Getting started with your non-profit organization
A non-profit organization is a task -oriented group, driven by people with a common interest. The main aim of an NGO isn’t to make money but to serve humanity.
Just like a conventional business, NGOs need funds to keep them going, which they acquire through donations, membership fees, subscriptions. These funds go into fulfilling the mission and vision of the NGO, salaries, day-to-day operations.
Before dabbling into starting a non-profit organization, you need to:
Have a purpose:
What is the motive of your organization? Who will benefit from it? Is it charitable oriented? Service oriented? Participatory or empowering oriented? What is your prospect? Will it be a national or international organization?
Know where the revenue is coming from:
NGOs make the bulk of their revenue from donations, membership fees, launchings, fundraising events, and investments.
You should ask yourself: Do you have the resources to implement this project before donations start coming in? If not, who should you meet for sponsorship?
When you 100% convinced starting a non-profit organization is your way, you can then proceed to:
Have a business plan:
Just like any other business, it is important to have a well-crafted business plan, alongside your mission and vision of the organization. A part of your business plan will be included in your tax-exemption application. Not only that, in your bid to raise funds, you need to present your business plan to prospective donors.
Recruit a Board of Trustees:
A Board of Trustees is an equivalent of a Board of Directors/Shareholders in an incorporated company. hey are responsible for the management and direction of the organization.
This group of people is legally accountable to help the organization meet its mission and vision.
Incorporate your organization:
To have a proper structure, your non-profit must be registered with the necessary body. In Nigeria, this body is Corporate Affairs Commission (CAC).
The first thing to do is to conduct a search on the availability of the name you want to use and reserve it.
There must be a Board of Trustees in place to govern and manage the affairs of the organization.
After your name has been approved and you have your Board of Trustees, the Trustees must publish a notification of their intention to register an NGO in 3 newspapers.
The application form must be completed and submitted. This form asks for details of the NGO as well as the personal details of the Trustees.
The application form is to submitted with an application letter, original newspaper publications amongst other documents.
Apply for tax exemption:
One of the benefits NGOs enjoy is tax exemption.
According to the Section 23(1) of the Companies Income Tax Act (CITA) Cap C21 LFN 2004 (as amended) states that the profit of any statutory, charitable, ecclesiastical, educational or other similar associations are exempted from company’s income tax obligation provided such profits are not derived from any trade or business carried on by such an organization or association.
However, if by any chance, an NGO engages in any trade or business, the profit derived is subjected to income tax.
Plan your first fundraising:
Hosting a fundraising event is one of the ways to raise money for your non-profit organization. This will also introduce your organization to your community, serve as an avenue to get people to know more about what you do, and potential donors to share in your vision.
Run your business as you would a conventional business:
Hire the right people, people who share the same passion as you- to serve humanity. The right employees will take on the necessary responsibilities and fulfil their roles to the best of their abilities.
Have a defined strategy for operations, marketing, human relations, to mention a few.
Strive for ways to do more and improve the service you offer.
Keep an eye on your numbers:
Like any other business, a non-profit organization needs a proper accounting software to help them keep track of their revenue. The first thing to do as a manager of a non-profit organization is to record all revenues.
There are different sources of revenue coming in such as: pledges, donations, investments, membership fees, grants, fundraisers.
To successful keep an eye on the transactions going on in your organization, it is best to find an accounting solution that works for both conventional and non-profit organizations. Some accounting software are designed solely for conventional businesses, so when you fight the one that allows you handle your non-profit finances adequately, do not let go of it!
- Reporting:
With a simple and easy to use interface, an accounting software should be useful in other essential aspects, most especially, reporting. To see your monthly revenue against your expenses.
- Collaboration:
With a cloud-based accounting package, you are able to collaborate with your accountant wherever you are. If you project your non-profit organization to be an internationally recognized body, you have to start working on it from now and this will involve a lot of travels. Your accounts updates shouldn’t stop just because you are in another location, therefore, opt for a cloud-based accounting solution that allows you keep track of your finances wherever you may be.
