By Harry Cline

We>me does more than serve the community through its education and activism. We>me also supports local movements and nonprofits as they raise funds, build capacity, and make a positive impact in the community.

It’s important to know the differences between running a charity and a nonprofit organization. In Canada, in order to partner with others, Canada Charity Law notes that a charity must file a T3010 Registered Charity Information Return with the Canada Revenue Agency (CRA) and be approved as a charity; a nonprofit organization does not. That said, unlike a charity, a nonprofit doesn’t need to operate exclusively for charitable purposes. In fact, nonprofits can operate for any other purpose except for profit.

Starting a nonprofit

According to the Council on Foundations, there are no statutory requirements for the legal formation of a not-for-profit organization (NPO). The most common legal forms include:

• “Non-share” (membership) corporations, incorporated under either federal or provincial law;
• Trusts, which are recognized in common law provinces (Quebec, which is a civil law jurisdiction, also recognizes forms similar to trusts); and
• Unincorporated organizations or associations.

Once you’ve decided how to organize your nonprofit, you’ll need to complete the required paperwork. This includes the Articles of Incorporation (Form 4001), which can be in English, French or both; and your Initial Registered Office Address and First Board of Directors (Form 4002). You’ll also need to include the Nuans name search results of the nonprofit name you’ve selected — this needs to be approved and must be verified by a letter from Corporations Canada.

Building a winning nonprofit team

A nonprofit is only as good as its team. Board members, staff, and volunteers all play a critical role in a nonprofit organization’s success.

• The first board of directors makes important decisions like board size and term length. During the first board meeting, members also elect officers, assign duties, and adopt bylaws. The most successful boards are committed to the mission and bring a diversity of skills to the table.
• Many nonprofits initially operate without paid staff. As your organization grows, however, you’ll need employees to build capacity. Pay attention to both passion and experience when recruiting for a nonprofit.
• Nonprofits often rely on volunteers in addition to paid employees. However, using volunteers isn’t without risk. Take care to distinguish employees and volunteers and avoid payments that could jeopardize volunteer status.

Tips for effective nonprofit management

Launching a nonprofit is only the first step. In order to fulfill its mission, a nonprofit organization needs a strategy.

• Clearly defined, realistic goals are the key to any nonprofit’s success. Goal-setting for nonprofits includes both long-term strategic plans and annual metrics. Consider financial, organizational, and impact goals when setting key performance indicators.
• Running a nonprofit is akin to running a business, which calls for using robust business systems to help manage tasks like invoicing. Tracking and paying expenses is one of the most tedious administrative items that need to be checked off on a regular basis, so consider using a platform like QuickBooks to handle batch invoicing that retrieves, organizes and tracks several invoices, in batches, rather than one at a time. This saves time and money.
• Many of a nonprofit’s goals center around fundraising. If you’re new to fundraising, use a nonprofit fundraising plan template to guide your development strategy. A template will help you create a yearly calendar to guide fundraising efforts.
• Nonprofits also need to plan for board member transitions. Succession planning ensures a nonprofit maintains an active and engaged board of directors at all times.
• Effective nonprofits engage key stakeholders throughout the planning process. A stakeholder is anyone impacted by your organization, including beneficiaries, partner organizations, community members, government agencies, and volunteers. Stakeholder engagement promotes equity and accountability within nonprofits.

Starting a nonprofit isn’t for the faint of heart. For nonprofit professionals committed to a mission, however, there’s no better way to make a positive impact on the community. When you’re ready to grow your nonprofit’s reach, connect with the United Way to learn how the United Way can maximize your organization’s impact.