Money is a major concern in the establishment of a business that, by definition, will not generate a profit for the founder. Careful planning is essential for a successful business model. Most NPOs go into business with an initial budget planned for the first five years of operation. Some issues to consider at this stage include how big the organization will eventually become, what the mission of the NPO will be, how much accomplishing these goals will cost, and where the capital will come from. Important: When establishing a nonprofit, the advice of professionals is indispensable. Securing the services of a tax attorney and experienced lawyer will clarify the many cloudy financial and legal issues that await a prospective NPO founder.
For nonprofits that plan to deal with banks, banking institutions often offer assistance in preparing a proposal in accordance to its specific requirements. A bank that specializes in the needs of NPOs will likely be of great assistance to the newcomer to the nonprofit sector.
If an NPO is reliant upon a certain amount of community participation for part of its revenue stream, it will need to demonstrate what participation figures are reasonable, and how these figures were arrived at. If the NPO intends for the funds to come from donors or membership, it is the organization’s responsibility to have a concrete plan for how to accomplish this.
