nonprofit crowdfunding projects, and his work has been recognized by CNN, Christian Science Monitor, and the Wall Street Journal.

Rob Wu

Nonprofit Advisor

Expert Answer

Fill out the 501c3 forms with the IRS to register a nonprofit or charity organization.

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How to Start a Charity

Steps

How do I set up a charity?

How do I register a charity in the US?

How much does it cost to start a charity?

What should I name my charity?

How do charities make money?

Can I run a nonprofit by myself?

Can the founder of a nonprofit receive a salary?

How do I get attention for my nonprofit?

What kind of charity should I start?

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