Looking to start a nonprofit organization but discouraged by how much it costs?
Lots of changemakers want to make a lasting impact but abandon their hopes when considering finances.
While there are fees and costs to consider, there are plenty of free resources and strategies to help get your nonprofit off the ground. In this guide, we’ll explore the essential steps to launch your nonprofit using as little money as possible.
Can you really start a nonprofit organization with no money?
While it's possible to minimize costs through volunteer efforts and strategic planning, starting a nonprofit typically involves some financial investment. However, with careful budgeting and resourcefulness, you can launch your nonprofit organization at little to no cost.
When thinking about starting a nonprofit, you’ll need to consider a few different kinds of costs and fees:
Registration and legal fees
- Incorporation: Depending on your location, there may be fees associated with incorporating your nonprofit organization.
- Filing for tax-exempt status: Applying for tax-exempt status with the IRS typically involves filing Form 1023 or 1023-EZ, which ranges from $275-$600.
- Annual filing fees: Some states require nonprofits to pay to file annual reports, renew licenses, and maintain compliance with regulatory requirements.
- Legal advice: Some nonrpfoits seek legal counsel to ensure compliance with nonprofit laws.
- Trademark registration: If you want to protect your nonprofit's name or logo, you may need to register trademarks, which can involve legal fees.
Once you’ve legally registered your organization, you’ll then need to consider a few other costs like:
- Operational costs: Rent for office space, utilities, supplies and equipment, and personnel costs (salaries, benefits, etc.).
- Fundraising expenses: Event costs (venue, catering, etc.), fundraising platforms and donor management softwares, marketing and promotional costs, etc.
- Program costs: Expenses associated with delivering the nonprofit's mission and programs, such as materials and equipment.
What type of nonprofit should you start?
A nonprofit organization is a type of entity that provides services or resources to address societal needs. Unlike for-profit businesses, nonprofits don’t sell products or services for revenue — they collect donations purely to create change and impact.
When considering if you should start a nonprofit, it’s important to think about what kind of nonprofit might be right for your goals and needs. Some of the most popular nonprofits are 501(c)(3) organizations, 501(c)(4) organizations, and 501(c)(6) organizations.
501(c)(3) organizations
- Purpose: Must operate exclusively for charitable, religious, educational, or similar purposes.
- Tax status: Donations to these organizations are tax-deductible for the donors.
- Examples: Hospitals, schools, or religious organizations.
- Costs: Often requires funds to implement programs, run fundraising events, and manage volunteers.
501(c)(4) organizations
- Purpose: Focus on promoting social welfare and community improvement.
- Examples: Advocacy groups, civic leagues, and social welfare organizations.
- Tax status: Donations to these organizations are typically not tax-deductible for donors.
- Costs: These groups may incur expenses related to lobbying efforts and public awareness campaigns.
501(c)(6) organizations
- Purpose: Primarily serve the interests of a particular industry or profession.
- Examples: Trade associations, chambers of commerce, and professional societies.
- Tax status: Donations to these organizations are generally not tax-deductible for donors.
- Costs: Costs may include incorporation fees, legal expenses for compliance membership recruitment costs, and operational expenses.
What is the easiest nonprofit to start?
The ease of starting a nonprofit depends on factors like mission, structure, and requirements. Charitable nonprofits, especially those helping communities directly, are often seen as easier to start because they have clear goals and simple operations. They focus on providing services like food aid, shelter, education, or healthcare.
These nonprofits usually face fewer legal and regulatory challenges compared to those involved in lobbying or specialized industries. Also, they might find it easier to get volunteers and donations because people see the positive impact of their work.
Can you make a living owning a nonprofit?
Nonprofit organizations exist to serve charitable, educational, religious, or other beneficial purposes, not to make profits for individuals. They're governed by boards of directors or trustees and don't have owners like traditional businesses.
However, people working for nonprofits, such as founders and staff, can get paid for their services. Any compensation, though, must be supervised by the organization's board and meet industry standards.
Here's how individuals within nonprofit organizations may be compensated:
- Salaries: Executives, directors, program managers, and other staff members in nonprofits may earn salaries based on their duties and experience. Nonprofit salaries can compete with those in for-profit companies, but they might differ based on factors like organization size, location, and budget.
- Benefits: Nonprofit employees can get benefits such as health insurance, retirement contributions, paid time off, and similar perks to those in for-profit jobs.
- Stipends: Some nonprofit workers, especially volunteers or part-timers, may get stipends instead of salaries. Stipends are usually small payments to cover expenses or compensate for time spent on specific projects.
While individuals working for nonprofits may receive compensation, it's crucial to remember that nonprofits prioritize fulfilling their charitable missions over generating income for individuals. Nonprofit leaders and staff are usually driven by a passion for the organization's mission rather than financial gain.
Starting a nonprofit organization with no money: 6 easy steps
Starting a nonprofit organization with no money may seem daunting, but it's possible with careful planning.
You’ll need to determine your mission, vision, and goals, recruit a team, develop a business plan, and file for tax-exempt status, as well as adhere to any state-specific rules and regulations. Once your nonprofit is formed, you’ll need to start building relationships and finding creative cost-free ways to raise money.
Here are the key steps you can take to get started:
Step 1: Lay the groundwork
To get started, you'll need to determine the purpose of your nonprofit and the impact you aim to make in your community or beyond.
Mission/vision: Conduct thorough research to understand the needs of your target audience and the existing landscape of nonprofits in your area. Identify any gaps or opportunities where your organization can make a meaningful difference.
Goals: Clearly define specific, measurable, achievable, relevant, and time-bound (SMART) goals and objectives.
Name: Choose a name for your nonprofit that reflects your mission, vision, and values. Ensure the name is unique, memorable, and aligned with your organization's goals. In some states, nonprofits must have a unique name that hasn’t already been used.
Step 2: Recruit your team
Once you have a clear understanding of your mission and target audience, it's time to recruit a passionate and committed team. While not all states require that nonprofits be operated by more than one person, bringing in collaborators is a great way to bring diverse skills and expertise to the table.
This might include:
- Board members
- Incorporators
- Advisors
- Staff
- Volunteers
- Partners
Tip: Reach out to existing networks, or use social media as a free tool to find the right people for free.
Step 3: Create a nonprofit business plan
With your team in place, it's important to create a solid business plan outlining your organization's goals, objectives, strategies, and financial projections.
While you may not have money initially, a well-thought-out business plan will help attract donors, volunteers, and other stakeholders who can support your cause.
This might include:
- Organizational description
- Mission statement
- Programs and services you intend to provide
- A SWOT analysis of the organization
- Marketing and outreach strategy
- Financial projections
- Methods for evaluating progress
- How your organization with benefit local communities
Pro tip: Use software like Canva to create professional business plans for free.
Step 4: Fulfill legal requirements
Next, you'll need to incorporate your nonprofit in order to become a tax-exempt organization and obtain tax-exempt status. Usually, this includes state and federal government fees.
Research the legal requirements and regulations for nonprofits in your state, and follow the necessary steps to register your organization with the appropriate authorities. You may also need to apply for tax-exempt status with the IRS to receive donations and grants.
You'll also most likely need an employer identification number or EIN. The application to obtain one is completely free.
Step 5: Build relationships and raise awareness
Once your nonprofit is officially registered, focus on building relationships with potential donors, volunteers, and community partners.
Attend free networking events, reach out to local businesses and organizations, and leverage social media to raise awareness about your cause for free.
Step 6: Find free fundraising strategies
In the absence of money, consider what free fundraising campaigns you might launch in order to generate revenue for your nonprofit.
Consider corporate matching, launching a peer-to-peer fundraising event, and seeking in-kind donations of goods and services from businesses and individuals in your community.
4 common pitfalls to avoid when starting a nonprofit organization
When starting your nonprofit from scratch, there are a few key things to avoid:
1. Not diversifying funding streams
Relying too much on a single funding source, like grants or donations from one donor, can make your nonprofit vulnerable to funding fluctuations. To ensure financial stability, cultivate relationships with multiple donors and funding sources. That might mean sponsorships, corporate matching programs, text-to-give options, and more.
2. Ignoring technology
Overlooking technology and innovation can hinder your nonprofit's ability to adapt and thrive. Embrace technology solutions — especially free ones like Zeffy — to streamline operations, manage donors, and even host events.
3. Lack of creativity in fundraising
It’s easy for nonprofits to stick to a few tried and true fundraising ideas of raising funds. But in order to keep donors engaged and excited to give, you’ll need to remain creative. That means offering in-person events like galas, selling merch through an online store, or even hosting an raffle.
4. Avoiding collaboration with likeminded nonprofits
Nonprofits often work in a silo and neglect crucial community connections. Partnering up with like-minded stakeholders and organizations can double your impact, pool resources, and even reduce costs.
What are the best ways to raise money for your nonprofit with no upfront investment?
Raising money for your nonprofit without upfront investment requires some strategic planning. Here are some effective ways to raise funds without spending money upfront:
- Online fundraising platforms: Utilize free online fundraising platforms like Zeffy to create campaigns, collect donations, and manage donors without any hidden fees or costs.
- Social media campaigns: Most social media is free to use. Promote your nonprofit's mission and fundraising efforts by creating engaging content, sharing success stories, and encouraging your followers to donate or share your posts with their networks.
- Peer-to-peer fundraising: Encourage your supporters to fundraise on your behalf. Provide them with peer-to-peer fundraising platforms and resources to create their own fundraising pages and reach out to their friends, family, and colleagues for donations.
- Grant writing: Research and apply for grants from foundations, corporations, and government agencies that align with your nonprofit's mission. While grant writing requires time and effort, it can yield significant funding without upfront investment.
- In-kind donations: Seek donations of goods, services, or expertise from individuals or businesses that support your cause. In-kind donations can include office supplies, event space, professional services, or pro bono support, reducing your need for upfront capital.
- Corporate or fiscal sponsor: Approach businesses in your community or industry for corporate sponsorships or partnerships. Offer visibility and recognition in exchange for fiscal sponsorship or in-kind donations.
- Donation matching: Encourage donors to maximize their impact by offering donation matching opportunities. Partner with businesses or individuals willing to match donations up to a certain amount, effectively doubling the impact of each donation.
- Volunteer fundraisers: Mobilize your volunteers to organize and raise money for your charity events or initiatives on your behalf. Empower them to leverage their networks and creativity to raise funds without upfront investment.
How MC Boys Soccer Booster Club raised $15,000 for free
The Boys Soccer Booster Club, a dedicated group supporting youth soccer in the community, faced the challenge of raising funds to cover equipment, travel expenses, and other essential needs. With limited resources and a growing demand for financial support, the club needed a completely free and user-friendly platform to raise funds.
Enter Zeffy, a true game-changer for the Boys Soccer Booster Club. With its fee-free fundraising platform, Zeffy offered a seamless solution to their fundraising woes. With the platform, the club was able to create custom fundraising pages, tickets, and online shops to raise money.
Plus, With Zeffy's intuitive dashboard, they could track donations in real-time, monitor campaign progress, and send personalized thank-you messages to supporters.
Thanks to to these tools, the Boys Soccer Booster Club raised an impressive $15,000 to support its programs and activities — and didn’t pay a cent in fees.
Best free tools for starting a nonprofit
When starting a nonprofit without any money, it’s important to take advantage of free tools and softwares for nonprofits. These platforms can help you organize your team, spread your message, and collect funds without having to pay much at all.
Collaboration and task management
Google Workspace (formerly G Suite): Google Workspace offers a suite of productivity tools including Gmail, Google Drive, Docs, Sheets, and Slides, which are great for communication within your nonprofit team.
Trello: Trello is a flexible project management tool that uses boards, lists, and cards to organize tasks and collaborate with team members. Its free version provides basic features that can be useful for planning and executing projects within your nonprofit.
Asana: Asana is another project management tool that offers a free version for small teams. It allows users to create tasks, set deadlines, assign responsibilities, and track progress, facilitating efficient project coordination and workflow management.
Zoom: Zoom offers free video conferencing and webinar hosting for meetings, workshops, and virtual events. It's a valuable tool for nonprofits looking to connect with stakeholders, conduct training sessions, or host fundraising events online.
Marketing and promotion
Canva: Canva is a versatile graphic design tool that allows users to create professional-quality graphics, presentations, and marketing materials for free. It offers a wide range of templates and customization options, making it ideal for nonprofits looking to create compelling visual content.
Mailchimp: Mailchimp is a popular email marketing platform that offers a free plan for nonprofits. It enables organizations to create and send email campaigns, manage subscriber lists, and track engagement metrics, helping to build and nurture relationships with donors and supporters. Check out our article on Mailchimp alternatives here
WordPress: WordPress is a popular website building platform that offers free website hosting and customizable templates for nonprofits. With its user-friendly interface and extensive plugin library, WordPress allows organizations to create and maintain a professional online presence without incurring hosting costs.
Google Ad Grants: Google Ad Grants provides eligible nonprofits with $10,000 per month in free advertising credits to promote their missions and raise awareness. By leveraging Google Ads, organizations can increase their visibility online and attract more supporters to their cause.
Fundraising and donor management
Zeffy: Zeffy is a platform for nonprofits to manage events and sell tickets online. Manage donors, host lotteries and raffles, and so much more. Unlike other fundraising platforms, Zeffy lets you collect donations, and promote your events, all in one place, completely for free.
Double the Donation: Double the Donation is a tool that helps nonprofits find extra funding by discovering if donations can be matched by employers. It has a database of companies offering matching gift programs, so nonprofits can easily check if their donors' contributions qualify for matching gifts. This way, nonprofits can increase their funds without donors having to pay extra.
Bottom line
Starting a nonprofit with no money can be intimidating. But, the potential of upfront costs shouldn’t deter you from launching your own charity — with the right tools, strategy, and resources in place, you can launch your own organization in no time.
One of the best ways to start a nonprofit with no money is with completely free software. With Zeffy, nonprofits can accomplish everything they need to on the road to nonprofit success — manage donors, accept donations online, run events and online raffles, and so much more — without having to pay a cent. Completely free forever, Zeffy is the only fee-free platform that’s designed to help you do more for less.
How to start a nonprofit with no money FAQs
Can you start a nonprofit organization for free?
You can start a nonprofit without spending a lot of money, but there are some costs, like filing fees and ongoing expenses. You can try to reduce costs by using free resources and getting help from volunteers. So, while it might not be totally free, you can start one without needing a lot of money upfront.
What’s the easiest nonprofit to start?
Charitable nonprofits, like those helping with food or education, are usually the simplest to start. They have straightforward goals and ways of doing things, making them easier for people who want to make a difference in their community.
Can you make a living by starting a nonprofit organization?
Yes, you can earn money by working for a nonprofit, but it might not be as much as working in a for-profit job. Nonprofit leaders and staff can get paid, but it has to be a reasonable amount that fits the organization's budget. Sometimes, they need to find other ways to earn money, like getting grants or doing part-time work. So, while you can make a living from a nonprofit, it might not always provide as much money as other jobs.
