Before You Start A Non-Profit 501 (c) (3) Read This . . .

By far the most read post on my blog is, 16 Reasons to Consider a “For-Profit” Status for Your Ministry,” with thousands of reader so far. If you have read it, you know I recommend caution when using the 501(c)(3) status for a parachurch ministry. However, there are times when it may be be necessary because of the many benefits it provides. 

Out of about ten non-profit organizations that I’ve been close to, only two have been well off financially. Those two organization have unlimited resources because of their connection to people in the business sector. Of course, that’s not normal. Most non-profit organizations struggle financially and consider fundraising as one of the major challenges of the organization.  For them, and many others, the only way to survive is through donor giving. That means if, through legislation, the requirements to keep the non-profit status changes, the ministry would have some serious decisions to make.

If you can avoid it, I still believe it’s better to find another way to fund your ministry. However, if you choose to go the non-profit route, there are a few points to consider before you start a non-profit, 501 (c) (3). There are limitations and requirements with the non-profit tax status that force you to ask yourself, “Is this right for me?” For more details, read my post 16 Reasons to Consider a “For-Profit” Status for Your Ministry.

Now . . .

High five to you for stepping into your God-given call! Even if you are just thinking about starting a ministry. It’s exciting to see you on this track. The world needs your gifts and all that you bring to the table. The pieces won’t come together at once, but that’s OK. Take the steps that God gives you, learn from others and let the journey begin.

Since the top challenge that new ministries face is maintaining enough cash flow to support the ministry and keeping the right people on board. I recommend that you continue to earn income from your job or business as you build your ministry. Some people do both. They keep their job and start a ministry. 

At the Extra Life Marketplace Ministry, one of our goals is to support college students with scholarships, internships, and mentoring. For this program, we are using a non-profit source. The reason this works, is because if the rules change, we can always end the program without ending the ministry.  

Here are a few other programs that may benefit under the non-profit status:

1. Grants for people who are recovering financially
2. Catastrophe program to help people displaced by unexpected circumstances.
3. Mentor programs – supplies and training to help people overcome obstacles. 
4. Food and clothing for the homeless
5. Summer camp programs for youth
6. Community service programs

All of these programs can stand alone. They are great opportunities for donors and they make a huge difference in the community. Yet, you can separate yourself, by giving the area a separate name legally and allow 100% of the giving to go toward that ministry area instead of salaries and buildings.  Of course, there are times when giving should go to salaries, buildings, etc. The point is to think carefully as you decide what your funding goals will be.

If you believe it’s right for you, here are some points to consider before you start anon-profit 501 (c) (3) ministry – 

1. Don’t get side tracked. Spend plenty time praying and reflecting on the purpose of your ministry to stay within your planned parameters.
2. Write a mission statement that reflects the core of what your ministry stands for and who you will serve. 
3. Think about how you will be funded. What will you to that attracts donors?
4. Who will be on your Board of Directors? Who is with you?
5. Consider organizations like the Women’s Non-Profit Alliance who offer support, also allowing you to use their non-profit status as a partner.
6. Don’t wait until you have your non-profit to start serving in your ministry. Start now so you can learn valuable lessons that you will need later.
7. Choose a name and logo
8. Get your website and social media sites set-up
9. Think about how you will get the word out about your ministry.

Please don’t be overwhelmed by these steps. If you have a heart to serve and you’re ready, go for it and take your steps one day at a time.

Serving others in ministry is extremely rewarding. There will always be something new that you need as long as you are learning and growing. Focus on how God is leading you and enjoy your journey – one step at a time.

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